First Central Valley Hospital Balance Sheets (December 31, 2017 and 2018) in thousands

Below are the hospital's financial statements from the past two years:

First Central Valley Hospital Balance Sheets (December 31, 2017 and 2018) in thousands

	2017	2018
Cash and equivalents	$ 3,095	2,263
Short-term investments	2,000	4,000
A/R	20,738	21,840
Inventories	2,982	3,177
Total current assets	28,982	31,280
Gross property and equipment	140,865	145,158
Less accumulated depreciation	21,030	25,160
Net property and equipment	119,835	119,998
Total assets	148,650	151,278
Accrued expenses	5,421	5,650
Notes payable	6,237	2,975
Total current liabilities	16,803	13,332
Long-term debt	33,055	30,582
Net assets (equity)	98,792	107,364
Total liabilities and net assets	148,650	151,278

Valley Hospital Statements of Operations (Years Ended December 31, 2017 and 2018) in thousands

	2017	2018
Net patient service revenue	$ 95,398	106,495
Premium revenue	4,622	5,232
Other revenue	6,014	3,644
Total revenues	106,034	115,371
Expenses:
Nursing services	56,752	58,285
Dietary services	4,718	5,424
General services	11,655	13,198
Administrative services	11,585	11,427
Employee health and welfare	10,705	10,250
Provision for bad debts	3,469	3,328
Insurance expense	1,204	1,320
Depreciation	4,025	4,130
Interest expense	1,521	1,542
Total expenses	105,634	108,904
Operating income	400	6,467
Nonoperating income	1,995	2,105
Net income	2,395	8,572

Accrued expenses	5,421	5,650
Notes payable	6,237	2,975
Total current liabilities	16,803	13,332
Long-term debt	33,055	30,582
Net assets (equity)	98,792	107,364
Total liabilities and net assets	148,650	151,278

First Central Valley Hospital Statements of Operations (Years Ended December 31, 2017 and 2018) in thousands

	2018	2019
Net patient service revenue	$ 95,398	106,495
Premium revenue	4,622	5,232
Other revenue	6,014	3,644
Total revenues	106,034	115,371
Expenses:
Nursing services	56,752	58,285
Dietary services	4,718	5,424
General services	11,655	13,198
Administrative services	11,585	11,427
Employee health and welfare	10,705	10,250
Provision for bad debts	3,469	3,328
Insurance expense	1,204	1,320
Depreciation	4,025	4,130
Interest expense	1,521	1,542
Total expenses	105,634	108,904
Operating income	400	6,467
Nonoperating income	1,995	2,105
Net income	2,395	8,572

• First Valley Hospital 2018 financial period
  • Cash flows from operating activities: $11,196
  • Cash flows from investing activities: ($6,293)
  • Cash flows from financing activities: ($5,735)
• The nursing department is requesting additional funding (estimated $10,000) for additional, hospital-based continuing education programs.
• The Womens Center expansion project is estimated to cost roughly $1,000,000, and require 4 years.
• Medicare recoupments due to HCAHPS survey responses have consistently resulted in a reduction of patient service revenue and are estimated to increase by 1.5% annually for the next 3 years.

• 1. What is the overall financial position of First Central Valley Hospital, to-date? Are there any key-indicator benchmarks that can be used to support your claim? If so, what are they and where did they come from?
• 2.In addition to the information provided in the case, what other types of information would you request in order to thoroughly analyze the hospitals financial position to-date
• 3.Do you recommend the funding of the nursing continuing education request? If so, how should the request be funded/financed? If no, then what financial information will you use to explain to the Director of Nursing for the hospital?
• 4. Do you recommend the funding of the Womens Center expansion project? How should this large project befinanced?
• 5. For each of the above items, what additional information would you specifically request knowledge of, prior to a solid decision on each objective? Explain why this information is needed thoroughly.