Healthcare Financial Management and Economics Week 8 Assignment 1

Springfield Community Hospital Assignment 1: Ratio Analysis It is important to understand that when interpreting financial statements, the numbers alone may not provide the whole financial picture of an organization. Instead, you must analyze the statements using ratios, which are then compared to benchmarks across the healthcare industry.

For this Assignment, you examine the financial documents for Springfield Community Hospital and analyze the organizations financial health. Springfield Community Hospital Springfield Community Hospital is a small community hospital serving a rural population.

The adjusted discharges are 3.30 for the 1st year and 3.10 for the 2nd. Springfield Community Hospital Statement of Operations (in thousands) for the Years Ended December 31, 2016 and 2017 2016 2017

Revenues Net patient service revenue $21,000 $17,000 Net assets released from restriction 1,000 800 Total operating revenues 22,000 17,800 Expenses Salaries and benefits 12,000 8,000 Supplies and other expenses 6,000 5,000 Depreciation 2,300 1,900 General services 200 100 Total operating expenses 20,500 15,000 Operating income 1,500 2,800 Non-operating income 3,500 2,200 Excess of revenues over expenses 5,000 5,000 Increase (decrease) in net assets $5,000 $5,000 Springfield Community Hospital Balance Sheet (in thousands) for the Years Ended December 31, 2016 and 2017 2016 2017 Current assets Cash and cash equivalents $600 $400 Net patient receivables 4,000 3,500 Inventory 900 800 Total current assets 5,500 5,250 Non-current assets Plant, property, and equipment Gross plant, property, and equipment 25,000 23,000 (less accumulated depreciation) (18,000) (17,000) Net plant, property, and equipment 7,000 6,000 Board-designated funds 18,000 9,000 Total assets 30,500 20,250 Current liabilities Accounts payable 2,500 2,000 Accrued expenses 850 900 Total current liabilities 3,350 2,900 Long-term liabilities Bonds payable 5,500 7,500 Total long-term liabilities 5,500 7,500 Net assets 21,650 9,850 Total liabilities and net assets $30,500 $20,250

To prepare for this Assignment: Examine the financial statements from Springfield Community Hospital.

Reflect on how you will use this financial data to calculate and analyze the organizations financial ratios.

Refer to Chapter 4 of Financial Management of Health Care Organizations: An Introduction to Fundamental Tools, Concepts and Applications for additional guidance. The Assignment: