In the course, we understood that there are certain key financial reports for the healthcare services organization. The Balance Sheet, Operating Statement (Income Statement; Revenue/Expense Statement), and the Cash Flow Schedule each represent a certain perspective of the organization's financial position within its fiscal period. At the end of each year these three financial reports make up the year-end financial statements, and following the audit by certified public accountants (CPA's) of the organization's financial transactions and recordings, they are issued with any required adjustments, qualifiers, and notes in the certified financial report of the auditing CPA firm. At the beginning of each year (fiscal period), the organization applies an operating budget that includes projections within the Balance Sheet, Operating Statement (Income Statement; Revenue/Expense Statement),

and the Cash Flow Schedule. The budget provides a guide for volume and financial expectations in the day-to- day operations of the organization, and commonly, the budgeted Balance Sheet, Operating Statement (Income

Statement; Revenue/Expense Statement), and the Cash Flow Schedule are compared on a monthly-basis with the Balance Sheet, Operating Statement (Income Statement; Revenue/Expense Statement), and the Cash Flow Schedule that reflect the actual experience of the organization - to compare the projected and actual results, and determine variations, understand the reasons for the variations and take any management action to make operational improvements. These three financial reports are inter-related, in that a change in one can affect the others. Increased receipts shown on the Cash Flow Schedule, for example, can lessen accounts receivable (patient revenue) on the Operating Statement and add to the Cash Asset in the Balance Sheet. Question Explain the relationship between the three reports - the Balance Sheet, Statement of Operations (Income Statement; Revenue/Expense Statement), and the Cash Flow Schedule. Provide at least three (3) examples of how a change in one of the reports effects the other two reports, and indicate the financial categories of assets, liabilities, revenue, expenses, receipts, and/or disbursements that are affected by the changes, as well as how the results of the three reports are impacted - e.g., Net Worth (Owners' Equity and Retained Earnings; or Fund Balance), Revenue over Expenses - Net Gain/Loss (Net Income), and Closing Balance. Indicate the specific references used to prepare the answer.