Organizational Financials Financial Components Financial components for Brookdale Senior Living Solutions in RI uses income statements, cash flow statements, and the balance sheet; they are accounting systems that must follow GAAP regulations. Assisted living facilities such as Brookdale use the accrual system of accounting which, \"provides recognition to all revenues in the time period they are actually earned, and to all expenses when they are actually incurred.\" (Yee-Melichar, Boyle, & Flores, 2010) Additionally Brookdale also uses a non-GAAP regulation statement, called CFFO that measures operating performance. It provides the company with a day-to-day trend performance that shows management indicators of progress in achieving their optimal performance. The balance sheet of Brookdale defines whether or not the company you are investing in is capable of generating real value for their shareholders. It will also determine if the company has enough cash to fund their growth or if they will have debt, issue debt, or have to issue more stocks to stay afloat. Mission and Finances With the mission of enriching lives of the seniors in the community. We promise that our resident's quality of life and independence will not be compromised as we expand our initiative to expand. Through Brookdale's goals to renovate and upgrade communities we promise that our services will not lack from our mission. Additionally, by growing our communities, we promise to continue to enrich our senior's lives. To follow our mission statement, staffing concerns and shortages in the industry must be addressed. Staffing the current 438 assisted living communities along with the other communities that Brookdale operate takes a lot of manpower and resources. The staffing needs of the administrative department, recreational activities department, medical and nursing professionals, all forms of therapists, and maintenance for the facilities can add up fast. The Excel document displays that Brookdale has a mission to increase revenue while upgrading their community with their facilities. This shows that as they add new communities the revenue is increasing, but they are still able to keep operating expenses low enough to have an increase in operating income. Assisted Living 2013 1,051,8 2012 1,013,3 68 - 37 - Operating Expenses Operating 271,392 269,029 Income 780,476 744,308 Revenue Additionally, in 2013, Brookdale for assisted living facilities had a total current asset of $294,862 with an operating costs of $271,392; it shows that the company had enough assets that can be converted into cash within a year to cover those operating costs. However, if in 2014 the current assets remained the same at $294,862 but the operating costs increased because of the increase of communities to $325,862; the result is $-31,000 not enough assets to cover these operating costs (United States Securities and Exchange Commission, 2013) This could result in the company not being able to pay back their creditors and ultimately may result in bankruptcy. It could also explain to their investors that they are not working efficiently. (Investopedia, 2014) Operations and Moving Forward Brookdale wants to grow their existing operations by increasing their revenues through combination of increasing their monthly service fees and occupancy growth. In 2014, Brookdale initiated a merger with Emeritus Senior Living Solutions to accomplish their goals. According to the balance sheet, Brookdale reported a net loss of 66.5 million dollars but in 2013 they reported a decrease to 3.6 million dollars. To drive their growth of occupancy the company plans to invest more significant capital expenditures. As they are doing this, their net loss will decrease over time due to bringing in more and significant fees for these residents of the communities. The organization merger will provide the opportunity to renovate and upgrade the communities that will drive this initiative. The merger with Emeritus has allowed the opportunity for the company to save costs on procurement goods and services. This will also decrease their net loss. By adding new communities to the organization and adding assets to the already set ones, the company plans to increase their revenues and cash flows. There are some weaknesses that will affect this merger and the financial situations of Brookdale. Declining economic conditions, inflation, commodity costs, fuel and other energy costs, and cost of labor will all impact the opening of new communities along with increasing fees for services and living. (Brookdale, 2013-2014) By adding new level of services for their residents through the Program Mix initiative, Brookdale hopes to reposition the communities to meet the growing needs of the residents. They may also plan to purchase more already established living communities to increase their service needs and increase the net profit of the company. With the merger signed in July 31, 2014 Brookdale has become the first National Senior living solutions company which will open more funds to purchase and open new communities to the residents. (Brookdale, 2014) Brookdale also plans to expand their services to those that are not in their selected communities, to those in home, to increase cash flow, and with the goal of these clients entering their communities in the future. However, and increase in state and local regulations will be a challenge for Brookdale because it will ultimately increase the cost of doing business. In the future, the increase in employment costs that include salaries, wages, and benefits (health care for employees), will negatively impact the financial results for Brookdale, especially because their plan to open up new communities that will need more staffing and supplies. Additionally, estate taxes, utilities, cost of food and insurances will also impact the financial statements of the company negatively. (United States Securities and Exchange Commission, 2013) Therefore, I would recommend that Brookdale try not to be too aggressive in expanding their company to more communities until the economic status of the area is in a position to support such a facility. If they are too aggressive, Brookdale will not continue to see an increase in their net profit but will start to reflect prior years of net loss. Summary of Financial and Operational Components Furthermore, the financial and operational components of any organization are necessary for a successful business. When there is a staffing shortage, the ability to maintain the customers quality of life functioning will suffer. For family members this is important so that their loved ones still maintain a sense of independence. (Agency for Healthcare Research and Quality, 2006) With this the development of a strategic management team that can formulate and implement success. References Agency for Healthcare Research and Quality. (2006). Chapter 5. Factors Important to Consumers when Choosing Residential Care. Rockville, MD. Retrieved September 2, 2014 from www.ahrq.gov/professionals/systems/long-term care/resources/facilities/ltcscan/ltc5.html Brookdale Senior Living Solutions. (2013-2014). Mission and Culture. Retrieved September 16, 2014 from http://www.brookdale.com/about/mission-culture/ Investopedia. (2014). Working Capital. Retrieved September 19, 2014 from http://www.investopedia.com/terms/w/workingcapital.asp United States Securities and Exchange Commission. (2013). Brookdale Senior Living Inc.: Form 10-k. Retrieved September 17, 2014 Yee-Melichar, D., Boyle, A.R., & Flores, C. (2010). Assisted Living Administration and management: Effective Practices and Model Programs in Elder Care. Springer Publishing Company. Retrieved September 14, 2014