RIVER COMMUNITY HOSPITAL (B) Financial Forecasting

1. Review the spreadsheet model, paying particular attention to (1) what assumptions are currently embedded in the model, (2) how the financial forecasts are developed, and (3) how financing feedbacks are handled. Briefly describe the model and its assumptions.

2. Disregard the forecasting results supplied with the model.

   1. Use your own assumptions to develop the hospital's forecasted financial statements. Be sure to

      analyze your results from the perspectives of both accounting consistency and financial feasibility.

   2. Use the current industry comparative data given in case 1 to help assess the hospitals projected

      financial condition. Summarize your results in a table that shows key financial ratios, retained earnings, and external financing requirements (if required) for each year, along with five-year totals for earnings and financing.