Question
Table 4 includes the 2018 budget for Jasper Gardens Nursing Home. For your monthly cash budget, assume that one-twelfth of cash expenses and revenues are
Table 4 includes the 2018 budget for Jasper Gardens Nursing Home. For your monthly cash budget, assume that one-twelfth of cash expenses and revenues are incurred per month. Use the following aging analysis to estimate cash inflows. What are the management implications of this analysis?
Table III.4 Aging Analysis
Percent of Bills Paid in Cash Within days of Billing
Days | 30 or less | 3160 | 6190 | 91120 | 121150 |
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Medicare | 5 | 20 | 30 | 40 | 5 |
Medicaid | 0 | 25 | 25 | 25 | 25 |
Commercial |
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Insurance | 25 | 25 | 25 | 10 | 15 |
Private Insurance | 30 | 30 | 30 | 10 | 0 |
Self-Pay | 40 | 30 | 20 | 0 | 10 |
VA | 25 | 15 | 10 | 45 | 5 |
Assume that Accounts Receivable Net as of December 31, 2017, are the same percentage as anticipated revenue to be earned during 2018.
Statement of Operations for the 12-Month Period Ending December 31, 20132017 and the 2018 Budget | ||||||
Statement of Operations | ||||||
Revenue | ||||||
2018 Budget | 2017 | 2016 | 2015 | 2014 | 2013 | |
Room and board | ||||||
Skilled care | ||||||
4,135,329 | Medicare Part A | 3,977,963 | 3,820,494 | 3,820,494 | 3,724,383 | 3,650,292 |
215,383 | Commercial | 202,582 | 225,230 | 210,494 | 236,191 | 190,393 |
Intermediate care | ||||||
3,816,373 | Medicaid | 4,156,604 | 4,198,356 | 4,145,291 | 3,953,282 | 3,640,439 |
1,745,292 | Self-pay | 1,325,988 | 1,839,202 | 1,820,394 | 2,134,203 | 2,340,203 |
97,292 | VA | 92,083 | 92,363 | 90,383 | 189,243 | 83,405 |
139,292 | Private insurance | 97,607 | 45,393 | 23,040 | 21,450 | 18,450 |
10,148,961 | Total room and board | 9,852,827 | 10,221,038 | 10,110,096 | 10,258,752 | 9,923,182 |
Ancillary revenue | ||||||
Skilled care | ||||||
834,282 | Medicare Parts A and B | 795,593 | 790,373 | 713,282 | 702,393 | 650,393 |
54,303 | Commercial | 38,675 | 39,294 | 60,393 | 50,383 | 47,293 |
Intermediate care | ||||||
18,373 | Medicaid | 19,547 | 14,292 | 13,258 | 16,393 | 18,363 |
0 | Other | 0 | 0 | 0 | 0 | 200 |
906,958 | Total ancillary revenue | 853,815 | 843,959 | 786,933 | 769,169 | 716,249 |
Other revenue | ||||||
21,494 | Interest | 18,417 | 13,292 | 15,202 | 16,729 | 18,560 |
3,200 | Miscellaneous | 3,683 | 3,125 | 5,403 | 6,230 | 3,720 |
24,694 | Total other revenue | 22,100 | 16,417 | 20,605 | 22,959 | 22,280 |
11,080,613 | Total revenue | 10,728,742 | 11,081,414 | 10,917,634 | 11,050,880 | 10,661,711 |
(315,230) | Less provider tax | (313,081) | (343,560) | (313,596) | (302,383) | 342,474 |
(3,129,492) | Less ancillary conractual allowances | (3,057,067) | (3,100,867) | (2,948,202) | (3,000,272) | (2,947,353) |
7,635,891 | Total net revenue | 7,358,594 | 7,636,987 | 7,655,836 | 7,748,225 | 8,056,832 |
Expenses | ||||||
2018 Budget | 2017 | 2016 | 2015 | 2014 | 2013 | |
Salaries | ||||||
1,790,400 | Nursing | 1,789,393 | 1,800,249 | 1,840,292 | 1,934,929 | 1,997,239 |
560,304 | Dietary | 556,933 | 555,002 | 550,383 | 480,272 | 515,388 |
120,494 | AncillaryPT | 103,272 | 105,230 | 107,292 | 107,252 | 113,282 |
65,202 | AncillaryOT | 62,701 | 68,303 | 64,393 | 58,303 | 62,120 |
24,300 | AncillaryST | 22,130 | 20,130 | 25,303 | 27,393 | 25,303 |
145,892 | AncillaryRT | 140,155 | 130,202 | 120,303 | 127,303 | 136,303 |
108,202 | Housekeeping | 104,383 | 110,393 | 131,303 | 130,292 | 130,282 |
135,200 | Administration | 131,340 | 141,200 | 178,202 | 204,393 | 180,292 |
109,303 | Social services | 104,838 | 103,292 | 103,202 | 103,684 | 103,606 |
82,340 | Recreation | 79,362 | 80,350 | 78,383 | 74,902 | 78,393 |
75,300 | Physician services | 73,278 | 70,282 | 82,345 | 88,202 | 67,393 |
60,203 | Laundry | 58,964 | 68,002 | 78,393 | 88,303 | 98,303 |
60,392 | Maintenance | 55,282 | 65,303 | 62,010 | 60,292 | 61,202 |
3,337,532 | Total salaries | 3,282,031 | 3,317,938 | 3,421,804 | 3,485,520 | 3,569,106 |
1,134,761 | Benefits, all | 956,838 | 995,381 | 1,094,977 | 1,219,932 | 1,284,878 |
4,472,293 | Total salaries and benefits | 4,238,869 | 4,313,319 | 4,516,781 | 4,705,452 | 4,853,984 |
Admin and general | CY | CY-1 | CY-2 | CY-3 | CY-4 | |
50,000 | Accounting fees | 60,000 | 60,000 | 70,000 | 80,000 | 80,000 |
30,200 | Telephone | 33,799 | 34,292 | 35,292 | 35,920 | 36,303 |
33,000 | Insurancegeneral | 30,319 | 29,200 | 29,500 | 34,290 | 40,202 |
17,500 | Payroll services | 18,228 | 18,200 | 18,400 | 16,393 | 16,300 |
16,200 | MIS management | 16,415 | 16,000 | 16,000 | 15,300 | 15,100 |
12,500 | Dues and licenses | 13,054 | 14,303 | 13,500 | 17,202 | 13,200 |
10,500 | Office supplies | 10,424 | 8,939 | 7,830 | 5,920 | 4,320 |
8,500 | Postage | 9,379 | 9,100 | 9,320 | 8,983 | 7,839 |
8,000 | Legal | 8,000 | 12,503 | 17,394 | 12,302 | 14,393 |
7,893 | Auto | 7,893 | 7,893 | 7,893 | 7,893 | 7,893 |
5,000 | Advertising | 6,000 | 6,000 | 5,780 | 5,500 | 4,000 |
2,000 | Misc. bank charges | 3,800 | 2,000 | 2,560 | 2,830 | 3,210 |
4,500 | Admin equipment rental | 4,785 | 5,640 | 5,500 | 4,950 | 4,640 |
5,000 | Other professional fees | 8,979 | 3,502 | 3,012 | 2,640 | 29,456 |
1,200 | Printing and publishing | 1,489 | 1,648 | 1,102 | 1,100 | 867 |
211,993 | Total admin and general | 232,564 | 229,220 | 243,083 | 251,223 | 277,723 |
Other operating expenses | ||||||
25,300 | Maintenance supplies | 24,010 | 22,310 | 22,740 | 21,640 | 20,765 |
60,383 | Maintenance repairs | 50,880 | 34,272 | 23,784 | 24,450 | 26,780 |
220,450 | Utilitiesall | 219,383 | 240,120 | 250,123 | 250,282 | 260,383 |
21,340 | Oxygen services | 20,175 | 18,393 | 17,202 | 14,383 | 18,303 |
277,500 | Food | 267,039 | 254,499 | 255,206 | 244,351 | 242,993 |
200,450 | General supplies | 202,364 | 190,303 | 183,484 | 178,202 | 178,202 |
31,500 | Laboratory services | 28,511 | 32,404 | 28,400 | 23,450 | 287,340 |
210,494 | Pharmacy services | 207,494 | 215,450 | 212,340 | 215,202 | 225,202 |
10,000 | Imaging services | 11,003 | 13,204 | 15,202 | 11,023 | 9,303 |
64,897 | Medical equipment rental | 64,897 | 64,897 | 64,897 | 60,200 | 60,200 |
920,000 | Capital lease | 900,000 | 900,000 | 900,000 | 900,000 | 900,000 |
200,400 | Depreciationall | 204,783 | 205,294 | 210,494 | 211,474 | 211,574 |
2,242,714 | Total other | 2,200,539 | 2,191,146 | 2,183,872 | 2,154,657 | 2,441,045 |
Nonoperating expenses | ||||||
650,000 | Management fee | 600,000 | 750,000 | 550,000 | 500,000 | 400,000 |
4,000 | Bad debt | 6,600 | 6,000 | 5,325 | 5,270 | 3,120 |
654,000 | Total | 606,600 | 756,000 | 555,325 | 505,270 | 403,120 |
7,581,000 | Total expenses | 7,278,572 | 7,489,685 | 7,499,061 | 7,616,602 | 7,975,872 |
7,635,891 | Total net revenue | 7,358,594 | 7,636,987 | 7,655,836 | 7,748,225 | 8,056,832 |
54,891 | Pretax profit (loss) | 80,022 | 147,302 | 156,775 | 131,623 | 80,960 |
19,212 | All taxes | 28,008 | 51,556 | 54,871 | 46,068 | 28,336 |
35,679 | Profit (loss) after taxes | 52,014 | 95,746 | 101,904 | 85,555 | 52,624 |
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