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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

Medicare

5

20

30

40

5

Medicaid

0

25

25

25

25

Commercial

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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