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.

Table 4:

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