Assignment - Springfield Community Hospital
Assignment 1: Ratio Analysis
It is important to understand that when interpreting financial statements, the numbers alone may not provide the whole financial picture of an organization. Instead, you must analyze the statements using ratios, which are then compared to benchmarks across the healthcare industry. For this Assignment, you examine the financial documents for Springfield Community Hospital and analyze the organization's financial health.
Springfield Community Hospital
Springfield Community Hospital is a small community hospital serving a rural population. The adjusted discharges are 3.30 for the 1st year and 3.10 for the 2nd.
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Springfield Community Hospital
Statement of Operations (in thousands) for the
Years Ended December 31, 2016 and 2017
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2016
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2017
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Revenues
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Net patient service revenue
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$21,000
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$17,000
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Net assets released from restriction
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1,000
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800
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Total operating revenues
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22,000
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17,800
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Expenses
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Salaries and benefits
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12,000
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8,000
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Supplies and other expenses
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6,000
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5,000
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Depreciation
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2,300
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1,900
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General services
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200
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100
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Total operating expenses
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20,500
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15,000
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Operating income
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1,500
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2,800
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Non-operating income
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3,500
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2,200
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Excess of revenues over expenses
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5,000
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5,000
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Increase (decrease) in net assets
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$5,000
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$5,000
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Springfield Community Hospital Balance Sheet (in thousands) for the
Years Ended December 31, 2016 and 2017
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2016
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2017
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Current assets
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Cash and cash equivalents
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$600
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$400
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Net patient receivables
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4,000
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3,500
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Inventory
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900
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800
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Total current assets
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5,500
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4,700
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Non-current assets
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Plant, property, and equipment
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Gross plant, property, and equipment
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25,000
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23,000
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(less accumulated depreciation)
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(18,000)
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(17,000)
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Net plant, property, and equipment
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7,000
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6,000
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Board-designated funds
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18,000
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9,000
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Total assets
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30,500
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20,250
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Current liabilities
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Accounts payable
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2,500
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2,000
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Accrued expenses
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850
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900
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Total current liabilities
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3,350
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2,900
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Long-term liabilities
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Bonds payable
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5,500
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7,500
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Total long-term liabilities
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5,500
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7,500
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Net assets
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21,650
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9,850
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Total liabilities and net assets
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$30,500
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$20,250
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To prepare for this Assignment:
Examine the financial statements from Springfield Community Hospital. Reflect on how you will use this financial data to calculate and analyze the organization's financial ratios. Refer to Chapter 4 of Financial Management of Health Care Organizations: An Introduction to Fundamental Tools, Concepts and Applications for additional guidance.
The Assignment:
Using the statement of operations and balance sheet for Springfield Community Hospital.Assignment 2 - Atlantic Imaging Center
Assignment 2: Break-Even Point Formulas
Before making hiring or purchasing decisions, healthcare organizations must consider whether the decision is financially profitable. By calculating break-even points, organizations are able to examine actual costs and make more sound financial decisions. For this Assignment, you use data from the Atlantic Imaging Center and calculate break-even points.
Scenario: Atlantic Imaging Center is a small imaging center with two analogue film or screen units. As the director of the center, Juanita Hernandez has been asked to determine if the current staffing is correct for her department for her place or should she add another technologist. She currently uses 2 mammography units, 2 technologists, and 1 aide. She has analyzed the current costs and determined the following:
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Reimbursement per screen
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$80
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Equipment costs per month ($800 per machine)
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$1,600
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Technologists costs per mammography
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$18
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Technologists aide per mammography
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$5
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Variable cost per mammography
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$9
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Equipment maintenance per month per machine ($375 per machine)
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$750
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To prepare for the Assignment:
Examine the Atlantic Imaging Center scenario. Reflect on how you will use the provided financial data to calculate break-even points. Refer to Chapter 9 of Financial Management of Health Care Organizations: An Introduction to Fundamental Tools, Concepts and Applications for additional guidance.
The Assignment:
Given the above information, use the "Week 8 Assignment 2 Break Even Excel Template" to answer these items as a Department:
A. Solve for monthly volume to break even.
B. Solve for monthly volume needed to break even at desired $5,000 per month profit level.
C. Solve for volume needed to break even at new reimbursement of $104 per screen and no profit.
D. Solve for volume needed to break even with an additional technologist.
Attachment:- Template-Ratio Analysis.rar