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Week 8 Assignment 1 Fordsville Community Hospital Assignment 1: Ratio Analysis

APA format, In-text citation

Read number 1 and number 2 as instruction, then for number 1 completed the excel attachment

Ratio Template

Week 8 Assignment 1 Ratio Template
A B D E F G
(in '000)
12/31/22 12/31/23 2022 2023 2022 2023
Ratio[a] [D/E] [F/G] Numerator Denominator Numerator Denominator
Current Ratio
Quick Ratio
Acid Test Ratio
Days in Accounts Receivable
Days Cash on Hand
Average Payment Period (Days)
Operating Revenue per Adjusted Discharge
Operating Expense per Adjusted Discharge
Salary & Benefit Exp. as % of Operating Exp.
Operating Margin
Non-Operating Revenue
Return on Total Assets
Return on Net Assets
Total Asset Turnover Ratio
Fixed Asset Turnover Ratio
Age of Plant Ratio
Long-Term Debt to Net Assets
Net Assets to Total Assets

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© 2020 Laureate Education, Inc. Page 1 of 3

Healthcare Financial Management and Economics

Week 8 Assignment 1 — Fordsville 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 Fordsville Community Hospital and analyze the organization’s financial health.

Fordsville Community Hospital

Fordsville 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.

Fordsville Community Hospital Statement of Operations (in thousands) for the Years Ended December 31, 2018 and 2019

2018 2019

Revenues Net patient service revenue $23,000 $19,000 Net assets released from restriction 1,000 800 Total operating revenues 24,000 19,800

Expenses Salaries and benefits 13,000 9,000 Supplies and other expenses 7,000 6,000 Depreciation 2,500 2,000 General services 200 100 Total operating expenses 22,700 17,100

Operating income 1,300 2,700 Non-operating income 4,000 2,500

Excess of revenues over expenses 5,300 5,200

Increase (decrease) in net assets $5,300 $5,200

© 2020 Laureate Education, Inc. Page 2 of 3

Fordsville Community Hospital Balance Sheet (in thousands) for the Years Ended December 31, 2018 and 2019

2018 2019 Current assets Cash and cash equivalents

$700 $500

Net patient receivables 4,000 3,500 Inventory 950 750 Total current assets 5,650 4,750

Non-current assets Plant, property, and equipment Gross plant, property, and equipment

26,500 24,000

(less accumulated depreciation)

(18,000) (17,000)

Net plant, property, and equipment

8,500 7,000

Board-designated funds 18,000 9,000

Total assets 32,150 20,750

Current liabilities Accounts payable 2,500 2,000 Accrued expenses 900 250 Total current liabilities 3,400 2,250

Long-term liabilities Bonds payable 6,500 8,000 Total long-term liabilities 6,500 8,000

Net assets 22,250 10,500

Total liabilities and net assets

$32,150 $20,750

To prepare for this Assignment:

Examine the financial statements from Fordsville Community Hospital. Reflect on how you will use this financial data to calculate and analyze the organization’s financial ratios. Refer to Chapter 13 of Gapinski's Understanding Healthcare Financial Management for additional guidance.

© 2020 Laureate Education, Inc. Page 3 of 3

The Assignment:

Using the statement of operations and balance sheet for Fordsville Community Hospital, complete the “Week 8 Assignment 1 Ratio Excel Template”.

Your Assignment is due by Day 7 of Week 8.

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© 2020 Laureate Education, Inc. Page 1 of 1

Healthcare Financial Management and Economics

Week 8 Assignment 2 — Northern Plains 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 Northern Plains Imaging Center and calculate break-even points.

Scenario: Northern Plains 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 place or should she add another aide. She currently uses 2 mammography units, 2 Certified Technologists, and 1 aide. She has analyzed the current costs and determined the following: Reimbursement per screen $85 Equipment lease per month ($800 per machine) $1600 Certified Technologists costs per mammography ($25 per Tech) $50 Technologist aide per mammography $5 Variable cost per mammography $10 Equipment maintenance per month ($700 per machine) $1400

To prepare for the Assignment:

Examine the Northern Plains Imaging Center scenario. Reflect on how you will use the provided financial data to calculate break-even points. Refer to Chapter 11 of Gapinski’s Understanding Healthcare Financial Management 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 $55 per screen

and no profit. D. Solve for volume needed to break even with one(1) additional aide.

Your Assignment is due by Day 7 of Week 8.

  • Healthcare Financial Management and Economics
  • Week 8 Assignment 2 — Northern Plains Imaging Center

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