Mechanisms for Evaluating Financial Health of Health Care OrganizationsThe board of directors of...

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Mechanisms for Evaluating Financial Health of Health Care Organizations

The board of directors of Pearland Medical Center is working on a strategic financial plan for its Urology Surgery Hospital facility. One of the strategic goals is to build a new $1 million prostate cancer research wing in five years. The board is concerned that current economic conditions might reduce revenues over the next five years and they are uncertain about the fate of the planned construction project. You are a part of the team tasked with conducting a capital budgeting analysis.

Urology Surgery Hospital reported $1.5 million in revenue in 2012 and $1.3 million in 2013. The hospital’s equity was $2 million in 2013; the equity was $2.41 million in 2012. The hospital received delayed third-party payments in 2013 of $500,000.

The hospital received $250,000 in grants in 2013.

The hospital's current liabilities included operating costs of $1 million in 2012 and $1.2 million in 2013. In addition, the hospital retired $150,000 of debt in 2012 and 2013 (though it still held $750,000 in debt in 2013, compared to long-term debt of $900,000 in XXXXXXXXXXThe hospital funded the employee pension plan with matching funds of $150,000 in both 2012 and 2013. Malpractice costs were $150,000 in 2012 and 2013. Depreciation expenseswere $100,000 in 2012 and $105,000 in 2013. The hospital is a nonprofit facility so it incurs no tax liabilities.

Income Worksheet

	ASSETS		LIABILITIES		NET WORTH
	2012	2013	2012	2013	2012	2013
Operating expenses			1,000,000	1,200,000
Debt retirement			150,000	150,000
Retirement plan			150,000	150,000
Malpractice costs			150,000	150,000
Depreciation			100,000	105,000
Long term debt			900,000	750,000
Net worth (Total equity)					2,410,000	2,000,000
Revenue	1,500,000	1,300,000
Equipment and fixtures	1,000,000	1,000,000
Delayed payments	0.00	500,000
Grants	0.00	250,000
Cash in bank	2,360,000	1,455,000

Using the format below, on page 1 of your paper, create a balance sheet as of December 31, 2012, and a balance sheet as of December 31, 2013. Compose them in a table, next to each other, so it will be convenient to compare. You can copy/paste the table below into a Word document.
Calculate the Current Ratio, Working Capital, and Leverage (or Debt/Worth Ratio) for 2012and2013 (include those in your paper).

Discuss the financial trends you believe the board should note in their planning.

	UrologySurgery Hospital BalanceSheet as of Dec 31, 2012	UrologySurgery Hospital BalanceSheet as of Dec 31, 2013
Assets
Current Assets
Cash in Bank
Revenue
Delayed Payments
Grants
Total Current Assets
Fixed Assets
Equipment and Fixtures
(less Depreciation)
Total Fixed Assets
Total Assets
Liabilities
Current Liabilities
Operating Expenses
Debt Retirement
Retirement Plan
Malpractice Costs
Total Current Liabilities
Long-Term Liabilities
Long-Term Debt
Total Liabilities
Net Worth (Total Equity)
Total Liability and Net Worth

Length: 3–4 pages, excluding title page and references.

I need 4 pages, APA, 3-4 in-text citations, 3-4 references

tae_636669663922569985_119620_1.docx tae_636669663922569985_119620_2.docx

Uk · Accepted Answer

1) Balance Sheets for the years 2012 and 2013 (amounts in $):
	 
	Urology Surgery Hospital Balance Sheet as of Dec 31, 2012
	Urology Surgery Hospital Balance Sheet as of Dec 31, 2013 
	Assets
	 
	 
	   Current Assets
	 
	 
	      Cash in Bank
	2,360,000
	1,455,000
	      Revenue
	1,500,000
	1,300,000
	      Delayed Payments
	 
	500,000
	      Grants
	 
	250,000
	   Total Current Assets
	3,860,000
	35,05,000
	   Fixed Assets
	 
	 
	      Equipment and Fixtures
	1,000,000
	1,000,000
	      (less Depreciation)
	100,000
	105,000
	   Total Fixed Assets
	900,000
	895,000
	Total Assets
	4,760,000
	4,400,000
	Liabilities
	 
	 
	   Current Liabilities
	 
	 
	      Operating Expenses
	1,000,000
	1,200,000
	      Debt Retirement
	150,000
	150,000
	      Retirement Plan
	150,000
	150,000
	      Malpractice Costs
	150,000
	150,000
	   Total Current Liabilities
	1,450,000
	1,650,000
	   Long-Term Liabilities
	 
	 
	      Long-Term Debt
	900,000
	750,000
	Total Liabilities
	900,000
	750,000
	Net Worth (Total Equity)
	2,410,000
	2,000,000
	Total Liability and Net Worth
	4,760,000
	4,400,000
2) Current Ratio, Working Capital,

Mechanisms for Evaluating Financial Health of Health Care Organizations The board of directors of Pearland Medical Center is working on a strategic financial plan for its Urology Surgery Hospital...

Mechanisms for Evaluating Financial Health of Health Care Organizations

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