Analyse on Strategic Assessment & Financial Ratio

Exhibit 4.19a Longwood Community Hospital Statement of Operations for the Year Ended December 30, 2021 and 2020(in thousands) 2021 Revenues Net patient service revenue Other revenue Total operating revenues 54000 1000 55000 Expenses Salaries and benefits Supplies and other expenses Depreciation Total operating expenses Operating income Increase (decrease) in net assets 23000 20000 10000 53000 2000 2000 Exhibit 4.19b Longhood Community Hospital Balance Sheet December 31, 2021 and 2020 (in thousands) 2021 Current Assets Cash and cash equivalents Net patient receivables Prepaid expenses Total current assets Non current assets Plant, property, and equipment Gross plant, property, and equipment Less accumulated depreciation Net plant, property, and equipment Construction in progress Total assets Current Liabilities Accounts payable Salaries payable Total current liabilities Long-term Liabilities Bonds payable Total long-term liabilities Net assets Total liabilities and net assets 6000 10000 1400 17400 27000 1500 25500 1000 43900 500 7800 8300 9000 9000 26600 43900 2021 53000 500 53500 22000 23000 9000 54000 -500 -500 1 and 2020 (in thousands) 2020 4000 8500 1300 13800 24000 1300 22700 4000 40500 750 9000 9750 8000 8000 22750 40500 Problem: Compute the ratios for both years: 1. Current Ratio 2. Acid Test 3. Days in accounts receivable 4. Average payment period 5. Long-term debt to net asset 6. Net Assets to Total Assets 7. Total asset turnover 8. Fixed asset turnover 9. Operating revenue per adjusted discharge 10. Operating expense per adjusted discharge Salary and benefit expens as pa percentage of total operating expense 12. Return on total asset 13. Operating margin After calculating the ratios, comment on Longwood efficient use of asset, or activity ratios, revenue, e Please check the book to find it. sset, or activity ratios, revenue, expense and profitability, and capital structure relative to its industry benchmarks for its respective bed s enchmarks for its respective bed sid listed in exhibit 4.16a. Cite atleast two meaningful ratios per category Ratio Analysis Part One Complete problem 13 on ratio analysis on page 188 of your Financial Management of Health Care Organizations text by Zelman, McCue, Glick, and Thomas (linked in Resources). Using an Excel spreadsheet, calculate all of the ratios listed in the problem (13 ratios for each year or 26 total for 2 years). Part Two Use your answers from part one to complete the following: Conduct a strategic assessment based on the health care data presented for Longwood Community Hospital. • Analyze the 26 financial ratios calculated for the hospital to state its financial position. • Develop a perspective on long-term financial trends for the hospital. • Assess the potential financial impact on the hospital’s organizational strategy and potential implications on patient care based on the benchmark data provided. Write a 3–5 page paper based on the above. • Submission Requirements Your paper should meet the following requirements: • • • • Written communication: Your document should clearly identify where each grading criteria or part of the assignment is addressed by using APAformatted headings and subheadings. Your writing needs to communicate professionally, with correct English usage. Your points must be logical, substantive, and relevant based on the evidence presented. In addition, your communication should be free of errors that detract from the overall message. APA formatting: Resources and citations are formatted according to APA sixth edition style and formatting. Documents to be submitted: You need to submit the following: • Spreadsheets. • Word document: 3–5 pages with APA-formatted headings and subheadings. Font and font size: Arial, 10 point. • • Nowicki, M. (2018). Introduction to the financial management of healthcare organizations (7th ed.). Chicago, IL: Health Administration Press. • Chapter 3, “Financial Analysis and Management Reporting,” pages 49– 74. Zelman, W. N., McCue, M. J., Glick, N. D., & Thomas, M. S. (2014). Financial management of health care organizations: An introduction to fundamental tools, concepts, and applications (4th ed.). Hoboken, NJ: Wiley. • Read Chapter 4, “Financial Statement Analysis,” pages 137–183. • Review problem 13 on ratio analysis on page 188 in preparation for the assignment in this unit.
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