Final Healthcare Budget Request
The Assignment: Final Healthcare Budget Request
Finalize your Healthcare Budget Request by completing the following:
Part 1: Financial Statement Analysis:
Open your Healthcare Budget Request workbook that you created in the previous Assignment, and navigate to the “A6 Financial Statement Analysis” worksheet.
· Using the Healthcare Budget Request Workbook Step-by-Step Guide for guidance, conduct analyses as directed on either your organization’s financial statements or those provided in the Sample Financial Statements document. Your analysis will include spreadsheet calculation of financial statement ratios.
Part 2: Summary of Analyses and Interpretation of Results:
Create a brief (1- to 2-page) description of your analyses. Be sure to address the following in your summary:
· Describe the results of each statement analysis. What do the results of each analysis mean?
· What does your complete financial statement analysis suggest about the financial health of the organization?
· If using your current organization’s data, does your analysis help describe any observed organizational behaviors or actions? Explain.
· What assumptions have you made in your analyses?
· What implications do these analyses have for your proposed healthcare product or service?
Part 3: Summary of Work and Final Healthcare Budget Request
Compile and summarize your work in previous assignments. You may choose to use the Healthcare Budget Request template, located in the Resources, or create a format of your own. Your final Healthcare Budget Request should include:
· A final version of your Executive Summary
· A final version of your projected expenses and revenues
· A product/service budget for the launch and the first 5 years
· A summary of financial and SWOT analyses that you conducted, including your interpretation of the results
· A 3- to 5-slide PowerPoint presentation containing the final version of your elevator speech, incorporating selling points from your analyses that you believe make the business case for nurse entrepreneurship and leadership’s commitment to your proposed healthcare product or service.
REQUIRED REFERENCES:
Penner, S. J. (2016). Economics and financial management for nurses and nurse leaders (3rd ed.). New York, NY: Springer Publishing Company.
· Chapter 12, “Assessing Financial Health” (pp. 365–396)
Kenton, W. (2019, July 6). Financial statement analysis. Retrieved from https://www.investopedia.com/terms/f/financial-statement-analysis.asp
Start, R., Matlock, A. M., Brown, D., Aronow, H., & Soban, L. (2018). Realizing momentum and synergy: Benchmarking meaningful ambulatory care nurse-sensitive indicators. Nursing Economic$, 36(5), 246–251. Retrieved from http://www.nursingeconomics.net/necfiles/2018/SO18/246.pdf
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Good Samaritan Hospital
Income Statements and Changes in Position
December 31, 2018 – 2016
2018 2017 2016
Assets
Patient accounts receivable, net $ 44,039,402 $ 46,017,437 $ 34,225,736 Other current assets 87,522,602 102,527,084 66,241,967 Capital assets, net Other noncurrent assets and deferred outflows of
204,719,836 211,154,622 201,387,401
resources Total assets and deferred outflows
938,311 1,257,809 1,603,307
of resources $ 337,220,151 $ 360,956,952 $ 303,458,411
Liabilities
Long-term debt $ 113,876,659 $ 115,952,338 $ 80,313,219 Other current and long-term liabilities 37,796,533 54,357,418 32,696,643
Total liabilities
Net Position
151,673,192 170,309,756 113,009,862
Net investment in capital assets 88,581,945 91,295,233 119,115,021 Restricted expendable 5,465,665 18,570,364 5,453,581 Unrestricted 91,499,349 80,781,599 65,879,947
Total net position 185,546,959 190,647,196 190,448,549
Total liabilities and net assets $ 337,220,151 $ 360,956,952 $ 303,458,411
2018 2017 2016
Operating Revenue
Net patient service revenue $ 310,211,288 $ 303,993,497 $ 280,794,026 Other operating revenue 12,208,123 12,094,574 13,141,044
Total operating revenue
Operating Expenses Salaries, wages, contract labor and
322,419,411 316,088,071 293,935,070
employee benefits 177,033,557 176,384,829 162,721,361 Purchased services and professional fees 58,052,554 54,443,209 52,056,516 Depreciation and amortization 19,553,513 20,229,896 17,685,393 Other operating expenses 71,036,152 63,774,830 63,321,456
Total operating expenses 325,675,776 314,832,764 295,784,726
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Operating Income (Loss) Before Accelerated
Depreciation on Building Disposal (3,256,365) 1,255,307 (1,849,656) Accelerated depreciation on building disposal (1,617,232) – –
Total operating income (loss)
Nonoperating Revenue (Expenses)
(4,873,597) 1,255,307 (1,849,656)
Investment income 3,729,517 1,021,826 257,528 Net noncapital contribution 7,993 54,213 127,350 Interest expense (3,964,150) (2,132,699) (3,228,183)
Total nonoperating expense (226,640) (1,056,660) (2,843,305)
Increase (Decrease) in Net Position $ (5,100,237) $ 198,647 $ (4,692,961)
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Balance Sheets
December 31, 2018 and 2017
Assets and Deferred Outflows of Resources 2018 2017
Current Assets Cash and cash equivalents $ 36,046,101 $ 38,261,099 Short-term investments 32,247,299 30,155,173 Restricted cash – current Patient accounts receivable, net of allowance; 2017 – $7,826,281
5,465,665 18,570,364
2016 – $15,682,052 44,039,402 46,017,437 Other receivables 6,599,589 8,776,923 Supplies 2,359,749 2,257,673 Prepaid expenses and other 4,804,199 4,505,852
Total current assets 131,562,004 148,544,521
Capital Assets, net 204,719,836 211,154,622
Other Assets 495,941 627,432
Total assets 336,777,781 360,326,575
Deferred Outflows of Resources – losses on debt refunding 442,370 630,377
Total assets and deferred outflows of resources $ 337,220,151 $ 360,956,952
Liabilities and Net Position Current Liabilities
Current maturities of long-term debt $ 2,261,232 $ 3,907,051 Line of credit 5,000,000 7,500,000 Accounts payable 15,208,230 24,663,193 Accrued expenses 13,807,836 16,838,704 Accrued interest 1,460,512 1,050,817 Estimated amounts due to third-party payers 58,723 397,653
Total current liabilities 37,796,533 54,357,418
Long-Term Debt 113,876,659 115,952,338 Total liabilities
Net Position
151,673,192 170,309,756
Net investment in capital assets 88,581,945 91,295,233 Restricted – debt service 5,465,665 18,570,364 Unrestricted 91,499,349 80,781,599
Total net position 185,546,959 190,647,196
Total liabilities and net position $ 337,220,151 $ 360,956,952
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Statements of Cash Flows
Years Ended December 31, 2017 and 2016
2018 2017
Operating Activities
Receipts from and on behalf of patients $ 314,027,727 $ 288,538,254 Payments to suppliers and contractors (141,708,984) (102,347,024) Payments to employees (177,312,208)
(177,753,061) Other receipts 12,208,123 12,094,574
Net cash provided by operating activities 7,214,658 20,532,743
Noncapital Financing Activity – grants and gifts 7,993 54,213
Capital and Related Financing Activities
Proceeds from issuance of long-term obligations – 39,579,757 Net borrowings (repayments) on line of credit (2,500,000) 7,500,000 Principal paid on long-term obligations (3,969,772)
(1,892,601) Interest paid on long-term obligations (5,516,299)
(4,201,374) Payment of debt issuance costs –
(327,217) Purchase of capital assets (12,193,668) (30,695,768)
Net cash provided by (used in) capital and related financing activities Investing Activities
Interest and dividends 1,495,588 863,020 Proceeds from disposition of investments 40,238,130 18,880,161 Purchase of investments (40,096,327) (18,799,498)
Net cash provided by investing activities
Increase (Decrease) in Cash and Cash Equivalents
Cash and Cash Equivalents, Beginning of Year
1,637,391
(15,319,697)
56,831,463
943,683
31,493,436
25,338,027
Cash and Cash Equivalents, End of Year Reconciliation of Cash and Equivalents to the Balance Sheets
Cash and cash equivalents $ 36,046,101 $ 38,261,099 Restricted cash 5,465,665 18,570,364
Total cash and cash equivalents Reconciliation of Operating Income (Loss) to Net Cash
Provided by Operating Activities
$ 41,511,766 $ 56,831,463
$ 41,511,766 $ 56,831,463
(24,179,739) 9,962,797
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Operating income (loss) $ (4,873,597) $ 1,255,307 Depreciation and amortization 21,170,745 20,229,896 Loss on disposal of capital assets 191,944 537,727 Provision for uncollectible accounts Changes in operating assets and liabilities
20,245,385 19,967,903
Patient and other accounts receivable (16,090,016) (35,373,497) Supplies (102,076) (247,031) Prepaid expenses, other assets, and deferred outflows of resources (244,593)
(736,003) Estimated amounts due to third-party payers (338,930) (49,649) Accounts payable and accrued expenses (12,744,204) 14,948,090
Net cash provided by operating activities Supplemental Cash Flows Information
Capital lease obligations incurred for capital assets $ 385,139 $ – Capital asset acquisitions included in accounts payable 1,564,189 1,305,816
$ 7,214,658 $ 20,532,743
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