HCS 4 Week 3 Financial Statements Review

Topics: Generally Accepted Accounting Principles, Balance sheet, Income statement Pages: 6 (1091 words) Published: May 4, 2015


Financial Statements Review
Health Care Financial Accounting-HCS/405
May 4, 2015
Facilitator
Introduction
It is essential in any business, not just health care to understand how finances directly affect the growth, success and longevity of the business and all its parts. To truly understand how finance affects business it is important to gain knowledge and understanding of how the business generate revenue ,the cash flow of money that comes into the business, how bills are paid and money leaves the business and how investments are made in the business that can directly and indirectly impact the financial growth of the organization. In health care organizations there are different factors that come into play in the financial department but ultimately the process of generating revenue and paying debts are the same as any other business organization. The following items will be addressed in the review of Patton-Fuller financial statements: Annual report, including Patton-Fuller financial statements and relationship between revenue sources and expenses on Patton-Fuller’s financial performance. How did the audited and unaudited financial statements differ? In general the audited reports are more formal than the unaudited reports. The audited report includes the company’s history, a CFO report, a message from the CEO, and a report of independent auditors. The audited and unaudited financial statements differ slightly in data in some areas for Patton- Fuller Community Hospital. Under the assets section in the numbers for patients accounts receivable numbers differ slightly from 2009. In 2009 on the unaudited report it provides the data of 59,787 and on the audited it has 58,787. This also leaves the total current assets and the total assets to differ slightly for 2009. On the audited report total current assets for 2009 are 127,867 and on the unaudited report it has 128,867. On the unaudited report the total assets for 2009 are 588,767 and 587,767 on the audited. Under the total liabilities calculations the retained earnings for 2009 differ slightly. The data for 2009, on the unaudited report gives 126,564 while the audited report gives 125,564. What is the effect of revenue sources on financial reporting at the hospital? The effect of revenue sources on financial reporting at the hospital are that it is variable and could adjust as the reports get audited and could change year to year. Revenue comes from a few different sources and can be located on the financial statements and reports for the year. According to the information on the balance sheet, the sources of the “Other Revenue” are third party payers of patient bills. For the income statement, the revenue is used to calculate the operating income and ultimately the net income. The Net Income value is factored into our “Statement of Owners' Equity” report to give us our end of the year value for retained earnings and stockholders' equity. Net patient revenue is the first and foremost source of income for Patton-Fuller Hospital. Other sources of revenue come from borrowing monies, equity from stock or capital, and company assets. In 2008, the net patient revenue was $418,509 in the audited report. The total other revenue for 2008 accounted for $2,805 in the audited report as well. These amounts did not change from the unaudited report. The net patient revenue for 2009 was $459,900, and other revenue was $3,082 for that year. For Patton-Fuller Hospital, the income statement shows the total revenues increased by $41,668 from 2008 ($421,314) to 2009 ($462,982 Upon further reading on the reports we find that the total expenses goes over the amount of revenue the hospital is bringing in. The total expenses for 2008 were $437,424 and for 2009 it was $463,293. ). However, since expenses continued to exceed the total revenues, our net income remained a net loss in 2009 ($373). So the overall effect of the sources on the hospital is that the hospital is going in...
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