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Financial Statement Analysis
BHA FPX 4008 Assessment 2 financial analyses are regenerative to achieve operation efficiency and provide proper decision-making within the healthcare institution. Among all the healthcare organizations, as well as organizations belonging to different fields in the United States, the most frequently used management accounting tools include financial and income statements (Shiri et al., 2021). Thus, the economic success for the current year, as well as the past two years of St. Anthony Medical Center (SAMC), has been evaluated. The assessment on purpose and scope is aimed at defining potential variables to analyze the chances of SAMC’s success or failure. At the same time, the assessment includes limiting recommendations that can enhance its status in the US healthcare market.
Financial Position
A breakdown of SAMC’s balance sheet for the current year has been conducted and analyzed to determine the company’s position. More liabilities than lower total assets imply that the company’s financial situation is weak, and a drastic change in SAMC’s financial situation is required to enhance the organization’s financial position.
Recommendations
The summary of financial data for recent years, as well as current market research along with stakeholders, should be relied upon to forecast the financials for the next year by SAMC. This recommendation is annexed with the help of Urokov et al. (2021). According to Yu and Mouritsen (2020), low capital investments planned for the next period will allow for the meeting of the deficiency of assets at healthcare institutions regarding their liabilities. BHA FPX 4008 Assessment 2 SAMC is advised to have low budgetary estimations for acquisition and equity investments. When these recommendations are applied to the forecast of the liabilities at SAMC, more additions can be made, creating more savings, which means paying off additional savings.
Compare Financial Position to Previous Years
The difference between the liabilities and assets has, however, increased at SAMC compared to the previous year; specific improvements are still needed. BHA FPX 4008 Assessment 2 Increasing revenues by providing high-quality care at minimum operational costs is recommended by SAMC (Shiri et al., 2021). The reduction in operational expenses has been proposed to gain higher stability in the assets and liabilities to improve the financial position in the upcoming fiscal years, according to the guidelines provided by Urokov et al. (2021).
BHA FPX 4008 Assessment 2 accounts Receivable Changes
There is, however, a variation of the liabilities and the assets, and as much as the difference between the two has improved at SAMC compared to the previous year, some enhancements are still required. To achieve this suggestion, the following strategies are recommended for SAMC. The strategies aim to increase revenues by offering high-quality care services at minimum operational costs. This has been mooted to cut down on the operational expenses in order to attain a higher fixed balance between the assets and the liabilities with the intention of having a sounder financial structure in the future fiscal years, as proposed by Urokov et al. (2021).
Click here to get: BHA FPX 4008 Assessment 1 Developing an Operating Budget
Consequently, the decrease in the accounts receivable is beneficial in increasing the cash flow of the brainy and capable SAMC. Hence, it is suggested that for all the promises of collecting money, healthcare institutions should adopt techniques of paying installments with the reimbursement authorities as well as the uninsured individuals. As mentioned before, the recommendation was backed by Brevoort and colleagues in 2020. The recommendation that is suggested by Chaudhuri et al. (2022) also helps in reducing the accounts receivables. As concluded by the research for SAMC, the use of data mining tools will assist in achieving more significant payments through reimbursements, hence reducing accounts receivable collectively (Chaudhuri et al., 2022).
BHA FPX 4008 Assessment 2 Analyze the Financial Obligations
The application of cost-cutting methods and eradicating processes that do not interrupt care delivery reduces operating expenses and hence saves revenue (Shiri et al., 2021). In light of this, the following recommendations are concerning SAMC: In order to optimize the efficiency of coal production, all wasteful processes should be removed from the company. Flowing in the same logic, savings should be set to pay off the long-term debt. Another receivable that needs to be paid at SAMC is the current debt or the note payable, which requires decreasing the accounts receivable, enhancing cash flow, making billing effective, and faster reimbursements based on Urokov et al. (2021).
Analyze Patient Revenue
Based on these figures, it is evident that the revenue has been rising at the healthcare institution in the past three years, meaning that SAMC’s financial health will also improve. BHA FPX 4008 Assessment 2 operational expense has, however, increased, thereby decreasing the profit margin or the net revenue for the current year and the previous year. This means that more operational expenses are owed to high accounts receivables and low cash inflows to produce high accounts payable and thereby offer quality care. So, the overall financial health of SAMC can be threatened by a low amount of ‘Net Revenues. ’
The situation can result in SAMC being rendered unable to meet its obligations, and this will also prove devastating to the company’s standing within the United States health sector. BHA FPX 4008 Assessment 2 SAMC is advised here to help decrease the operating cost in order to increase the operating profit margin for the betterment of this health organization’s financial status, as proposed by Shiri et al. (2021). Similarly, Brevoort et al. (2020) and Urokov et al. (2021) noted that for healthcare institutions like SAMC, there is a need to adopt practices for lowering expenditures and faster billing to enhance good cash inflows.
Conclusion
BHA FPX 4008 Assessment 2 financial strength/solvency analysis based on the performance of the current year showed that SAMC’s economic health was poor. The excess of liabilities over the assets was also noted, putting out negative Returns on financial investment. On the contrary, the SAMC sets of Shaves have been reported to have risen in the past three years. Account receivables fell, but that produced an increase in the company’s cash flow. The operating expenses in the last three years also rose hand in hand with the overall healthcare institution’s revenue. This informed the need for SAMC to cut down on operational costs in order to enhance the efficiency of operations as well as the quality of services it offered in the health facility in order to clear the debts, hence lowering the liabilities.
References
Brevoort, K., Grodzicki, D., & Hackmann, M. B. (2020). The credit consequences of unpaid medical bills. Journal of Public Economics, 187. https://doi.org/10.1016/j.jpubeco.2020.104203
Chaudhuri, R., Parsa, S. P. K., Nagpal, D., & Kalaivanan, R. (2022). Time to response prediction for following up on account receivables in healthcare revenue cycle management. Communications in Computer and Information Science, 1, 124–137. https://doi.org/10.1007/978-3-031-12641-3_11
Shiri, T., Birungi, J., Garrib, A. V., Kivuyo, S. L., Namakoola, I., Mghamba, J., Musinguzi, J., Kimaro, G., Mutungi, G., Nyirenda, M. J., Okebe, J., Ramaiya, K., Bachmann, M., Sewankambo, N. K., Mfinanga, S., Jaffar, S., & Niessen, L. W. (2021). Patient and health provider costs of integrated HIV, diabetes, and hypertension ambulatory health services in low-income settings — An empirical socio-economic cohort study in Tanzania and Uganda. BioMed Central Medicine, 19(1), 1–15. https://doi.org/10.1186/s12916-021-02094-2
Urokov, U., Yunusovich, Gaipovna, T., Mashhura, S., & Mansurovich, I. (2021). Matters of revenue generation and cost optimization while increasing the efficiency of the state budget. Natural Sciences, 48(12). https://johuns.net/index.php/publishing/240.pdf
Yu, L., & Mouritsen, J. (2020). Accounting, simultaneity, and relative completeness: The sales and operations planning forecast and the enactment of the “demand chain.” Accounting, Organizations and Society, 84(1). https://doi.org/10.1016/j.aos.2020.101129
