BHA FPX 4008 Assessment 2 Financial Statement Analysis

Student Name

Capella University

BHA-FPX4008 Health Care Budgeting and Reporting

Prof. Name

Date

Introduction

This paper conducts an assessment of Vila Health’s economic status through an analysis of its assets and liabilities. Additionally, it examines the evolution of the hospital’s financial state, changes in patient account receivables, alignment of revenue with financial commitments, and the impact of personnel compensation on financial stability (Vila Health, n.d.).

Financial Position

Assets represent the entirety of a hospital’s possessions capable of generating future financial benefits, including cash, land, buildings, and equipment (Golway, 2019). Conversely, liabilities entail financial obligations arising from incurred debts. Unlike liabilities, assets contribute positively to a hospital’s financial position and foster equity within the healthcare sector. A hospital’s financial health is indicated by increasing assets surpassing liabilities (Finkler et al., 2019; Kenton, 2010). As per the hospital’s financial statements, St. Anthony Medical Center’s valuation stands at $191,246,229 million. By consolidating the hospital’s recent FYI 2022 totals for investments, buildings, machinery, and capital resources, total liabilities amount to $231,341,925. This suggests that liabilities exceed total assets, necessitating considerations of spending cuts for the upcoming fiscal year to mitigate financial strain (Vila Health, n.d.).

Comparison with Previous Years

Comparing fiscal years 2022 and 2020, the financial condition of St. Anthony Medical Center for fiscal year 2021 indicates a decrease in both assets and liabilities. In fiscal year 2021, total assets amounted to $187,972,799 million, a decrease of $11.9 million from 2020’s $199,889,346. Notably, liabilities in fiscal year 2021 saw a significant decrease compared to the preceding year. Accounts payable displayed a consistent increase from $12,401,459 million in 2020 to $16,230,075 million in 2022 (Finkler et al., 2020; Kenton & Yushebg, 2019; Vila Health, n.d.).

Changes in Accounts Receivable

Accounts receivable, representing pending sums owed to a hospital for provided services, serve as potential sources of cash earnings. At St. Anthony Medical Center, accounts receivable decreased between fiscal years 2020 and 2021, with further reductions observed between fiscal years 2020 and 2022. Effective billing methods are crucial to reducing accounts receivable and enhancing cash flow. Hospitals are advised to promptly file claims, collect co-payments or deductibles during appointments, and utilize various payment methods to streamline billing processes (Finkler et al., 2020; Golway, 2019; Kenton & Yushebg, 2019; Vila Health, n.d.).

Analysis of Financial Obligations

The analysis of debt and liabilities at St. Anthony Medical Center requires consideration of strategies to reduce them. While liabilities decreased by 4.6% in 2021, they gradually increased by over 3% in 2022. Forming alliances with financial institutions may offer refinancing or restructuring options to aid in debt reduction. Lowering loan rates can enable hospitals to focus on alternative methods to boost profit margins (Kenton, 2010; Mbona & Yusheng, 2019; Vila Health, n.d.).

Analysis of Patient Revenue

Operating revenue from patients at St. Anthony Medical Center has shown a significant increase over the past three years, indicating a promising future. Despite minor fluctuations, net revenue figures exhibit consistent growth trends, emphasizing the facility’s positive trajectory (Kenton, 2010; Mbona & Yusheng, 2019; Vila Health, n.d.).

Analysis of Salary Benefits

Periodic review of hospital personnel needs is essential, considering the significant portion of the budget allocated to employees. Staffing changes, including the elimination of redundant positions, can yield cost savings and optimize operations. While adequate staffing is crucial, optimizing operations can ensure optimal patient care (Golway, 2019; Kenton, 2010).

BHA FPX 4008 Assessment 2 Financial Statement Analysis

Conclusion

Hospitals encounter significant pressure to balance various financial aspects while delivering quality patient care, complying with healthcare regulations, and satisfying investors. Innovative strategies are imperative to navigate financial challenges and ensure sustainability in a rapidly evolving healthcare landscape. With proactive measures to reduce liabilities, enhance revenue streams, and optimize operational efficiency, St. Anthony Medical Center can secure a bright financial future (Vila Health, n.d.).

References

Finkler, S. A., Smith, D. L., & Calabrese, T. D. (2020). Financial management for public, health, and not-for-profit organizations (6th ed.). CQ Press.

Golway, M. (2019). Managing fiscal resources. Journal for Nurses in Professional Development, 35(1), 39-40. https://doi.org/10.1097/NND.0000000000000502

Kenton, W. (2010, August 12). Financial Statement Analysis. Investopedia. https://www.investopedia.com/terms/f/financial-statement-analysis.asp

Lochner, L., & Hill, J. (2020). Hospital Bankruptcies Leave Sick and Injured Nowhere to Go. Bloomberg Health. https://www.bloomberg.com/news/articles/2020-01-09/hospitalbankruptcies-leave-sick-and-injured-nowhere-to-go

Mbona, R. M., & Yusheng, K. (2019). Financial statement analysis: Principal component analysis (PCA) approach case study on china telecoms industry. AJAR (Asian Journal of Accounting Research) (Online), 4(2), 233-245. https://doi.org/10.1108/AJAR-05-2019-0037

Syah, D. H., Ane, L., Hidayat, T., & Rahman, H. (2020). The development of financial statement analysis learning media to enhance student analysis abilities. Assets (Madiun, Online), 9(1), 30-40. https://doi.org/10.25273/jap.v9i1.5348

BHA FPX 4008 Assessment 2 Financial Statement Analysis

Vila Health. Financial Statement Analysis (n.d.). https://media.capella.edu/CourseMedia/bhafpx4008element18840/wrapper.asp