Financial Data Analysis

Introduction Between the years 2009 and 2008 there were multiple financial changes to the Patton – Fuller Community Hospital. Using a combination of the balance sheet, statement of revenue and expenses, and also the 2009 hospital’s annual report we are able to see how the years differ in a financial situation. This paper will explain the differences in the finances that had the largest impact on the company as a whole. Balance Sheet The assets of the company played a large role in the large jump of the numbers between 2009 and 2008. Between the two years there was a total change of 7. 5 percent of the total asset which equaled $39,232 dollars. The largest change came from a 56. 10 percent increase in the patient’s accounts receivables, a change of $21,121 dollars. Cash and cash flow equivalents equaled a 45. 10 percent decrease, a change of $18,856 dollars. The inventories offered a 19 percent increase, a change of $10,026 dollars (Apollo Group, 2013). According to the annual report, there was a 1 million dollar donation that provided the hospital with an opportunity to buy new equipment and supplies (Apollo Group, 2013). The liabilities of the company also proved to have multiple changes over time.Due to the purchase of the new equipment there has been a large increase of the debt accrued by the company according to the annual report. Borrowing became necessary to cover all the necessary equipment. The report also stated that an increase of supply purchases would save money in the long run due to the discounted cost at the time of the purchase (Apollo Group, 2013). The current long term debt increased 114. 80 percent a change of $10,414 dollars. The accrued expenses also rose 119. 80 percent a change of $5,013 dollars, leaving a total liability increase of 16. percent companywide leaving a change of $248,703 dollars. (Apollo Group, 2013). The total equity of the company fell between 2009 and 2008. The hospital did not do so well, although most of the shortfall can be attributed to the increase of assets they accrued over the change of 2009 to 2008. The retained earnings between the two years fell 62. 50 percent a loss of $209,471 dollars. This pushed the total liabilities and equity up by 71. 50 percent providing a difference of $39,232 dollars. 2008 proved to be a better year for the company then 2009 (Apollo Group, 2013).Statement of Revenue and Expenses The Patton – Fuller Community Hospital ended the year of 2009 with a new income of a negative $373 dollars. This is actually an increase of revenue from the loss of $15,846 dollars they finished with in 2008. The percentage of change between the two years increased to 97. 60 percent. The total expenses between the two years can attribute to the large changes that were made with the net income. In 2009 the company had a total expense of $463,293 dollars, an increase of spending by 59. 20 percent from 2008 when the total expenses were $437,424 (Apollo Group, 2 013).Between 2009 and 2008 there were slight increases of the revenues by the company. In influx of patients were seen in 2009 leaving a 9. 90 percent change of $41,391 dollars between the two years. Other revenues also provide a 9. 87 percent change leading to a $277 increase for 2009. The total revenues equaled $41,668 more dollars for the company in 2009. With a 9. 89 percent increase of revenue 2009 made $462,982 dollars compared to the $421,314 dollars made in 2008 (Apollo Group, 2013). 2009 provided an increase of the fixed assets; in result of this we saw an increase by 44 percent for the depreciation and amortization of the company.The total operating income fell 98. 10 percent in 2009. Although the company was negative $311 dollars, it was still a better place to be then the $16,110 dollars from 2008. The company had a non-operating income loss of $62 dollars which was a 76. 50 percent change from 2008 of $264 dollars (Apollo Group, 2013). Conclusion When a company is provi ded with a large donation it can do great things for what the facilities are able to provide to their patients. With the increase of new equipment and supplies the company’s need to finance has become apparent by their financial records.Although it is good to have new amenities for the patients, running a company on credit is not always what is best. There is a large need for the Patton – Fuller Community Hospital to watch spending and decrease their financial debts. References Apollo Group, Inc. (2013). Patton – Fuller Community Hospital. Annual Report 2009. Apollo Group, Inc. (2013). Patton – Fuller Community Hospital. Balance sheet as of December 31, 2009 and 2008. Apollo Group, Inc. (2013). Patton – Fuller Community Hospital. Statement of Revenue and Expense 2009 and 2008. Financial Data Analysis Financial Data Analysis Daphnnee Johnson HCS 577 March 18, 2013 Sharon Gomes-Sanders Financial Data Analysis After reviewing the balance sheet for Patton-Fuller Hospital for 2008 and 2009, there are significant differences that are noticeable. The retained earnings (or â€Å"Net Worth† or â€Å"Unrestricted Fund Balance†) drastically decreased from 2008 to 2009 (Apollo Group, 2006). The dollar amount decrease is -209,471, this makes a decrease of over 65%. Long-term debt increase to more than 116% from 2008 to 2009 as well (Apollo Group, 2006). This is a massively huge increase.Total current liabilities also increase as a whole by 184. 09% (Apollo Group, 2006). Major differences are also noted on the statement of revenue and expenses. The operating income decreased by 98% from 2008 to 2009 (Apollo Group, 2006). Net income also decreased between these years by the same percentage. Non-operating income decreased by 77% as well. The total revenue and expenses all seem with in normal range, but the operating income, non-operating income, and net income all have decreased and drastically (Apollo Group, 2006). The total revenue increased by 10% that is $41,668. The expenses increased by $25,869 or 5. 1%. These all seem like reasonable slight increases (Apollo Group, 2006). Many factors can contribute to why there are so many fluctuations and changes between 2008 and 2009. This information usually can be found in the organization’s annual report. Upon reviewing the Patton-Fuller Community Hospital’s annual report, I could deduct some possible explanations for the drastic change in numbers from 2008 to 2009 (Apollo Group, 2006). One possible explanations is, â€Å"Utilities and other costs – contracted maintenance, some professional fees, and computer and other usage fees – do not fluctuate† (Apollo Group, 2006, p. ). This would be an accurate reason the revenue seems so different. Another factor that made Patton-Fuller C ommunity Hospital’s numbers change so drastically between the two years is the passing of the hospital’s benefactor, Abigail Baderman (Apollo Group, 2006). This occurred in 2008, but in 2009 in accordance to her will, the hospital received a money donation from her estate. This $1,000,000 donation is noted as an unrestricted donation (Apollo Group, 2006). This unrestricted donation is recorded on the Interim Statement of Income in December 2009 (Apollo Group, 2006). Declines in the stock market and real estate markets resulted in a sharp drop in the return on investment income. This caused PFCH to reassess the value of its investments and, on their auditors’ advice, to write down those assets (Apollo Group, 2006, p. 3). Another reason the number were so drastically different was because every December Patton-Fuller Community Hospital conducts an annual inventory (Apollo Group, 2006). When the hospital conducted its inventory their expenses for their supplies wer e way underestimated by about a million dollars (Apollo Group, 2006).So this had to be added on as a cost to December’s statement. This underestimate of supply expenses made January to November’s reports not correct, so December had to report the actual figures (Apollo Group, 2006). Therefore, December looked like it was a crazy month for the hospital. â€Å"Following the favorable settlement of some managed care contract disputes, net patient revenue increased by 9% over the previous year, with an average 6% increase in expenses. However, the new arrangement allowed slower payment by the managed care companies, and Patient Accounts Receivable have risen sharply† (Apollo Group, 2006, p. ). The Board at Patton-Fuller wanted to take advantage of a heavy discount on new equipment so they moved some money around to purchase the discounted equipment (Apollo Group, 2006). This was possible by using cash and releasing restricted assets, and borrowing as necessary (Apol lo Group, 2006). â€Å"Declines in the stock market and real estate markets resulted in a sharp drop in the return on investment income. This caused PFCH to reassess the value of its investments and, on their auditors’ advice, to write down those assets (Apollo Group, 2006, p. 3). In conclusion, there were some drastic difference between the ears 2008 and 2009 on both the statement of revenue and expenses as well as the balance sheet. However, all of these significant changes, whether they are positive or negative changes can all be accounted for by various factors. Some of the factors included a generous donation of a million dollars, favorable settlements of managed care contract disputes, investments in new, discounted equipment, and the underestimation of the supply expenses. References Apollo Group. (2006). Patton-Fuller Community Hospital [Multimedia]. Retrieved from Apollo Group, HCS577 – Financial Management in Health Care website.