Running head: FINANCIAL DATA ANALYSIS 1

Financial Data Analysis

Debbie Fernando

HCS/577

March 25, 2013

Sharon Sanders

FINANCIAL DATA ANALYSIS 2

Financial Data AnalysisThis paper will cover an analysis of the financial statements of Patton-Fuller Hospital for

the years of 2008 and 2009. The analysis is bases on the Balance Sheets and the Statements of

Revenue and Expenses for the above years along with the written annual report.

There were significant differences between the two years. According to the 2009 annual

report, a patient that has passed away in 2008 had left the hospital $1,000,000 in her will. This

was a huge help to the hospital as in took some hits in the year as well. The return on

investments was negatively affected by the drop in the stock market and real estate. On top of

this, the cost of supplies was massively underestimated by $1,000,000. They finally settled some

disputes with some managed care companies which resulted in a 9% increase in net patient

income over the previous years. This settlement did allow for slower payments, however, so the

Patient Accounts Receivable has risen. This should show up as a gain in 2010 when the

payments start to catch up with the 2009 charges. There was almost a $20,000 difference in

Patient Accounts Receivable with 2009 being the highest.

The drop in the stock market also caused the equipment vendors to drop their prices so

they were able to obtain some much needed new equipment at a discounted price. They had to

use cash and release some of their restricted assets, but the purchases were a good deal on

necessities.

Because of the rise in Accounts Receivable and the huge underestimate of needed

supplies, a business management committee was formed to oversee the efficiencies of the

business office.

They were able to keep the expenses down by showing only a 3% increase over the

previous year. The 9% increase in receivables and the 3% increase in expenses still prove a gain

FINANCIAL DATA ANALYSIS 3

of 6% profit. The CEO and the CFO received their bonuses, and the physicians were paid very

well for the hard work of all of the staff at their physician owned Patton – Fuller Hospital.

Balance Sheet

On the balance sheet, it shows around $20,000 less in cash in 2009 than in 2008.

However, due to the availability of the new equipment at a low price, cash was spent on this;

thus there is approximately $40,000 more in total assets in 2009 than 2008. Since the hospital

took out a long term loan, according to the annual report, which is showing up in the liabilities,

both as a portion of the long-term debt and the entire long-term debt. This loan makes the

liabilities in 2009 close to $250,000 more than in 2008. However, the loan was necessary due to

the stock market and other economic developments. There is a concern with the loan having an

adjustable interest rate rather than a fixed rate. The interest rate on the loan could have a positive

or negative affect on the balance sheet for 2010 and beyond.

Statement of Revenue and Expense

The Statement of Revenue and Expense shows that Net Patient Revenue was up in 2009

over $40,000 from 2008. There was only a $6,000 increase in salaries and benefits and a

depreciation of over $10,000 from 2008 to 2009. The total expense was increased just around

$25,000 more in 2009 from 2008.

Conclusion

The balance sheet and the statement of revenue and expense are both very beneficial and

necessary is the health care industry. Both statements show how much money is coming in and

where it is coming from. They both also show how much is being spent and what is being

purchased. In this case, it shows that the supplies’ being hugely underestimated was a major

concern. It could have been a disaster had it not been for the passing of one of their patients and

FINANCIAL DATA ANALYSIS 4

her leaving the hospital $1,000,000 in her will. The statements along with the annual report give

a very accurate account of the financial status of the hospital which appears to be in good

standing. The interest rate of the long-term loan, as will health care reform both have a major

effect on the finances of this hospital in the years to follow.

FINANCIAL DATA ANALYSIS 5

Reference

Patton-Fuller community hospital. (2013). Retrieved from

https://ecampus.phoenix.edu/secure/aapd/cist/vop/Healthcare/PFCH/docs/

2009PFCHAnnualReport.pdf

Content

60 Percent

Points Available

9

Points Earned

X/9

Additional

Comments:

Included a Balance Sheet in Microsoft® Excel® with 2008 financial data, 2009 financial data, amount of change in dollars, and percent change

Included a Statement of Revenue and Expenses in Microsoft® Excel® with 2008 financial data, 2009 financial data, amount of change in dollars, and percent change

Identified changes greater than 5% between the years

Explained significant changes based on information from the annual report

9

 You included the balance sheet and Statement of Revenues with your analysis. Your calculations were correct. I can see that you did do a thorough job of examining changes from year to year and analyzing this. You did a great job of explaining upcoming changes necessary based upon the annual report.

Organization/Development

20 Percent

Points Available

3

Points Earned

X/3

Additional Comments:

The analysis is 700 to 1,050 words in length. The introduction provides sufficient background

on the topic and previews major points. The conclusion is logical, flows, and reviews the

major points.

3

Mechanics

20 Percent

Points Available

3

Points Earned

X/3

Additional Comments:

FINANCIAL DATA ANALYSIS 6

The analysis—including the title page, reference page, tables, and any appendixes—is consistent with APA guidelines as directed by the facilitator. The analysis is laid out with effective use of headings, font styles, and white space.

Rules of grammar, usage, and punctuation are followed; spelling is correct.

3

 You had no major spelling or grammar errors.

Total Available

Total Earned

15 15