Saturday, December 7, 2019

Health Care Budget free essay sample

The increase in assets in the year 2009 was 7%, which is caused by an increase in accounts receivable by 56%, inventories by 100% and increase in property plant and equipment by 41%. The hospital may have provided more credit to customers or consumers to raise the revenues and more investment in fixed assets and inventories to enhance the revenues. The Patton-Fuller Hospital organization seems successful, but not completely. The organization lacks in certain areas, as they were only able to raise their revenues by 10%. The increase in fixed assets and current assets have been financed by debt financing, which is evident from an increase in accounts payable and accrued expenses by 120% and net long term debt has increased by 114% as compared to the previous year. The decrease in retained earnings by a heavily built amount of 63% shows that Patton-Fuller Hospital is relying more on debt financing, therefore the debt to total assets and debt to total assets ratios have been heavily disturbed in 2009 as compared to 2008. We will write a custom essay sample on Health Care Budget or any similar topic specifically for you Do Not WasteYour Time HIRE WRITER Only 13.90 / page In 2008 39% of total assets were financed from debt financing while in 2009, the assets rose to 79% showing a large increase of 102%. In 2008, the debt to equity ratio has also shown the same pattern, of a rather worse situation than debt to total assets. In 2008, the debt was 64% but rose to 368%, showing a drastic increase of 478%, which is main cause of net interest expense in 2009, which was net interest income 2008. Patton-Fuller Community Hospital’s 2010 operating budget assumptions supplies cost will decrease 3% due to the price deflation and their current over-stock purchased last year. Physician and professional fees and contracts for fees have a built-in 3% increase. Utilities cost will increase 5% due to the rising cost of oil partially offset by the efficiency of the hospitals new heating and cooling systems; no other net change is expected to occur in the cost or volume of these items. Depreciation and amortization â€Å"non-cash† expenses some high-cost equipment (air conditioning, telephone system, all patient beds and headwalls) were replaced in 2009 and â€Å"depreciation† rose sharply. Depreciation will remain at this level in 2010, so no projected increase is anticipated. Interest and the repayment plan for any monies borrowed in 2009 will come due in 2010, with a sharp increase (30%) in interest cost. Provision for doubtful accounts and the renegotiation of managed care plans has delayed collection and made collections less certain. Patton-Fuller Community Hospital will assume a 10% increase in doubtful accounts. Operating Income Non-operating Income (Loss), Patton-Fuller Community Hospital does not expect to have any non-operating income or loss. With investment income (loss), the market is down, expected to hold steady, so a zero return is anticipated, with neither losses nor gains. Patton-Fuller Community Hospital believes that the hospital will continue its dramatic turnaround, taking advantage of the stagnation in patient volume, price deflation, the efficiency of new equipment and the improved arrangements with the managed care companies. The net loss of the Patton-Fuller Hospital organization went down by 98% in 2009 as compared to the 2008 reports. This loss was caused ecause of an increase in revenues by 10%. All expenses had an increase of 3% to 5%, except for depreciation and bad debt expenses. These expenses have increased by 44% and 11% respectively, in 2009 as compared to 2008. The increase in depreciation expense is because of an increase in fixed assets in 2009 as compared to 2008. The increase in bad debt expense is due to increase in accounts receivable in 2009 as compared to 2008. The interest income also sh owed a decrease by 123%, and it may be due to more interest expenses in 2009 as compared to 2008. If the decrease would have been less in 2009 as compared to previous year of 2008, the net loss may have been converted into net income. The decrease in net income has affected the return on assets ratio and return equity ratio in both years; they are around 0% in 2009 and -3% in 2008 for both ratios. The ratio has been shifted from negative to almost 0%, due to an increase in revenues and net income. References Patton-Fuller Community Hospital 2010 Operating Budget Assumptions Patton-Fuller Community Hospital 2009 Operating Budget Projections

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