Financial Statement Analysis:
You have just taken the position of Assistant to the Vice President for Finance for a Medical Center, a 240-bed acute care hospital. The Vice President has asked you to study the organization's recent financial statements - Profit and Loss, Balance Sheet, Cash Flow (sheets are included in the files below) and provide your analysis of the organization’s strength and vulnerabilities. Considering the accounting and financial tools and skills used in technology healthcare, how would you go about this analysis?
Income Statement, Balance Sheet and Cash Flow Sheets below
Balance Sheet:
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Period Ending Dec 31, 2015 Dec 31, 2014 Dec 31, 2013
Assets:
Current Assets:
Cash & Cash Equivalents 10,923,000 7,495,000 7,276,000
Short Term Investments 1,988,000 1,741,000 1,937,000
Net Receivables 13,324,000 9,750,000 7,050,000
Inventory - - -
Other Current Assets - - -
Total Current Assets - - -
Long Term Investments 18,792,000 18,827,000 19,605,000
Property Plant and Equip. 4,861,000 4,418,000 4,010,000
Goodwill 44,453,000 32,940,000 31,604,000
Intangible Assets 8,391,000 3,669,000 3,844,000
Accumulated Amortization - - -
Other Assets 7,791,000 6,986,000 6,126,000
Deferred Long Term Asset Charges 860,000 556,000 430,000
Total Assets 111,383,000 86,382,000 81,882,000
Liabilities:
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Current Liabilities:
Accounts Payable 26,324,000 21,287,000 19,033,000
Short/Current Long Term Debt 6,634,000 1,399,000 1,969,000
Other Current Liabilities - - -
Total Current Liabilities - - -
Long Term Debt 32,094,000 17,406,000 16,860,000
Other Liabilities 11,775,000 9,810,000 9,269,000
Deferred Long Term Liability Charges 5,729,000 4,037,000 3,396,000
Minority Interest (105,000) - -
Negative Goodwill - - -
Total Liabilities 75,817,000 52,540,000 48,558,000
Stockholders' Equity:
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Misc Stocks Options Warrants 1,736,000 1,388,000 1,175,000
Redeemable Preferred Stock - - -
Preferred Stock - - -
Common Stock 10,000 10,000 10,000
Retained Earnings 37,125,000 33,836,000 33,047,000
Treasury Stock - - -
Capital Surplus 29,000 - -
Other Stockholder Equity (3,334,000) (1,392,000) (908,000)
Total Stockholder Equity 33,830,000 32,454,000 32,149,000
Net Tangible Assets (19,014,000) (4,155,000) (3,299,000)
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Cash Flow
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Period Ending Dec 31, 2015 Dec 31, 2014 Dec 31, 2013
Net Income 5,813,000 5,619,000 5,625,000
Operating Activities, Cash Flows Provided By or Used In:
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Depreciation 693,000 1,478,000 1,375,000
Adjustments To Net Income 98,000 51,000) 249,000
Changes In Accounts Receivables (591,000) (911,000) (317,000)
Changes In Liabilities 4,102,000 2,506,000 849,000
Changes In Inventories - - -
Changes/Operating Activities (1,430,000) (590,000) (838,000)
Total Cash Flow/Operating Activities 9,740,000 8,051,000 6,991,000
Investing Activities, Cash Flows Provided By or Used In:
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Capital Expenditures (1,556,000) (1,525,000) (1,307,000)
Investments (531,000) 799,000 (1,611,000)
Other Cash flows/Investing Activities (16,308,000) (1,808,000) (171,000)
Total Cash Flows/Investing Activities (18,395,000) (2,534,000) (3,089,000)
Financing Activities, Cash Flows Provided By or Used In:
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Dividends Paid (1,786,000) (1,362,000) (1,056,000)
Sale Purchase of Stock (916,000) (3,546,000) (4,046,000)
Net Borrowings 14,607,000 391,000 152,000
Other Cash Flows/Financing Activitie 334,000 (776,000) 4,000
Total Cash Flows/Financing Activities 12,239,000 (5,293,000) (4,946,000)
Effect of Exchange Rate Changes (156,000) (5,000) (86,000)
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Income Statement
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Period Ending Dec 31, 2015 Sep 30, 2015 Jun 30, 2015 Mar 31, 2015
Total Revenue 43,599,000 41,489,000 6,263,000 35,756,000
Cost of Revenue 26,542,000 25,618,000 26,026,000 25,689,000
Gross Profit 17,057,000 15,871,000 10,237,000 10,067,000
Operating Expenses:
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Research Development - - - -
Selling General/Administrativ - - - -
Non Recurring - - - -
Others 14,589,000 12,853,000 7,342,000 7,427,000
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Total Operating Expenses - - - -
Operating Income or Loss 2,468,000 3,018,000 2,895,000 2,640,000
Income from Continuing Operations:
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Total Other Income/Expenses Net - - - -
Earnings before Interest & Taxes 2,468,000 3,018,000 2,895,000 2,640,000
Interest Expense 260,000 229,000 151,000 150,000
Income before Tax 2,208,000 2,789,000 2,744,000 2,490,000
Income Tax Expense 956,000 1,171,000 1,159,000 1,077,000
Minority Interest (34,000) (21,000) - -
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Net Income from Continuing Ops 1,252,000 1,618,000 1,585,000 1,413,000
Non recurring Events:
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Discontinued Operations - - - -
Extraordinary Items - - - -
Effect Of Accounting Changes - - - -
Other Items - - - -
Net Income 1,218,000 1,597,000 1,585,000 1,413,000
the financial health of the organisation does not look good.
though the cash componen has increased in the last three years. good will of the organisation has increased over the years. which is intangible asset hence no gain in funds,
on the other hand the debt component has increased which includes long term debt and other liabilities.
the net income of the corganisation has declined frm march 2015 to Dec 2015.
but the positive point in the balance sheet is that the retained earnings are high hence the orgaisation has a strong base.and will survive the losses made.
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