Healthcare Organizations Financial PPT.

Using the financial analysis document attached design a powerpoint presentation (at least 8 slides) that discusses the Healthcare systems

and Healthcare Accounting/ Finance concepts and their relationship to medical groups, hospitals, or clinics.

APA formatted, using 3-5 citation sources and include citations for images used. Use the notes section of the powerpoint to elaborate on topics presented.

Be sure to cover certain specific details relating to healthcare accounting.

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Running Head: FINANCIAL ANALYSIS OF HEALTHCARE ORGANIZATIONS Financial Analysis of Healthcare Organizations Larenzo M. Lott HCA 633: Healthcare Finance National University Dr. Tiffany Schweitzer August 29, 2019 1 FINANCIAL ANALYSIS OF HEALTHCARE ORGANIZATIONS 2 Abstract Scripps Healthcare, Palomar Healthcare, Sharp Health Care, and Tri-City Health Care are four major district hospitals that operate in San Diego, CA County. The four hospitals have both similarities and differences in terms of their operation, service provided, specialization, and market segment. Therefore, they can be said to be operating with an environment that faces similar economic factors that determine their performance and productivity. This paper will provide a financial statement analysis of the four district hospitals. The major financial statement that would be examined in this case are the statement of financial performance, the statement of financial position, the cash flow, and the balance sheet. The focus will be placed on the assets, liabilities, expenses, investments, revenues, and hops debts that the four hospitals have accrued over the past few years. Besides, this paper will evaluate the profitability, gearing, liquidity, and efficiency ratios to compare the financial health and performance of the four hospitals.

FINANCIAL ANALYSIS OF HEALTHCARE ORGANIZATIONS 3 Introduction Understanding the financial performance of a healthcare organization is a significant aspect of healthcare finance that enables organizations to effectively manage their organizations to achieve sustainability. Using financial ratios and a careful analysis of the balance sheet items, the management of healthcare organization can easily ascertain whether the healthcare reorganization is operating profitable of is suffering loses. The continuity and sustainability of a healthcare organization depend on its competitiveness and ability to genera profit to remain productive in the sector. Although Scripps Health, Palomar Health, Sharp Healthcare, and TriCity Healthcare both operate in a similar economic environment in Sn Diego, CA, they have a different rate of productivity, profitability, and general sustainability as illustrated using financial statements and ratio analysis presented in this paper. Balance Sheet Polar Health 2015 current assets increased to $355,385,000from $314,047,000 in 2014 and $299,103,000 in 2013. The hospital’s total assets were $1,581,164,000 in 2015, a decrease from $1,592,848,000 in 2014 and $1,642,093 in 2013. This is an indication that the company’s assets were decreasing during the three year trading period, indicating a company that is losing its financial stability. Surprising, the healthcare’s total; liabilities increased to $1,302,922 in 29015 from $1,269,637,000 in 2014 and $126,775, 000 in 2013. The increase in the liabilities of the organization occasioned by a decrease in its assets within these three years is an indication that the healthcare was losing its financial stability and gearing ratio. This is evidenced by the reduction in the net position of the healthcare from $1,642,093,000 in 2013 to $1,592,848,000 in 2014 and finally $1,581,164,000 in 29015. The continued decline in net total net position of FINANCIAL ANALYSIS OF HEALTHCARE ORGANIZATIONS 4 Palomar’s healthcare financial position illustrates an organization whose financial stability continued to decrease during the three years. Scripps Health had a total of $715,978,000 in current assets and $4,297,932,000 in total assets during the 2014 financial year. The healthcare organization had $380,418,000 in form of current liabilities and $1,339,785,000 in total liabilities during the same period. Ostensibly, Scripps Health had net assets amounting to $2,750,256 during the same period. Tri-city healthcare had a total of $256,698,000 in form of total assets in 2013 and decreased to $256,198,000 in 2014. During the same period, the organization had total liabilities amounting to $164,822 in 2013 and $161,574,000 in 2014. The total net position of Trinity Healthcare increased from $91,876,000 in 2013 to $94,624,000 in 2014. Sharp Healthcare current assets were $674,914,000 for 2014 financial year and $618,410 for 2013 financial year. This increase illustrates a financially stable healthcare organization. Over the two years.

The total assets were $1,050,912,000 for the year 2013 financial year and $1, 389, 130,000 for 2014 financial year. The organization’s total liabilities $1,206,336,000 for the financial year 2014 and $1,045,959,000. Statement of Financial Performance Palomar Healthcare operating revenue increased over the three year period rising form $695,241,000 in 2013 to $680,141,000 in 2014, and finally reaching $705,200,000 in 2015 besides the operating loss also decreased from $37,705,000 in 2013 to $27,450,000 in 20154, and finally $15,513,000 in 2015. However, the healthcare organizations’ net position decreased from $365,974,000 in 2013 to $312,462,000 in 2014, and finally falling to the lowest level of $267,091,000 in 2015. This decline in the company’s net position during the three years was FINANCIAL ANALYSIS OF HEALTHCARE ORGANIZATIONS 5 occasioned by the increase in no-operating expenses from $8,889,000 in 2013 to $26,062,000 in 2014, and finally reaching the highest mark of $29,858,000 in 2015. Scripps Health’s revenue for the financial year 2014 was $2,564,815 against a total operating income of $2,410,033,000 which translates into an operating income of $154,782,000 for the same period. Tri-City Healthcare’s revenue increased from $308,193,370 in 2013 to $319,742,913 in 2014.

The organization’s total operating loss was $325,397,690 in 2014, having increased from $322,547,602 in 2013. Consequently, the healthcare organization suffered a loss of $14,354,232 in 2013, although the loss decreased to $5,654,786 in 2014. The non-operating revenue of healthcare was $10,039,849 in 2014 has increased from $2,993,803 in 2013. The change in the net position of the company, therefore, was ($14,932,140) in 2013 and improved to $2,748,401 in 2014. By the end of the year, the organization had a net position of 91,875,597 in 2013 and increased to $94,623,998 in 2014. Sharp HealthCare revenue for the financial year 2014 was $2,928,573,000 and $ 2,829,803,000 for the financial year 2013. The organization’s expenses were $2,694,219,000 for the 2014 financial year and $2,604,364,000 for the 2013 financial year. The increase in the number of unrestricted net assets were $349,834,000 for the financial year 2014 and $367,547,000 for the financial year 2013. Cash Flow Statement Palomar’s cash flow from operating activities increased from 9,628,000 in 2013 to $40,086,000 in 2014 to $54,046,000 in 2015 the same trend was experienced in the noncapital financing activities which increased from $12,185,000 in 2013 to $15,763,000 in 2014 and finally $16,649,000 in 2015. However, the cash flow attributed to capital financing activities reduced from $96,391,000 in 2013 to $45,545,000 in 2014, and finally $27,488.000 in 2015. Healthcare Organizations Financial PPT.

FINANCIAL ANALYSIS OF HEALTHCARE ORGANIZATIONS 6 While the healthcare organization earned $87,008,000 from investing activities inn2013, the value reduced to $17,317,000 in 2014 and finally declined further to an expense of $44,893,000 in 2015. The end year cash and cash equivalent, however, increased from $19,348,000 in 2013 to $46,969,000 in 2014, and then dropped slightly to $45,283,000 in 2015. Tri-city healthcare’ cash flow from operating activities increased from $4,866,000 in 2013 to $11,894,000 in 2014. The cash flow form the noncapital financing activities also flowed the same trend and increased from $4,503,000 in 2013 to $12,498,000 in 2014. The healthcare’s cash flow spent on capital financing activities increased from $15,128,000 in 2013 to $27, 897,000 in 2014. The healthcare organization earned $4,186,000 from investing activities in 2014 but spent $1,114,000in investment activities inn2013. Conversely, Tri-City’s end-year cash and cash equivalent, however, increased from $13,248,000 in 2013 to $13,929,000 in 2014. Sharp Healthcare cash flow from operating activities increased in the net asset for the year 2014 was $354,238,000 and $369,980,000. The net cash from operating activities for $60,203,000 in the financial year 2014 and $115,321,000 for the financial year 2013.

The net cash used in investing activities for the financial year 2014 was $96,538,000 and $116,720,000 for the financial year 2013. For financing activities, Sharp Healthcare had $105,882,000 for the financial year 2014 and $2,606,000 for the financial year 2013. By the end of the year 2014, the cash and cash equivalent for the organization were $244,881,000 for the financial year 2014 and $175,334,000 for the financial year 2013. Credit Risk of Investment Healthcare Organizations Financial PPT.

A large portion of the healthcare’s organizations’ credit risk was attributed to HMO/PPO/Commercial which constituted 63% of the total credit in 205 and 47% in 2014 Medicare had 15% in 2015 and 18% in 2014 while Medical had 11% in 2015 and 2014patienst FINANCIAL ANALYSIS OF HEALTHCARE ORGANIZATIONS 7 credit risk constituted 20% in 2014 and 5% in 2015. Sharp Healthcare has a total of $50,000,000 credit facilities and bank liquidity of $60,000,000. Palomar’s long-term debt for the year 2015 was $1,151,735,000 of which $16,666,000 was due within one year. The 2014 total long-term debt was $1,135,151,000 of which $4,601, was due in one year. Tri-city Healthcare’s short-term debt was $57,375,225 in 2014, having decreased from $6,800,000 in 2013. The long term debts were $34,714,330 in 2014 out of which $4,106,095 was due within one year. The 2013 long-term debt was $97,063,336, out of which $3,527, 812 was due in one year.

Based on the ratio analysis of the four district healthcare organization, it is evident that the healthcare entities experienced a slight decline in profitability, efficiency, and gearing from 2013 to 2014 financial years. Palomar Healthcare’s debt ratio decreased from 0.34% in the 2013 financial year to 0.45% in the 2014 financial year. Sharp Healthcare’s debt ratio also took the same trend and decreased from 0.32% in the 2013 financial year to 0.36% in the 2014 financial year.

However, Scripps Healthcare’s debt ratio increased from 0.54% in the 2013 financial year to 0.59% in the 2014 financial year. The same was the case with Tri-City healthcare whose debt ratio increased from 0.52% in the 2013 financial year to 0.57% in the 2014 financial year. Palomar Healthcare’s debt to equity ratio decreased from 1.0 in the 2013 financial year to 0.9 in the 2014 financial year. Sharp Healthcare’s debt to equity ratio increased from 0.85 in the 2013 financial year to 0.96 in the 2014 financial year. Scripps Healthcare’s debt to equity ratio took the same trend and increase d from 0.78 in the 2013 financial year to 0.95 in the 2014 financial year. Healthcare Organizations Financial PPT.

However, Tri-City healthcare’s debt to equity ratio decreased from 0.96 in the 2013 financial year to 0.57 in the 2014 financial year. FINANCIAL ANALYSIS OF HEALTHCARE ORGANIZATIONS 8 Palomar Healthcare’s debt to asset ratio increased from 0.2478 in 2013 financial year to 0.3241 in the 2014 financial year. Sharp Healthcare’s debt to asset ratio took the same trend and decreased from 0.3859 in the 2013 financial year to 0.2468 in the 2014 financial year. Scripps Healthcare’s debt to asset ratio increased from 0.324 in 2013 financial year to 0.4269 in the 2014 financial year. On the other hand, Tri-City healthcare debt to total asset ratio decreased from 0.321 in 2013 financial year to 0.1598 in the 2014 financial year.

Palomar Healthcare’s current ratio increased from 1.5 in 2013 financial year to 1.98 in the 2014 financial year. On the other hand, Sharp Healthcare’s current ratio decreased from 1.95 in the 2013 financial year to 1.65 in the 2014 financial year. Scripps Healthcare’s current ratio, however, decreased from 1.78 in the 2013 financial year to 1.54 in the 2014 financial year. However, Tri-City healthcare current ratio increased from 1.28 in the 2013 financial year to 1.63 in the 2014 financial year. Palomar Healthcare’s time-interest earned ratio increased from 0.21 in the 2013 financial year to 0.22 in the 2014 financial year. Sharp Healthcare’s time interest earned ratio increased from 0.15 in the 2013 financial year to 0.17 in the 2014 financial year. Scripps Healthcare’s time-interest earned ratio decreased from 0.79 in the 2013 financial year to 0.69 in the 2014 financial year. On the contrary, Tri-City healthcare time-interest earned ratio increased from 0.25 in the 2013 financial year to 0.37 in the 2014 financial year. Healthcare Organizations Financial PPT.

Palomar Healthcare’s gross margin ratio increased from 0.21 in the 2013 financial year to 0.22 in the 2014 financial year. Sharp Healthcare’s gross margin ratio decreased from 0.56 in the 2013 financial year to 0.14 in the 2014 financial year. Scripps Healthcare’s gross margin ratio also decreased from 0.19 in the 2013 financial year to 0.21 in the 2014 financial year. However, Tri-City healthcare gross margin ratio increased from 0.21 in the 2013 financial year to 0.22 in the 2014 financial year. FINANCIAL ANALYSIS OF HEALTHCARE ORGANIZATIONS 9 Palomar Healthcare’s return on capital employed ratio increased from 0.19 in 2013 to 0.32 in 2014. Healthcare Organizations Financial PPT.

The same trend was witnessed in Sharp Healthcare’s return on capital employed ratio which increased from 0.14 in the 2013 financial year to 0.29 in the 2014 financial year. However, Scripps Healthcare’s return on capital employed ratio increased from 0.19 in the 2013 financial year to 0.21 in the 2014 financial year. Surprisingly, Tri-City healthcare gross margin ratio increased from 0.21 in the 2013 financial year to 0.34 in the 2014 financial year. Conclusion In conclusion, Scripps Healthcare, Palomar Healthcare, Sharp Health Care, and Tri-City Health Care are four major district hospitals that operate in San Diego, CA County. However, the ratio analysis of the financial statement of the four healthcare facilities reveals that they have different gearing, profitability, liquidity, and efficiency level. The ratio analysis also shows that the year 2013 experienced the less favorable financial performance, profitability, liquidity, and gearing ratios as compared to the 2014 financial year. This ratio analysis, therefore, means that the four healthcare organization have bene operating sustainably as evidenced by the favorable ratios indicated by their financial statements. However, the healthcare organization can be ranked in order of profitability and sustainability with Palomar Healthcare being the most profitable, followed by Sharp Health Care, Scripps Healthcare, and finally, Tri-City Health being the least profitable of the four healthcare facilities, though all of them are still profitable. FINANCIAL ANALYSIS OF HEALTHCARE ORGANIZATIONS 10 References Palomar Health (2015). Palomar Health Consolidated Financial Statements as of and for the years ended June 30th 2015 and 2014, and Independent Auditors Report. Scrips (2014).

Scripps Health Annual Report. Sharp Healthcare (2014). Combine Financial Statement and Supplementary Information for the years ended September 30th 2014 and 2014 with reports from independent auditors. Tri-City Healthcare (2014). Report of independent Auditors and Consolidated Financial Statements with Supplementary Schedule. Healthcare Organizations Financial PPT.

FINANCIAL ANALYSIS OF HEALTHCARE ORGANIZATIONS 11 Appendix Palomar 2013 Sharp 2014 2013