Jiranna Healthcare Balance Sheet December 31, 2020 ✓ Solved

Balance Sheetjiranna Healthcare Balance Sheet December 31 201

Prepare a comprehensive analysis of the Jiranna Healthcare financial statements for the year ended December 31, 2013. Include a discussion on the balance sheet, income statement, and cash flow statement, noting key figures and ratios that provide insight into the organization’s financial health. Elaborate on the implications of these results for stakeholders.

Paper For Above Instructions

In today’s competitive healthcare landscape, understanding financial performance is essential for the sustainability and growth of healthcare organizations. This paper provides a comprehensive analysis of Jiranna Healthcare's financial statements for the year ended December 31, 2013, focusing on the balance sheet, income statement, and cash flow statement. The analysis will highlight key financial figures and ratios that reflect the organization’s financial health and implications for stakeholders.

Balance Sheet Analysis

The balance sheet of Jiranna Healthcare, formatted in thousands, exhibits total assets amounting to $8,476,000. Current assets include cash, receivables, inventory, and prepaid expenses totaling $1,187,000. Notably, cash comprises a significant portion, with a balance of $1,400,000, emphasizing a solid liquidity position for the organization. Long-term investments standing at $510,000, alongside property, plant, and equipment valued at $6,500,000, indicate an investment in infrastructure essential for operations.

On the liabilities side, Jiranna Healthcare shows total liabilities of $3,434,000, which consist of current liabilities such as accounts payable and accrued expenses amounting to approximately $2,750,000, and long-term liabilities. The net assets are broken down into unrestricted ($3,113,000), temporarily restricted, and permanently restricted funds, culminating in total net assets of $4,413,000. This distribution signifies prudent asset management and financial stability, benefiting stakeholders such as investors and creditors who seek assurance of organizational viability.

Income Statement Analysis

Examining Jiranna Healthcare's income statement, gross patient services revenues reach $8,050,000. The deductions from revenues amounted to $600,000, leading to net patient service revenues of $8,450,000. Other operating revenues contribute to the overall operating revenues of $8,430,000. Operating expenses total $8,631,000, indicating that operational efficiency is a concern since expenses have surpassed revenues, ultimately resulting in an operating income of $-201,000. This situation suggests the organization is currently facing challenges in its operational profitability and reflects potential areas for improvement.

Furthermore, the excess of revenue over expenses is reported at $1,089,000, which indicates a positive change in unrestricted net assets. However, the losses from operating income necessitate strategic planning to improve expenses management without compromising service quality, thereby safeguarding stakeholder interests.

Cash Flow Statement Analysis

Cash flow analysis is critical for understanding Jiranna Healthcare's liquidity. The cash flows from operating activities reveal an inflow of $10,671,000 from patient and third-party payers, indicating robust revenue generation capabilities. However, the cash payments to employees and suppliers total $10,400,000, leading to a net cash flow from operating activities of $1,341,000, which reflects positive operating cash generation.

The cash flows from investing activities show outflows indicating investments are being made in plant assets ($1,200,000) and long-term investments ($670,000), reflecting commitment to capital growth. Despite cash outflows from these ventures, the organization still shows a slight overall increase in cash by $111,000. This aspect is crucial for stakeholders as it highlights the management's efforts to balance investments with operational cash generation.

Key Financial Ratios

To better understand Jiranna Healthcare’s financial standing, key ratios can be calculated from the financials. The current ratio, calculated by dividing current assets by current liabilities, stands at approximately 0.43. A ratio below 1 indicates potential liquidity concerns, emphasizing the need for Jiranna Healthcare to reassess its current asset utilization strategies.

Additionally, the debt-to-equity ratio showcases how much debt the organization carries relative to its equity. With total liabilities of $3,434,000 and net assets of $4,413,000, the ratio can be computed as 0.78. This moderate level of leverage can be beneficial as it allows for growth via debt while managing risks associated with high levels of borrowing.

Implications for Stakeholders

The analysis of Jiranna Healthcare’s financial statements reveals several implications for stakeholders. Investors may express concerns regarding the operational efficiency due to a loss reported from operating income despite positive net patient revenues. Strategies to cut down unnecessary expenses or improve revenue cycle management may be necessary to enhance profitability.

Creditors may also view the liquidity challenges in the context of the current ratio, indicating that close monitoring of cash management strategies is essential to avoid future cash shortages. Moreover, managers and executives within Jiranna Healthcare should focus on enhancing financial performance through operational efficiency while maintaining high-quality patient services to secure stakeholder trust and foster organizational sustainability.

Conclusion

In summary, the financial statements of Jiranna Healthcare for the year ended December 31, 2013, reflect a complex financial position. While certain indicators like cash flow from operations and total net assets offer reassurance, challenges such as operational losses demand immediate attention. The continual evaluation and tightening of financial strategies will not only benefit the organization but also its stakeholders, ensuring a balanced approach to growth and sustainability.

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