Page Balance Sheet Patton Fuller Community Hospital

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Analyze the financial statements of Patton-Fuller Community Hospital, including the balance sheet as of December 2008 and 2009, and the statement of revenue and expense for the same years. Discuss the changes observed across the two years, explaining the reasons behind these changes based on information provided in the annual report. Focus on key assets, liabilities, equity, revenue, and expenses, providing insight into the hospital’s financial health and performance.

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The financial health of healthcare institutions, particularly not-for-profit hospitals, is vital for understanding their capacity to deliver quality care and maintain operational efficiency. Patton-Fuller Community Hospital’s financial statements for 2008 and 2009 provide a comprehensive picture of its economic stability and operational performance. This analysis aims to interpret the balance sheet and income statement data for these years, elucidate the observed changes, and clarify the underlying reasons for these variations based on the hospital’s annual report.

Beginning with the balance sheet, the key assets of the hospital include current assets such as cash and cash equivalents, patient accounts receivable, inventories, prepaid expenses, and other assets like funded depreciation and property, plant, and equipment. In 2008, the hospital’s total assets reflected its operational scale and investment in infrastructure, while 2009 data showed variations attributable to changes in cash reserves, receivables, or investments in physical assets. For instance, fluctuations in cash and receivables can be linked to revenue collection efficiency, hospital activity levels, or strategic cash management practices.

On the liabilities side, current liabilities encompass accounts payable, accrued expenses, bond interest payable, and the short-term portion of long-term debt. The long-term liabilities primarily include bonds payable and other long-term debt obligations. Changes from 2008 to 2009 in these liabilities often reflect refinancing activities, debt repayment schedules, or increases in operational expenses. A decrease in current liabilities could indicate improved cash flow management, while increases in long-term debt may be associated with capital expansion projects or debt refinancing efforts to capitalize on favorable interest rates.

Equity, represented by common stock and retained earnings, symbolizes the hospital’s accumulated reserves and financial stability. Variations in retained earnings between the two years indicate the hospital’s profitability and reinvestment strategies. An increase in retained earnings suggests profitability, supporting future investments or debt servicing, whereas a decline may highlight operational losses or dividend distributions.

Turning to the statement of revenue and expense, the hospital’s total revenue derives primarily from net patient services, supplemented by other revenue sources such as grants or investments. The primary driver of revenue changes between 2008 and 2009 often relates to fluctuations in patient volume, reimbursement rates, or payer mix. For example, an increase in net patient revenue could result from higher patient admissions, new service lines, or changes in government reimbursement policies.

Expenses consist of salaries and benefits, supplies, physician and professional fees, utilities, depreciation, interest, and allowances for doubtful accounts. Variations in expenses between the years are driven by staffing levels, supply costs, depreciation related to capital investments, and interest on debt. A rise in salaries and benefits may reflect increased staffing or wage adjustments, while higher supplies costs could relate to expanded service offerings or inflationary pressures.

Analyzing the hospital’s income statement, the operating income reflects the hospital's core profitability from patient services. An increase in operating income from 2008 to 2009 signifies enhanced efficiency or higher revenue generation. Investment income and net income provide additional insights into the hospital’s overall financial performance, including non-operational gains or losses.

In conclusion, the financial statements of Patton-Fuller Community Hospital from 2008 and 2009 reveal the institution’s financial trajectory amid operational, market, and strategic changes. Increases in revenue and assets, alongside prudent debt management and expense control, demonstrate a hospital responsive to the evolving healthcare environment. Understanding these financial dynamics enables stakeholders to assess the hospital’s sustainability, capacity for future growth, and commitment to delivering quality healthcare services.

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