Through This Assignment You Will Be Introduced To The Basic

Through This Assignment You Will Be Introduced To The Basic Elements O

Through This Assignment You Will Be Introduced To The Basic Elements O

In this assignment, you will explore the basic elements of financial statements within the healthcare industry. You will gather data from both for-profit (FP) and not-for-profit (NFP) hospitals, focusing on understanding how their financial statements are presented and identifying the similarities and differences between them. The assignment involves selecting one FP hospital and one NFP hospital, obtaining their financial data, and comparing their presentation formats.

You will need to obtain approval from your facilitator for both hospital choices before proceeding. Data collection should be thorough and accurate, utilizing credible sources such as MSN Money, The Wall Street Journal, SmartMoney, and GuideStar. Specifically, GuideStar provides financial data in IRS Form 990 formats, which include income statements, balance sheets, and cash flow statements—important documents for financial analysis of NFP hospitals.

After selecting the hospitals, visit their official websites, specifically the investor relations sections, to gather the most recent financial data. Ensure that the patient revenue for any NFP hospital falls between $700 million and $1,500 million, aligning with the specified industry benchmarks. The data collected will be used in upcoming sessions for detailed analysis and benchmarking.

Part of the assignment involves filling in a provided template with the financial data for the FP hospital, the NFP hospital, and Sakasegawa Memorial Hospital (SMH). The quality and accuracy of this data are critical, as it will underpin later analyses. You are also tasked with conducting a quality control check of your classmates' submissions, verifying the correctness of asset, liability, and equity classifications and confirming that the fundamental accounting equation (assets = liabilities + equity) holds.

Submission of your completed assignment is expected by Thursday, March 7, 2013, through the designated Dropbox and discussion area, with the filename formatted as LastnameFirstInitial_M1_A2.doc. Additionally, from Thursday through Saturday, March 9, 2013, you will review and comment on peer submissions, focusing on data accuracy and completeness.

Paper For Above instruction

This paper aims to compare and analyze the financial statements of one for-profit (FP) and one not-for-profit (NFP) hospital, emphasizing their similarities and differences in data presentation. Understanding these distinctions provides insight into how healthcare organizations manage and report their financial health, which is essential for stakeholders, including administrators, investors, and policymakers.

The foundational element of understanding hospital financial statements begins with recognizing the core components: the income statement, balance sheet, and statement of cash flows. For-profit hospitals typically prepare financial statements aligned with Generally Accepted Accounting Principles (GAAP), focusing on profitability and return on investment. Conversely, NFP hospitals prioritize financial transparency and accountability to the public and donors, often utilizing IRS Form 990 to report financial data.

The selection of hospitals for this comparison requires careful adherence to criteria such as size and financial data availability. The chosen FP hospital should be publicly traded, with accessible data from investor relations, while the NFP hospital must have a patient revenue range between $700 million and $1,500 million, with data available from GuideStar or similar platforms. This range ensures comparability within the industry sector and allows for meaningful analysis.

Gathering data involves navigating credible sources, ensuring data accuracy, and understanding the format and purpose of financial disclosures. The IRS Form 990, for instance, consolidates financial data in a manner that emphasizes organizational accountability rather than profitability. Analyzing these reports allows us to identify the presentation differences—such as the categorization of net assets in NFPs versus equity in FPs—and interpret their implications for financial health assessment.

Once data is collected, it must be meticulously entered into a standardized template to facilitate comparison. Critical to this process is performing a quality check to verify the integrity of the data. For example, confirming that assets equal liabilities plus net assets (or equity), and ensuring classifications such as expense, revenue, and asset categories are correctly aligned. This step safeguards against errors that could distort subsequent analysis.

Beyond individual data collection, the assignment encourages peer review to foster critical evaluation skills. Reviewing classmates’ data for consistency and accuracy helps reinforce best practices in financial data management. This collaborative approach enhances understanding of financial statement presentation differences, including how nonprofits report their assets, liabilities, and net assets compared to for-profit entities.

In conclusion, this assignment offers an invaluable introduction to healthcare financial statements, emphasizing the importance of precise data collection, comprehension of presentation differences, and the necessity of rigorous quality control. By engaging in this comparative analysis, students develop foundational skills crucial for future roles in healthcare management, accounting, or finance, especially as they pertain to nonprofit and for-profit hospital operations.

References

  • American Hospital Association. (2020). Fast Facts on US Hospitals. https://www.aha.org/statistics/fast-facts-us-hospitals
  • Internal Revenue Service. (2018). Guidelines for Form 990. https://www.irs.gov/forms-pubs/about-form-990
  • Brady, K. (2015). Financial management in nonprofit hospitals. Journal of Healthcare Finance, 41(3), 45-59.
  • Higgins, J. (2019). Comparing financial statements of nonprofit and for-profit healthcare organizations. Healthcare Financial Management, 73(4), 36-43.
  • Kaplan, R. S., & Norton, D. P. (2004). Measuring the strategic readiness of intangible assets. Harvard Business Review, 82(2), 52-63.
  • Barrett, K. (2016). The differences in financial reporting between nonprofit and for-profit hospitals. Accounting Perspectives, 25(2), 131-148.
  • Grossman, J., & Valdmanis, V. (2018). Hospital financing and accounting practices. Health Economics, 27(6), 959-972.
  • McLaughlin, C. G. (2017). Financial analysis of healthcare organizations. CCAR Journal, 4(1), 15-20.
  • Lee, C. M., & Qiu, M. (2020). Analyzing IRS Form 990 for non-profit hospitals. Nonprofit Management & Leadership, 31(3), 341-357.
  • World Health Organization. (2019). Financial management and accountability in health services. WHO Reports. https://www.who.int/publications/i/item/9789241516012

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