Financial statements
provide an important insight into the operation of a healthcare organization.
In this assignment, you will analyze the financial statements of a healthcare
organization.
First read the following
article, which describes how 15 measures provide an effective evaluation of the
financial performance of a healthcare organization. You will use a subset of
these measures, the financial strength index (FSI), in this assignment.
Cleverley, W. O., & Cleverley, J. O. (2005,
July). Scorecards and dashboards: Using financial metrics to improve
performance.Healthcare Financial Management, 59(7), 64–69. (AN
2009076343).
Select a nonprofit
healthcare organization of interest to you. Provide an overview of the
organization selected, including name and location.
Find financial data for
this organization using Guidestar (http://www.guidestar.org). (The
site requires free registration). All nonprofit organizations in the country
are required to file Form 990 with the Internal Revenue Service (IRS). Form 990
is public information, and the Web site Guidestar is a convenient way to access
990s. Form 990 provides a great deal of organizational financial information,
including income statements and balance sheets.
- On the Guidestar site, search
for the selected nonprofit healthcare organization. When you find it, look
for the statement: "A Form 990 is available for this
organization." Locate the legal entity that is the operating
organization of the facility. Some healthcare organizations have multiple
legal entities, including a foundation. Select the entity that includes
the patient services function.
- Open the most current 990 for
the organization. It is a PDF file, and likely to be 50 to 100 pages in
length. Don't worry; you will only use the first three pages. Income
statement information is shown on pages 1 and 2. Balance Sheet information
is shown on page 3. (You may want to review more of the 990. For example,
it might include the salaries of the highest paid administrators in the
organization.)
Your tasks:
- Complete the component parts of
the FSI using the formulas in the article. Use the "end of year"
figures from the balance sheet. Be sure to show the calculations.
- Total margin
- Day's cash on hand, with debt
financing percentage
- Accumulated depreciation
percentage
- Complete the FSI using the
formula in the article. Show the calculations.
- Analyze the organization by
comparing the FSI, and the four components of the FSI, to the indicators
in the article. This will show where your selected facility falls in the
range of quartiles shown in the article. Perhaps one or two of the ratios
are low, and others are high. How does this impact the composite
indicator, the FSI? Highlight the strengths and weaknesses of the
organization based on this brief review.
Present the calculations
and your interpretation in a 4-page report. Format the report in APA style.
Name your document as:
LastnameFirstInitial_W1_A4.doc.
For example, if your name is John Smith, your report will be named SmithJ_W1_A4.doc.
For example, if your name is John Smith, your report will be named SmithJ_W1_A4.doc.
By Saturday,
October 12, 2013, submit the report to the W1: Assignment 4 Dropbox.
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Grading Criteria
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Maximum Points
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Summarized information
about a selected nonprofit healthcare organization.
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4
|
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Calculated components
of FSI and the FSI.
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8
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Evaluated strengths
and weaknesses of the organization using indicators for components of FSI and
the FSI.
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12
|
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Applied APA standards
for writing style, spelling, and grammar.
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4
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Total
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28
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