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Financial Data Analysis Essay

Financial Data Analysis

Since 1975, Patton Fuller Community Hospital (PFCH) has been serving the people of the Kelsey and the surrounding communities. PFCH is a for-profit organization and is owned by physician active within the facility. Owned by the physicians active at the hospital, the organization is governed by a 14 member board of directors, which consist of 12 physician-owners, with the Chief Executive Officer (CEO) and the Chief Financial Officer (CFO) as non-voting members. The facility is dedicated to providing cutting-edge medical services. PFCH commitment to quality patient care has allowed the facility to grow to where it is today. As a 600-bed, full-service hospital, Patton Fuller Community Hospital is the premier healthcare facility in the Northwest Valley.

According to the CFO of PFCH, the hospital derives 80% of its revenue from inpatient activity and 20% of its revenue is from the emergency department and other outpatient services. However in 2008, PFCH mourned the passing of Abigail Baderman, who was a long-time benefactor of the hospital. In December 2009, pursuant to the probate of her will, the hospital received a bequest from her estate, recognized as an unrestricted donation. In addition, PFCH investment income took a hit because the declines in the stock market and real estate markets. This caused PFCH to reassess the value of its investments and, on their auditors’ advice, to write down those assets.

Even though PFCH had some minor setbacks in 2008 and 2009, the organization is now heading in the right direction. According to PFCH CEO, the organization had a successful year. The organization net patient revenues have grown by over 9%, yet most expenses have been kept to an increase of just 3%. An analysis of the unaudited financial statements (below) shows that all financial ratios have improved, and the hospital is poised to continue its profitable trend.

Cash & Cash Equivalents – PFCH cash and cash equivalents from 2008 to 2009 changed significantly. The organization cash and cash equivalents decline almost by half from 2008 to 2009, which would have made it hard for the organization to covert assets into cash. Asset of Limited use – PFCH asset of limited use from 2008 to 2009 changed significantly as well. The organization asset of limited use declined by a third from 2008 to 2009. Patient Accounts Receivable – PFCH patient accounts receivable from 2008 to 2009 changed significantly as well. The organization patient accounts receivable incline more than half from 2008 to 2009.

This increase shows that more than half of patient’s accounts have no remaining balances. Inventories – PFCH inventories from 2008 to 2009 changed significantly as well. The organization inventories incline more than 100%. This shows that the organization has merchandise that has not been sold. Too much inventory can put the organization at risk because if they cannot get rid of the merchandise, the organization can lose money. Total Current Assets – PFCH total current assets from 2008 to 2009 had a minimal change. This shows that the organization total current assets are inkling and are stable.

Other Assets

Funded Depreciation – PFCH funded depreciation from 2008 to 2009 changed significantly as well. The organization funded depreciation has increased by 18%, which means the organization has money set aside renew machinery and equipment that it uses in operating activities. Held under bond indenture – PFCH held under bond indenture had a significant change from 2008 to 2009. The organization held under bond indenture had decline over the past year. Property, Plant and Equipment, net – PFCH property, plant and equipment, net from 2008 to 2009 changed significantly as well. The organization property, plant and equipment increase by 41%, which makes it harder for the organization to liquidate the assets. Total Assets – PFCH inventories from 2008 to 2009 changed significantly as well. The organization inventories incline more than 100%.

Liabilities and Equity

Current Portion of long-term debt – PFCH current portion of long-term debt from 2008 to 2009 changed significantly as well. The organization current portion of long-term debt has increase more than 100%, which can put the organization at a higher risk of default. Accounts Payable, accrued expenses – PFCH accounts payable, accrued expenses from 2008 to 2009 changed significantly as well. The organization current accounts payable, accrued expenses has increase more than 100%, which means the organization is paying their suppliers. Bond interest payable – PFCH bond interest payable from 2008 to 2009 has not changed. Total Current liabilities – PFCH total current liabilities from 2008 to 2009 changed significantly as well. The organization total current liabilities increased more than 100%, which mean they are able to convert some current assets to cash.

Other Liabilities

Long-term debt – PFCH long-term debt from 2008 to 2009 changed significantly as well. The organization long-term debt has increased more than 100%, which means the organization have a lot of long term loans. Less: Current portion of long term debt – PFCH Less: Current portion of long term debt from 2008 to 2009 changed significantly as well. The organization Less: Current portion of long term debt increased more than 100%, which means the organization have a lot of long term loans. Net long-term debt – PFCH net long-term debt from 2008 to 2009 changed significantly as well. The organization net long-term debt increased more than 100%, which means the organization debt last longer than a year. Total Liabilities – PFCH total liabilities from 2008 to 2009 changed significantly as well. The organization total liabilities increased more than 100%, which means the organization has more debts that they are liable for.

Equity

Common Stock – PFCH common stock from 2008 to 2009 remained the same. Additional Paid Capital – PFCH additional paid capital from 2008 to 2009 remained the same. Retained Earnings – PFCH retained earnings from 2008 to 2009 changed significantly as well. The organization retained earnings decreased by more than half, which means the organization is not able to invest assets in other areas of the organization. Total Liabilities and Equity – PFCH total liabilities and equity from 2008 to 2009 had a slight increase, which means the organization have some assets that are valuable

Revenues

Net Patient Revenue – PFCH net patient revenue had a slight changed from 2008 to 2009, which means the organization brought in money from patient care. Total Revenue – PFCH total revenue had a slight changed from 2008 to 2009, which means the organization brought in some revenue.

Expenses

Salaries and Benefits – PFCH salaries and benefits had a slight changed from 2008 to 2009, which means the organization salaries and benefits cost about the same. Supplies – PFCH supplies had a slight changed from 2008 to 2009, which means the organization supplies cost about the same. Physician Fees – PFCH physician fees had a slight changed from 2008 to 2009, which means the organization physician fees cost about the same. Utilities – PFCH utilities had a slight changed from 2008 to 2009, which means the organization utilities cost about the same. Depreciation & Amortization – PFCH depreciation and amortization changed significantly as well.

The organization depreciation and amortization increased by almost half, which means the organization is able to pay off its debt over a period of time. Provision for doubtful accounts – PFCH provision for doubtful accounts had a slight changed from 2008 to 2009. Total Expenses – PFCH total expenses had a slight changed from 2008 to 2009, which means the organization total expenses cost about the same.

Income

Operating Income – PFCH operating income changed significantly as well. The organization operating income decreased by almost half, which means the organization, did not make a profit from business operations. Non-Operating Income – PFCH non-operating income changed significantly as well. The organization non-operating income decreased by almost half, which means the organization, is not able to derive from activities not related to its core operations. Net Income – PFCH net income changed significantly as well. The organization net income decreased by almost half, which means the organization, did not make a profit.


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