Basic Financial Statements
Basic Financial Statements
• Balance Sheet (Position)
• Income Statement (Performance)
• Statement of Cash Flows
Other sources of Financial Information
Notes to the Financial Statements
Statement of Changes in Net Assets
Statement of Changes in Equity
Basic Financial Statements
• Balance Sheet
• Shows assets, liabilities and equity
(Assets = Liabilities + Equity)
• Statement of position - a snapshot in time
• Always as of a date, not for a period of time
Balance Sheet
Assets - items of value to which a company has a
legal claim
Liabilities - amounts owed by company
Equities - ownership’s net claim on the assets
Balance Sheet
Current Liabilities
Current Assets
Long-Term Debt
Long-Term Assets
Equity
Current Assets
• Will be consumed within 12 months
• Listed in order of liquidity:
• Cash
• Short-term investments
• Accounts receivable
• Inventories
• Prepaid expenses
Current Assets
• Cash
• checks and money on deposit
• credit card receipts
• Short-term investments
• marketable securities
• certificates of deposit
• other investment instruments
Current Assets
• Accounts receivable
• funds owed to the company
• government and insurance payors
• individual patients
• other
• Inventories
• Medical, surgical and office supplies
• Fuel, food
Current Assets
• Prepaid expenses
• prepaid insurance
• prepaid rent and supplies
• prepaid interest and property taxes
Fixed (Long-Term) Assets
• Useful life > 1 year
• Long-term assets include:
• Property, plant and equipment
• Natural resources
• Intangible assets
Property, Plant & Equipment
• Land improvements
• parking lots, sidewalks, landscaping
• Buildings
• Fixed equipment
• Boilers, HVAC
• Major equipment
• MRI, Linear Accelerators
Intangible Assets
• Items of value which lack physical
characteristics
• Goodwill
• Patents/Trademarks
• Franchises/Licenses
• Customer lists
• Computer software
Current Liabilities
• Payable within 12 months
• trade accounts payable (invoiced)
• salaries, wages, payroll taxes payable, accrued
vacation
• accrued liabilities (known, but not yet
invoiced)
• advances from third-party payers
• interest payable
Long-Term Liabilities
• Repaid over a period > 1 year
• bonds and notes payable
• bank loans
• pension liability
Equity
• Net assets of the company
• Owners’ claims on the company assets
• stock
• contributed (or paid in) capital
• accumulated profits/losses
• Restricted and Unrestricted
Statement of Operations
Operating Revenues
Operating Expenses
Net Operating Income
Basic Financial Statements
STATEMENT OF OPERATIONS:
• Revenues and Gains
• Expenses
• Other Income and Expenses
Basic Financial Statements
STATEMENT OF CHANGES IN NET ASSETS:
• Operating income
• Grants
• Contributions
• Net assets released from restrictions
• For operations
• For property and equipment
Basic Financial Statements
STATEMENT OF CASH FLOWS:
• Operating activity
• Investing activity
• Financing activity
Notes to Financial Statements
u Significant Accounting Policies
u Major Assets and Liabilities Detail
u Commitments and Contingencies
u Other Information
Notes to Financial Statements
SIGNIFICANT ACCOUNTING POLICIES:
• Organizational structure
• Charity Care
• Revenue Methodology
• Asset Valuations
Notes to Financial Statements
ASSET AND LIABILITIES DETAIL:
• Investments
• Property and Equipment
• Debt and Assets Held by Trustee
Notes to Financial Statements
COMMITMENTS AND CONTINGENCIES:
• Pension and Post-Retirement Benefits
• Malpractice
• Outstanding Litigation
• Credit Risk/Payor Mix
Notes to Financial Statements
OTHER INFORMATION:
• Related Party Transactions
• Credit Risk/Payor Mix
• Functional Expenses
• Healthcare services
• General and administrative