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explain financial statement analyze and its application in healthcare Finance 150 words minimum

explain financial statement analyze and its application in healthcare Finance 150 words minimum

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The financial statement analysis involves the analysis of three main statements which are:

  1. The Income Statement
  2. The Balance Sheet
  3. Cash flow Statement

With regards to the healthcare finance the income statement can be analysed to arrive at the revenue generated from healthcare services, the average revenue generated per patient, the average cost of healthcare per patient. The operational expenses and the net profit available for the healthcare provider can be analysed by the income statement

The balance sheet can provide details like the current assets which can involve the cash on hand, the equipments and instruments that are required to be acquired for the healthcare industry. We can also do an analysis on the capital expenses year on year. The liability side of the balance sheet sill show the amount payable to the healthcare service providers and the debt the healthcare organization has if any.

The cash flow statement will show the average cash flow (inflow and outflow) per patient. By studying the cash flow statement, the business can see as to where the costs can be reduced and revenues increased for improve the overall profitability of the healthcare industry.

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