Question

What is the key difference between financial statement analysis and operating indicator analysis? How are these types of analyses useful to healthcare managers and investors? Consider a healthcare organization with which you are familiar and discuss what are some of the problems or challenges inherent in financial statement analysis?

Answer 1

Financial statement analysis

          * It is a method of analysing and reviewing financial statements of a company to develop good

            economic decisions.

Operating indicator analysis

         * It is a method of measuring progress towards organizational objectives that have been defined

            and agreed upon by management.

Use of this types of analysis in the case of health care managers and investors.

         Financial statement analysis

                * It allows the managers to comparing statements in multiple periods and analyse efficiency

                  level of the company.

                * It helps to give informations about results of different activities conducted over a period of

                   time.

              * It help the managers to take decisions about requirement of resources for proper functioning

                of the company.

              * Based on analysis report investors can make decision regarding amount of money need to

                 be invested for particular company.

              * Manager can predict future perfomance of company with the help of analysis report.

        Operating indicator analysis

              * It helps managers to evaluvate company meet required goals and criterias during a

                period of time.

              * Investors can check key perfomance of the company with the help of operating analysis

                 indicators and plan for their future investment.

              * It promote managers to improve efficiency level of the company or institution.

Examples

         * One of the health care organization where i went for nursing practical exam during my

           course period face a issue regarding lack of investors due to high debit loads and low

           capital income ( Number of patient seeking care in this hospital is very less) shows during

           analysing financial statements over a period of time.

       * Our hospital face economic issues due to high cost of modern health care equipments

           especially screening equipments and high wages of surgeons it directly influence the

           financial statement of the institution.