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What health care business decisions are based on financial statements? Provide an example. 150 words

What health care business decisions are based on financial statements? Provide an example. 150 words

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A proper and thorough study of the financial statements helps in taking better business decisions. Irrespective of the industry all the businesses judge its performance on the basis of its financials. Generally decisions are made after having a thorough consideration of Balance Sheet, Income Statement and Cash flow statement.

Balance sheet helps in judging the solvency and liquidity of the company on the basis of assets and liabilities mentioned in it.

Income Statement helps in judging the performance of the company by analyzing its revenue and expenditure.

Cash flow statement helps in analyzing how much cash is being spent on operating , investing and financial activities.

These financial reports can help a business to decide whether it is ready for a major capital investment like of a health care business is thinking of expanding its business, financials can help in deciding

  • whether at present its a viable option or not,
  • can the business afford such a big expense at the moment
  • if not, how much external financing would be required
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