Question

With attached healthcare-related balance sheet:

1. Write your impressions and or comments about the assets, liabilities, and net worth found on the balance sheet.

2. Would you have preferred more detail in this balance statement? If so, why?

Instructed to just use the 2 pages pictured
Metropolis Health stem's Financial S) Statements and 3-A ts from Notes Metropolis Health System Balance Sheet March 31, 20X3 and 20X2 Current Assets $1,150,000 825,000 8,700,000 (1,300,000) 150,000 900,000 200,000 Cash and cash equivalents $400,000 Assets whose use is limited 825,000 Patient accounts receivable less allowance for bad debts 8,950,000 (1,300,000) Other receivables 100,000 850,000 150,000 Inventories of supplies Prepaid expenses Toral Current Assets Asets Whose Use Is Limited 10,625,000 9,975,000 1,950,000 1,425,000 3,375,000 2,550,000 19,300,000 1,800,000 1,475,000 3,275,000 Corporate funded depreciation Under bond indenture agreements- held by trustee Total Assets Whose Use Is Limited Less Current Portion Net Assets Whose Use Is Limited (825,000) 2,450,000 (825,000) 19,200,000 Property, Plant, and Equipment, Net Other Assets 325,000 375,000 $32,000,000 $32,800,000 Total Assets 471

Answer 1

On the assets side under the head current assets: cash and cash equivalents were changed at a drastic rate. One can observe that the cash balance reached $1,150,000 from $400,000. Apart from cash and cash equivalents all other assets are did not change. But one this is clear that the receivables are taking almost 80% out of total current assets and out of that $1,300,000 were taken off due to bad debts. It is not good a company to have that much amount as receivables.

Coming to the liabilities side, we can observe that general fund got increased by $1,800,000. This might be transferred from profit of the company. And we can observe that almost all liabilities got reduced from 2012 to 2013.

Total current assets are $10,625,000 and total current liabilities are $5,825,000 in the year of 2013. It means that the company is having a good working capital which is necessary for running the business smoothly.

It will more better if the information includes profit and loss account and cash flow statement also. Because balance sheet will only indicate the position of the company on a particular date but p&l account will show the exact business position of the company. Cash flow statement will tell the movement of cash and can indicate the sources and applications of that cash.