Financial Statement Analysis of Audited Income Statements of the healthcare organization of your choice, I have chosen valley Medical Center. I have selected audited income statements from year 2016-2018 so that I can have a better comparison in performance each year. For this assignment we further need to do the following things:
• Financial statement analysis
• Operating indicator analysis
• You need to select relevant benchmarks such as Moody’s, S & P or Fitch and provide justification for why the benchmarks were selected
• Determine key financial and operational performance KPIs
• Create dashboards
• Identify ways to improve financial & operational performance
• A 12-15 minutes power point presentation with the target audience either a governing board or senior leadership team.
• A one-page briefing paper for your boss, who assigned the project to you. The point isn’t to cram the page but to summarize what you learned and your conclusions.
• The final summary is a 1 minute “elevator” speech to brief your boss walking to a meeting where this subject will be discussed. I am attaching few files: one is assignment prompt same as above, 3 audited income statements of a hospital, 2 power point presentation samples for reference.
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PowerPoint Presentation Tasks Improve efficiency of board meetings Financial statement analysis Operating indicator analysis Determine key financial and operational performance KPIs Create dashboards Identify ways to improve financial & operational performance Return on Equity Days in patients accounts receivable Fixed asset turnover Debt to equity ratio Deductible Ratio 2 Problematic Metrics Days in patient accounts receivable Deductible ratio 3 Expense per OP visit Contractual Allowance % Labor Hours per visit FTEs per occupied IP bed Average daily census 4 ROE Recommendations & Sensitivity Analysis Rec. 1: Renegotiate payor contracts Contractual Allowance Percentage Decrease “Contractual Allowance Percentage” by 1%: $75,160 Increase in Net Income 0.24 p.p. Increase in ROE >300% increase since 2011 Rec. 2: Launch marketing campaign Increase “Avg. Daily Census” by 1 patient: $29,057 Increase in Net Income 0.1 p.p. Increase in ROE Avg. Daily Census Inpatient FTEs / Occupied Bed 11 fewer pts. / day than 2011 (missed profit of $319,630) Rec. 3: Decrease O/P workforce Net Revenue / Visit Expense / Visit Profit / Visit Labor Hours / Visit Decrease O/P “Salaries & Wage Expense” by 1%: $36,937 Increase in Net Income 0.12 p.p. Increase in ROE Rec. 4: Sell/repurpose unused assets Fixed asset turnover Every 1% of “Net PPE” sold: $425,430 Increase in cash 0.012 Increase in Fixed Asset Turnover Ratio 1.34 p.p. Increase in ROE* *Does not account for maintenance expense savings Avg. age of plant Increased by only 1 year from 2011-2013 (Gross PPE increased by $12M; financed with debt) Other Considerations Forge partnerships with other3 hospitals Last resort, sell off to for-profit to leverage economies of scale Employee benefits have shot up – perhaps see what the root cause of this is. If insurance, renegotiate contract?