FINANCIAL HOSPITAL

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MRB 2012 FINANCIAL MANAGEMENT MASTERS OF BUSINESS ADMINISTRATION CASE STUDY ON COMMUNITY GENERAL HOSPITAL TABLE OF CONTENTS   1.0 BACKGROUND 3 2.0 FINANCIAL STATEMENT ANALYSIS 4 2.1 Balance Sheet 4 2.1.1 Assets 4 2.1.2 Liabilities 4 2.2 Income Statement 4 2.3 Cash Flow 5 2.4 Liquidity Measurement Ratios 5 2.4.1 Net Working Capital 5 2.4.2 Current Ratio 6 2.4.3 Quick (acid-test) Ratio 6 2.5 Activity Ratios 6 2.5.1 Average Collection Period 7 2.5.2 Average Payment Period 7 2.6 Debt Ratios 7 2.6.1 Debt to Equity Ratio 7 2.6.2 Debt to Asset Ratio 8 2.7 Profitability Ratios 8 2.7.1 Return on Sales (ROS) 8 2.7.2 Return on Asset (ROA) 9 2.7.3 Return…show more content…
BACKGROUND Community General Hospital was set-up on 1914 as Whittaker Memorial Hospital. It was a community-run hospital to serve the black population on Newport News Virginia. Throughout 1940 to 1960, Community General Hospital was a successful hospital, with the ‘black’ community as the largest patients. In this period of time, the hospital relied on funding from the community. Starting from 1970, Community General Hospital recorded losses and bad debts. Operationally, patients of the hospital declined due to existence of another better-equipped traditional white hospital. In the end of 1983, the hospital has accumulated $402,000 budget deficit. Some plans proposed for the hospital to revive such as issuance of $15 million bond and $1.5 million from community pledges. These steps were also proven unsuccessful. The newly appointed manager of General Community Hospital, Dr Nolan Wright was trained in medicine. With his appointment as the new manager, the expectation was for him to turn around the hospital to ensure the survival of the…show more content…
The (-ve) signs indicated that no profit has been recorded in both years. Further, the firm has provided no return to its shareholders. 3. PROBLEM IDENTIFICATION 1. High wages scale. The salaries accounted for the staff is considered high. For year 1994, the salaries accounted for physician, contracted services and also the payroll taxes was 39% of the total operating expenses. In 1995, the same items were 38% of the operating expenses. The details of the expenses are as follows: |Expenses |$ (1994) |$(1995) | |Payroll taxes |1,026,176 |1,274,260 | |Physician Fees |807,431 |787,894 | |Contracted Services |1,581,970 |1,564,821
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