CashFlows, Financial Position and Income Statements
Thebalance sheet is a statement that is used to show the financialposition of an organization at the end of a specified period, usuallya year (Needles & Powers, 2014). In a health organization likeStanford Healthcare facility, it would show the organization’sassets and liabilities. The document is further divided in currentasset and liabilities, and long-term assets and liabilities (Needles& Powers, 2014). Some items which might be reflected inStanford’s current assets are cash, short-term investment, patientaccount receivables, inventories and prepaid expense among others.Its long-term items might be equipment, property, and long terminvestment. On the other hand, its current liability will haveaccrued salaries, account payable, self-insurance reserves, while itslong-term liability items will be self-insurance reserves, pensionliability, and long-term debt among others.
Cashflow statements are used to show how a change in balance sheetsaccounts affect cash and cash equivalents (Weygandt, 2012). It thenbreaks the analysis down to financing, operating and investingactivities. Some operating activities that might be captured amongothers in Sanford health care are increasing net assets, increase ordecrease in non-controlling interests, depreciation, andamortization, provision for doubtful accounts, realized gains oninvestment and unrealized gains or loss on investment. While some ofthe investing activities might be proceeds from the issuance of debt,costs issuance of debt, cash provided by financing activities. Otheritems that might be captured are, interest paid, donated securitiesand equity transfers.
Onthe other hand, income statements are used to show financialperformance over the accounting period in a year (Needles &Powers, 2010). In Sanford hospital, it would give a summary of how itincurs its expense and revenue. Its expenses would be salaries,medicines, miscellaneous, telephone bills, repairs, depreciation, andother expenses. Its revenues would capture operating revenue,provision for doubtful accounts, premium revenues and net assetsreleased from restriction used for the operation.
Needles, B. E.,& Powers, M. (2014). Principlesof financial accounting(12th ed.). Cengage.
StanfordHealth Care. (2015). Consolidated Financial Statements August 31.2015 and 2014. StanfordHealth Care,1-41. Retrieved from//stanfordhealthcare.org/content/dam/SHC/about-us/bondholder-information/docs/consolidated-finanical-statements-august312015and2014.pdf
Weygandt, J. J.(2012). Accountingprinciples(6th ed.). Etobicoke, Canada: J. Wiley & Sons Canada.