BHA FPX 4008 Assessment 2 Financial Statement Analysis BHA-FPX4008 Health Care Budgeting and Reporting

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Introduction

In this essay, I will analyze assets and liabilities to evaluate Vila Health’s economic state. This analysis will include examining how the hospital’s financial situation has evolved and how patient account receivables have changed. Additionally, matching revenue from previous fiscal years will underline Vila Health’s financial commitments for the upcoming fiscal year. Lastly, I will consider how Vila Health System’s financial stability is impacted by personnel compensation and benefits (Vila Health, n.d.).

Financial Position

Assets encompass everything a hospital owns and may use to generate future financial advantages, such as money, land, buildings, and equipment (Golway, 2019). Conversely, liabilities are financially obligated debts resulting from costs. Unlike penalties, which have the reverse impact, assets add value to a hospital’s bottom line and advance equity across the healthcare system. The hospital’s financial health is reflected by growing assets that exceed obligations (Finkler et al., 2020; Kenton, 2010). The financial statement records place the worth of St. Anthony Medical Center at $191,246,229. I tallied up the hospital’s recent FYI 2022 totals for investments, building, machinery, and capital resources to calculate the total liabilities, which equated to $231,341,925. Liabilities exceed total assets according to the hospital’s financial situation. Therefore, it should be considered to make a new attempt to cut spending for the upcoming fiscal year. This position places an undue burden on the hospital due to the need to raise funds and find additional sources of income to cover costs (Vila Health, n.d.).

Compare Financial Position to Previous Years

In comparison to fiscal years 2022 and 2020, assets and liabilities have decreased according to the financial situation of St. Anthony Medical Center for the fiscal year 2021. As of the financial year 2021, there were $187,972,799 in overall total assets. The $191,246,229 in 2022 will be $11.9 million less than the $199,889,346 in 2020. The hospital concentrated on providing services for fixed equipment construction during 2021, which saw a $27.5 million increase from 2020. Executives at a hospital must estimate and budget for potential losses and financial consequences before putting any official plans into action, including expanding, buying a new building, or starting construction. The overall asset column of a hospital is impacted by unforeseen charges. When compared to liabilities from the prior year, liabilities in the fiscal year 2021 fell dramatically. In 2021, the hospital owed $189,173,761 million less between notes and loans due to parents than in 2020 and 2022. Accounts payable experienced a linear behavior of progressive expansion, growing from $12,401,459 in 2020 to $16,230,075 in 2022 (Finkler et al., 2020; Kenton & Yushebg, 2019; Vila Health, n.d.).

Accounts Receivable Changes

An account receivable is a pending sum due to a hospital for services provided and charged to a patient. The hospital’s budget typically lists accounts receivable as an asset and makes that disclosure. As money is collected, these accounts are seen as potential sources of cash earnings. Accounts receivable at the revenue of St. Anthony Medical Center decreased by $13,755,722 million between the fiscal years 2020 and 2021, and it decreased even more between the fiscal years 2020 and 2022. Accounts receivables can assist the hospital in generating cash flow, which is then used to pay for operating expenses, investments, or new hospital activities (Finkler et al., 2020; Kenton & Yushebg, 2019; Vila Health, n.d.).

To boost the bottom line, lower accounts receivable, and improve the hospital’s cash flow, billing methods must be employed at St. Anthony Medical Center. The first step is to file claims every day. States indicate that as a consequence, insurance providers recurrently respond to submissions between five to seven business days and at times on a specific day of the month. In order to enhance the hospital’s cash flow, it is advised that hospitals file claims either the day of the appointment or one working day afterward. Additionally, suppose a hospital is delayed in filing claims. In that case, patient account receivables may increase, creating a backlog, and there is a chance that billing inaccuracies will increase when claims are delivered. It is imperative that during an appointment, a patient’s co-payment or deductible is collected. Hospitals should demand payments up front rather than providing subsequent invoices if a patient’s insurance plan has a co-pay requirement, thus decreasing account receivables and following billing inquiries (Finkler et al., 2020; Golway, 2019; Kenton & Yushebg, 2019; Vila Hea