Financial statements provide an important insight into the operation of a healthcare organization.

| September 28, 2018

Financial statements
provide an important insight into the operation of a healthcare organization.
In this assignment, you will analyze the financial statements of a healthcare
organization.
First read the following
article, which describes how 15 measures provide an effective evaluation of the
financial performance of a healthcare organization. You will use a subset of
these measures, the financial strength index (FSI), in this assignment.
Cleverley, W. O., & Cleverley, J. O. (2005,
July). Scorecards and dashboards: Using financial metrics to improve
performance.Healthcare Financial Management, 59(7), 64–69. (AN
2009076343).
Select a nonprofit
healthcare organization of interest to you. Provide an overview of the
organization selected, including name and location.
Find financial data for
this organization using Guidestar (.guidestar.org/”>http://www.guidestar.org). (The
site requires free registration). All nonprofit organizations in the country
are required to file Form 990 with the Internal Revenue Service (IRS). Form 990
is public information, and the Web site Guidestar is a convenient way to access
990s. Form 990 provides a great deal of organizational financial information,
including income statements and balance sheets.

On the
Guidestar site, search for the selected nonprofit healthcare organization.
When you find it, look for the statement: “A Form 990 is available
for this organization.” Locate the legal entity that is the operating
organization of the facility. Some healthcare organizations have multiple
legal entities, including a foundation. Select the entity that includes
the patient services function.

Open the
most current 990 for the organization. It is a PDF file, and likely to be
50 to 100 pages in length. Don’t worry; you will only use the first three
pages. Income statement information is shown on pages 1 and 2. Balance
Sheet information is shown on page 3. (You may want to review more of the
990. For example, it might include the salaries of the highest paid administrators
in the organization.)

Your tasks:

Complete
the component parts of the FSI using the formulas in the article. Use the
“end of year” figures from the balance sheet. Be sure to show
the calculations.

Total
margin

Day’s
cash on hand, with debt financing percentage

Accumulated
depreciation percentage

Complete
the FSI using the formula in the article. Show the calculations.

Analyze
the organization by comparing the FSI, and the four components of the FSI,
to the indicators in the article. This will show where your selected
facility falls in the range of quartiles shown in the article. Perhaps one
or two of the ratios are low, and others are high. How does this impact
the composite indicator, the FSI? Highlight the strengths and weaknesses
of the organization based on this brief review.

Present the calculations
and your interpretation in a 4-page report. Format the report in APA style.
Name your document as:
LastnameFirstInitial_W1_A4.doc.
For example, if your name is John Smith, your report will be named
SmithJ_W1_A4.doc.
By Saturday,
October 12, 2013, submit the report to the W1: Assignment 4 Dropbox.

Grading Criteria

Maximum Points

Summarized information
about a selected nonprofit healthcare organization.

4

Calculated components
of FSI and the FSI.

8

Evaluated strengths
and weaknesses of the organization using indicators for components of FSI and
the FSI.

12

Applied APA standards
for writing style, spelling, and grammar.

4

Total

28

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