Discussion Guidelines 6.1

Initial Post

Table 7.1 (Sample Balance Sheet, p. 186) in your Waxman textbook shows a considerable increase in assets from year to year.

• What are the underlying reasons driving this increase?
• Address three to four reasons and make sure to explain the causes of these driving forces.

196 TABLE 7.1 Sample Balance Sheet ($ in 000's) 3/31/17 3131/16 1-Year Current Assets Change Cash and investments (savings/checking) Growth $80,000 Patient revenue (money owed to hospital) $472,000 $56,800 $23,200 $370, 120 $101,880 140% Inventory (on the shelf) $16,400 $15,200 1 26% $568,400 $1,200 Subtotal $442, 120 $126,280 1 8% 1 29% Less: ($57,200) ($77,250) Bad debt $20,050 Charitable allowance ($14,100) ($13,680) 4 26% ($420) Contractual allowance ($269,300) ($233,750) ($35,550) 3% (340,600) ($324,680) ($15,920) 1 15% Subtotal $227,800 1 Total Current Assets 5% $117,440 $110,360 194% Fixed Assets $29,000 $27,500 Land $1,500 $805,000 1 5% Buildings (plant) $805,000 $610,000 $0 No Change Equipment $624,000 ($14,000) 2% Construction in progress $37,000 $28,000 $9,000 1 32% Total Fixed Assets $1,481,000 $1,484,500 ($3,500) 10.2% Less accumulated depreciation ($880,800) ($810,200) ($70,600) 1 9% $600,200 Net Fixed Assets $674,300 ($74, 100) 1 11% $828,000 $791,740 $36,260 Total Assets 1 5% Current Liabilities Accounts payable salaries, supplies, pharm $36,560 $27,600 ($8,960) 1 32% Accrued compensation and benefits $10,900 $8,280 ($2,620) 1 32% Accrued liabilities (interest, physician $2,520 $2,960 $440 15% contracts) $8,350 $9,000 $650 1 7% Current portion of long-term debt $58,330 $47,840 ($10,490) 1 22% Subtotal Long-Term Liabilities $37,000 ($1,000) 3% $38,000 Bonds payable $2, 100 $1,900 ($200) 1 11% Mortgage payable 3% $40, 100 $38,900 ($1,200) 1 Subtotal $86,740 ($11,690) 1 13% Total Current Liabilities $98,430 3% $729,570 $705,000 $24,570 Net Worth (Assets-Liabilities) 5% Total Liabilities and Net Worth $828,000 $791,740 $36,260 1