Unit $3$: Discussion

Financial Statments

Introduction$$

In this LearnScape, the student is asked to assume the role of an experienced labor law attorney who recently joined the Board of Directors of hospital system and must determine whether the hospital should consider a bond to finance a major hospital renovation. A major hospital renovation requires a significant capital investment. In this scenario, the Board is looking to secure bond financing $($long$-$term debt$)$ to raise some or all of the capital for this proposed project. Does this make sense given the current financial position of the organization? The scenario makes clear that there is no one uniform methodological approach for assessing the financial position of the organization before making capital financing decisions.

What that said, it is generally understood that a systematic analysis of the firm$$s financials will be necessary before making such an important decision. It is equally important to keep in mind that all financial decisions should not only rely upon the numbers, but that qualitative factors and ethical implications should also be factored into the decision$-$making process. This does not mean that the numbers should be ignored, but rather an acknowledgement that decisions need to take into consideration other relevant implications before being finalized. $$