Financial Health Of An Entity

Businesses purchase and use a variety of fixed assets, such as equipment, furniture, tools, machinery, buildings, and land. These fixed assets are long-term or relatively permanent assets. Also, they are tangible assets because they exist physically. They are owned and used by the business and are not offered for sale as part of normal operations. Perhaps the most descriptive titles these assets are known under are plant assets or property, plant and equipment. Depending on the industry, the plant assets of a business can be a significant part of its total assets. That is why the accounting for these long-term assets has important

1. Noninterestbearing notes 2. Loss contingencies 3. Committed lines of credit 4. Accounts payable 5. Pledging arrangements __ Use accounts receivable as collateral.__ __ Often require compensating balance.__ __ Only formal credit instrument is the invoice.__ __ Effective interest higher than stated interest.__ Recorded if probable and amount is known or__ reasonably estimable.__

34. What does it include as Cash and Cash Equivalents? – Cash and cash equivalents include cash and short-term highly liquid investments with an original maturity of three months or less held in both domestic and foreign financial institutions.

Accounts Receivable: This count is responsible for receiving payments from memberships and different services they provide.

Credit is granted to customers including credit limit and payments according to the customers’ financial performance. The company utilizes multiple lines of credit to increase the collectability of its certain accounts. According to GAAP, based on the assessment of the loans if the loans are received after the period, management has the capability to hold receivables until maturity or payoff. However, the amount due on the loans minus the allowance for doubtful accounts is the net on compiled balance sheet.

Healthcare – The healthcare care unit design and manufacture various surgical products and sanitizers for hospitals.

In the articles Messina et. al and Coyne et.al both deal with aspects of hospitals.

The first financial statement that one may turn to in order to figure out whether a company is healthy or not may be the income statement. The income statement can tell you whether a certain firm has been profitable, or not, over the specific time frame of the statement. It shows the revenues (or sales) minus expenses such as what it cost to manufacture the goods, marketing/sales/admin expenses, depreciation, income taxes, and even interest paid. A great place to start for a firms financial health would be whether it’s been profitable.

The author in the article “A board member’s guide to financial statement emphasizes the manner in which this information can assist board members to comprehend the accounting routine and the submission of the data in detail to its members via the treasurer. Observations made while being a guest at a board meeting appalled him at the approach the treasurer took to deliver the financial statement and at the board members who accepted the statement without querying the data.

Another group of items similar to contingent liabilities are undrawn bank facilities. Lending banks may have approved drawn down limits to the company. The company may draw down partially the total available bank borrowing limit, leaving an undrawn balance for later use. At the date of the financial statements some of these bank facilities may remain undrawn. However, it is possible that the undrawn portion may be fully utilized at the time of the asset liquidation exercise. At that point in time, the liabilities of the company may then be regarded as the highest, and therefore reflecting a balance sheet at highest

Goods and services in this sector include inpatient, outpatient, long-term medical care, medical goods including pharmaceuticals and supplies, and collective services such as administration requirements.

Piper, Thomas. Assessing a Company 's Future Financial Health. 911th ed. Vol. 9. Boston, MA.: Harvard Business Review, 2012. Print. Ser. 412.

Inventory is important to consider for the balance sheet as it’s listed after receivables since its less liquid than receivables. This is how patient care services are provided from inventory. The process starts when the services have been provided, notification of a bill sent to patient, then accounts receivables grow. As a result, inventory takes longer to convert to cash than receivables because it hasn’t been used to provide services. Next, cash is the most universal way to pay for items. Also, cash includes amounts on deposit in checking and savings accounts and cash on hand. Marketable securities are listed to be probably liquidated in the near future. A beneficial factor of marketable securities is they can be converted into cash in only a few days. In addition, marketable securities that the organization intends to hold as long-term investments shouldn’t be listed with current assets, but instead under a long-term investment category after fixed assets, (Finkler, S.A., Ward, D.M. & Calabrese, I.D., 2013).

Cash and cash equivalents are items found on a balance sheet that portrays the value of assets of a company that are held in cash or can be

Receivables can be defined as a company's right to payment of an amount of money from the debtors, which clearly belong among the assets. The assets can be divided into current and long term by the expected maturity at the time of their creation.