Financial Health Of An Entity

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Hospital Financial Statements The financial health of an entity can be defined as its ability to continue operations as a going concern. There are three facets to this ability: 1) Balance of revenue and expenses 2) Adequate resources to ensure delivery of services and financing of operations in both the short- and long-term 3) Entity should be able to renew or replenish itself Measures of revenue, expenditure, and capital available are often tracked and reported for a specific period, typically one year. This information is published in various financial statements which then present the picture of the hospital’s financial position during a given period. It is, therefore, necessary that all members of the board of directors be informed on…show more content…
Cash equivalents comprise of certificates of deposits, savings accounts, and other temporary marketable securities (Cleverley & Cameron, 2007, p. 200). Accounts Receivable: This portion shows legally enforceable claims on customers for prior services or goods. Inventories and Supplies: Inventories within the hospital consist of items to be used in the delivery of health care services. These may range from normal office supplies to specialized laboratory chemicals. Prepaid Expenses: These depict expenditures that have already been made for future service. Plant, Property, and Equipment Property and equipment may at times be referred to as fixed assets. Items within this group denote investment made intangible, permanent assets, which may also be called capital assets of the hospital. Land and Improvements: This section shows the historical cost of land owned by the hospital as well as the historical cost of any alterations or improvements done on it. Buildings and Equipment: This section represents all equipment and buildings owned by the hospital and which are utilized during the hospital’s nominal course of operation. Construction in Progress: This section depicts the amount of money used on projects that are still unfinished by the time the financial
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