Riverside Community hospital is a small non-profit hospital, with about 210 beds available for patient use (HAP 2010). Riverside hospital has recently come into serious competition with a for-profit hospital in their area, and Riverside is worried that the cost of services in their area will skyrocket. Though Riverside has strengths, the hospital also has financial weaknesses that need to be addressed. Riverside Community Hospital has an overspending issue, and by analysis Riverside Financial situation, the hospital can be in a better financial standing.
The strengths of Riverside Community Hospital are: having the highest MSA scores, and having community support, and being a part of Joint Commission (HAP 2010). Riverside has had the highest …show more content…
When it comes to operation cash flow, the hospital has lost cash flow every year. The loss of cash flow may be due to the fact that out patients are being treated like in patients, and fewer operations are actually being done (HAP 2010).
Operating Cash Flow: Riverside Community Hospital (HAP 2010)
2006 2007 2008 2009
$7,192 $5,378 $4,533 $3,481
Another cash flow issue involves the cost of expenses compared to total revenue, even though the expenses were less than the revenue, the balance could be much better.
Revenue: 2006 2007 2008 2009 $28,497 $30,033 $32,429 $36,416
Expenses: $25,283 $27,404 $30,327 $33,958
Over expenses: $3,214 $2,629 $2,102 $2,458
Revenue vs. …show more content…
standard industry ratios. Du Pont Analysis, “Summarizes and highlights a businesses financial condition”, which is mandatory to understand for the successful of the hospital (FACHE 2013). The industry average total profit margin is 3%, and Riverside Community hospital’s total margin is 6% (HAP 2010). This information shows Riverside Community Hospital does have more profit than the industry average, but could always be better. Nevertheless, Riverside has less total asset turnover of .89%, while industry average is .67%. Still, Riverside ends up having a higher return on equity capital 7.66%, while the average is around 6%. Ratio analysis will help to make the industry average and Riverside hospital information more clear, and can help show where an organization is going wrong financially (FACHE
The strengths of Riverside Community Hospital are: having the highest MSA scores, and having community support, and being a part of Joint Commission (HAP 2010). Riverside has had the highest …show more content…
When it comes to operation cash flow, the hospital has lost cash flow every year. The loss of cash flow may be due to the fact that out patients are being treated like in patients, and fewer operations are actually being done (HAP 2010).
Operating Cash Flow: Riverside Community Hospital (HAP 2010)
2006 2007 2008 2009
$7,192 $5,378 $4,533 $3,481
Another cash flow issue involves the cost of expenses compared to total revenue, even though the expenses were less than the revenue, the balance could be much better.
Revenue: 2006 2007 2008 2009 $28,497 $30,033 $32,429 $36,416
Expenses: $25,283 $27,404 $30,327 $33,958
Over expenses: $3,214 $2,629 $2,102 $2,458
Revenue vs. …show more content…
standard industry ratios. Du Pont Analysis, “Summarizes and highlights a businesses financial condition”, which is mandatory to understand for the successful of the hospital (FACHE 2013). The industry average total profit margin is 3%, and Riverside Community hospital’s total margin is 6% (HAP 2010). This information shows Riverside Community Hospital does have more profit than the industry average, but could always be better. Nevertheless, Riverside has less total asset turnover of .89%, while industry average is .67%. Still, Riverside ends up having a higher return on equity capital 7.66%, while the average is around 6%. Ratio analysis will help to make the industry average and Riverside hospital information more clear, and can help show where an organization is going wrong financially (FACHE