Health Services Resource Management Question 1: (a) Balance-sheet 2,0152,014 Assets Current-Assets Short term receivables11,80,86213,10,776 Cash and Cash Equivalents45,36,98531,27,657 Inventories of drugs40,13934,333 Other Current Assets20,4281,08,328 Total Current-Assets57,78,41445,81,094 Non-Current Assets Long term receivables87,76736,478 Motor vehicles2,0002,000 Property, Plant & Equipment82,93,62789,59,514 Total Non- Current Assets83,83,39489,97,992 Total Assets1,41,61,8081,35,79,086 Liabilities Current-Liabilities Short-term payables3,26,7086,98,129 Short term staff benefits10,99,8539,09,310 Other current liabilities38,69,05227,53,096 Total Current-liabilities52,95,61343,60,535 Non-Current Liabilities Long term loans2,40,8771,74,900 Total Current-liabilities2,40,8771,74,900 Total Liabilities55,36,49045,35,435 1
Health Services Resource Management Equity86,25,31890,43,651 Total Equity86,25,31890,43,651 (b) Income Statement 2,0152,014 Income Patient Fees revenue27,40,23925,10,626 Private practice fee revenue2,86,9963,06,927 Government Grants34,23,01534,22,197 State government grants64,04874,586 Car park revenue42,50799,723 Capital Purpose Income2,71,5213,39,864 Interest and dividends received92,01263,385 Other revenue8,21,0576,83,808 77,41,39575,01,116 Expenses Salary and wages50,60,57848,87,643 Medical expenses80,98277,529 Drug expenses19,11172,768 Food expenses2,39,0352,37,695 Fuel, Light, Power and Water1,46,9131,23,338 Superannuation3,99,0743,99,131 Work cover insurance1,03,93084,714 Insurance costs3,68963,889 Lease Expenses80,10978,321 Maintenance Contracts34,63943,560 Motor Vehicle Expenses41,90547,613 Non-Salary Labour Costs36,56117,644 Patient Transport expenses8104,531 Repairs & Maintenance71,23748,672 Other Administrative Expenses9,20,2449,03,036 2
Health Services Resource Management Accounting fees13,400970 Audit Fees9,4059,495 Bad & Doubtful Debts0407 Depreciation and Amortisation7,30,3047,09,452 Domestic Service expenses1,67,8021,46,659 81,59,72879,57,067 Net Profit-4,18,333-4,55,951 (C) Two significant changes in the company's financials are: 1) Increase in current assets of 11,97,320 (+26% year on year change) and decrease in non- current assets of 6,14,598 (-7%) resulted in the increase in total assets of 5,82,722 (+4% yoy). 2) Increase in current liabilities of 9,35,078 (+21% yoy) and increase in non-current liabilities of 65,977 (38%) resulted in the increase in total liabilities of 10,01,055 (+22% yoy). Ability to pay short-term debts can be seen via liquidity ratios: 20152014 Current Ratio = Current Asset / Current liabilities 1.0911699931.05058072 (57,78,414/52,95,613)(45,81,094/43,60,535) Current ratio of company in 2015 is more than 1 and even this ratio has increased slightly as compared to 2014. So, the company's ability to pay short term debt is good. (d) 3
Paraphrase This Document
Need a fresh take? Get an instant paraphrase of this document with our AI Paraphraser
Health Services Resource Management Cash-flow statement 4
Health Services Resource Management 20152014 Cash at beginning of period12,43,62611,25,445 Cash-flow from operations Receipts Capital Grants from Government33,4291,08,029 Operating Grants from Government34,87,06335,06,782 Patient and Resident Fees Received29,30,78122,57,929 GST Received from ATO8,020172 Donations and Bequests Received33,12838,724 Other Capital Receipts033,296 Other Receipts6,92,3388,10,792 71,84,75967,55,724 Payments Payments for Supplies & Consumables16,92,46713,28,683 Non Salary Labour Costs36,56117,644 Employee Expenses Paid51,86,52051,30,345 69,15,54864,76,672 Net cash receipts from operations2,69,2112,79,052 Cash-flow from investing Proceeds from sale of Non-Financial Assets032,600 Payments for Non-Financial Assets63,5712,64,621 Net cash receipts from investing activities-63,571-2,32,021 Cash-flow from financing Interest Received88,72771,150 Net cash receipts from investing activities88,72771,150 Total periodic cash receipts2,94,3671,18,181 Cash at end of period15,37,99312,43,626 5
Health Services Resource Management (e) 20152014 Net cash inflow = Cash at end of period - Cash at starting period 2,94,3671,18,181 15,37,993 - 12,43,62612,43,626 - 11,25,445 Profit/Loss according to income statement = Accounting Income - Accounting Expense -4,18,333-4,55,951 (77,41,395 - 81,59,728)(75,01,116 - 79,57,067) The main reason for difference between these two figures is that accrual accounting is used to calculate net profit/loss in income-statement and cash accounting is used to calculate net cash-flow in cash-flow statement. In accrual accounting revenue is recorded when it is earned (independent of the cash movement) and expenses are matched with the revenues. In cash accounting transactions are recorded depending upon the cash receipts and payments. Question 2: (a) 6
Secure Best Marks with AI Grader
Need help grading? Try our AI Grader for instant feedback on your assignments.
Health Services Resource Management Accrual Account ing Revenues Patients receive health care services 60000 Patients receive health care services of $250,000 on terms of net 30 days 250000 Expenses hospital pays $50,000 for salaries for work done in March 50000 Monthly Rent4000((Total rent of four month 16000/4)) Phone expense1000 Accounting Profit/Loss255000 Cash Account ing Cash inflow Patients pay $60,000 for health care services received on March 5 60000 Cash outflow paid rent in advance for the months of March, April, May and June - $16,000Rent 16000 8
Health Services Resource Management hospital pays $50,000 for salaries for work done in March 50000 Cash Profit/Loss-6000 April Accrual Account ing Revenues Patients receive health care services of $250,000 on terms of net 30 days 250000 Expenses Monthly Rent4000((Total rent of four month 16000/4)) Drugs Used35000 hospital pays $55,000 for salaries for work done in March 55000 Accounting Profit/Loss156000 Cash Account ing Cash inflow 9
Paraphrase This Document
Need a fresh take? Get an instant paraphrase of this document with our AI Paraphraser
Health Services Resource Management Patients pay $250,000 for services received in March. 250000 Cash outflow hospital pays $55,000 for salaries for work done in March 55000 Cash Profit/Loss195000 May Accrual Account ing Revenues Patients receive health care services of $200,000 on terms of net 30 days 200000 Expenses Monthly Rent4000((Total rent of four month 16000/4)) Drugs Used65000 Hospital pays $45,000 for salaries for work done in May 45000 Accounting Profit/Loss86000 Cash Account Cash inflow 10
Health Services Resource Management ing Patients pay $250,000 for services received in April. 250000 Cash outflow Hospital pays phone bill for $1,000 received on April 7. 1000 The hospital pays $160,000 for drugs received in April. 160000 Hospital pays $45,000 for salaries for work done in May 45000 Cash Profit/Loss44000 June Accrual Account ing Revenues Patients receive $55,000 in services and pay for them on the same day 55000 Expenses Monthly Rent4000((Total rent of four month 16000/4)) Drugs Used60000 Pays $50,000 cash for drugs50000 11
Health Services Resource Management Hospital pays $40,000 for salaries for work done in June 40000 Accounting Profit/Loss-99000 Cash Account ing Cash inflow Patients receive $55,000 in services and pay for them on the same day 55000 Patients pay $200,000 for services received in May 200000 Cash outflow Pays rent of $16,000 in advance for the months of July, August, September and October. 16000 Pays $50,000 cash for drugs50000 Hospital pays $40,000 for salaries for work done in June 40000 Cash Profit/Loss149000 The reason for the difference between these two calculations is that in accrual accounting revenue is recorded when it is earned (independent of the cash movement) and expenses are matched with the revenues. In cash accounting transactions are recorded depending upon the cash receipts and payments. In March the accrual accounting profit of 255000 was too high as compared to loss according to the cash accounting. The reason for this is the high revenues in this month but the cash for 12