Project #29366 - Financial Statement Analysis

Part I

 

The payer mix and expected volume (100 cases) for a hospital are as follows:

 

30 Medicare cases Pay $ 2,000 per case
30 Blue Cross Blue Shield cases Pay $ 2,200 per case
20 Commercial cases Pay 100 percent of charges
10 Medicaid cases Pay average cost
8 Self-pay cases Pay 100 percent of charges
2 Charity cases Pay nothing

 

Average cost per case is expected to be $2,200, and the average charge per case is $2,500.

 

Determine the net operating income for the hospital.

 

Part II

 

A nursing home has recently acquired a home health firm for $850,000 in cash. The balance sheet of the home health firm looked as follows prior to the acquisition:

 

Current Assets $ 200,000
Net Fixed Assets $ 100,000
Total $ 300,000
Current liabilities $ 100,000
Shareholders' equity $ 200,000
Total $ 300,000

 

Assume that the fair market value of the net fixed assets is $300,000 and the fair market value of the current assets is $200,000. Describe how this acquisition might reflect on the balance sheet of the nursing home.

 

Present your work for both parts as a 2-page report in a Word document formatted in APA style.

Subject Business
Due By (Pacific Time) 05/04/2014
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