June 17, 2013
Health care finance is a term used to describe the accounting and financial management of a health care organization as well as the principles and practices used in any health care organization, and meant to ensure the financial security and interests in the organization. There are three types of financial environments in the health care world. There is the for-profit financial environment, not-for-profit financial environment, and government financial environment. This article will present one organization for each of the financial environment and describe their financial structure, policies, management, and difficulties they face.
Financial structure of three organizations
The way to learn the financial structure of any organization is by studying their financial statements. The investor or individual should begin with the balance sheet, and moving on to studying the income statement, cash statement, and any other financial statement that the organization uses to keep track of the yearly finances. Starting with the balance sheet as it should provide information on such things as short/current long-term debt, long-term debt, and owner's/stockholder equity. If the financial structure is different from a capital financial structure account, the search on the balance sheet should be on long-term debt and equity only (ADVFN, 2013).
The first financial environment capital finances structure is on a for-profit organization called Tenet Healthcare Corp. (THC). Tenet Healthcare Corp balance sheet shows the end of the organization's fiscal years (December 30) for 2010, 2011, and 2012, and each year states that the organization is doing very well; however, this article will concentrate on the most current organizational balance, which is the end of 2012. The balance sheet for Tenet Healthcare Corp reveals that the short/current long-term debt was at $94,000, the long-term debt at $5,158,000, and the owner/stockholders equity was at $1,143,000 (Tenet Healthcare Corp: Balance Sheet, 2013). The company's net tangible asset, at the end of 2012, was at $423,000. There is a slight difference in the total assets calculation, and the calculation of the liability and stockholders equity total by about $16,000, which is the exact amount of the misc stock options warrants ($16,000) (Tenet Healthcare Corp: Balance Sheet, 2013). If this is the reason for the differences is unknown; however, Tenet Healthcare Corp should discover why there is a difference. The income statement shows Tenet Healthcare Corp. total revenue, at the end of 2012, at $9,119,000 with gross profit at $7,567,000, which is a little higher than 2011 ($7,106,000). The net income applicable to common shares, at the end of 2012 was $141,000, which is considerable higher than the end of 2011 ($58,000) (Tenet Healthcare Corp: Income Statement, 2013).
The next financial environment financial structure is on not-for-profit organization called The American Cancer Society, Inc. The American Cancer Society, Inc. balance sheet shows the end of the organization's fiscal years (August 31) of 2011 and 2012. The organization's total net assets in 2011 was doing very well, and financially up; however, in 2012, the balance sheet shows that the total net assets is down, compared to 2011 (American Cancer Society, Inc., 2013). The explanation for the differences between each year is for a variety of reasons, for example; cash and cash equivalents is down, short-term investment is down, bequests receivable is down, and long-term investment are considerable higher. Liabilities for The American Cancer Society, Inc. is higher than last year because of accounts payable and other accrued expenses, employee retirement benefits, other liabilities, and gifts annuity obligations, as every one of these are up from last year (American Cancer Society, Inc., 2013). The balance sheet shows that the net assets for unrestricted, temporarily…