11 Reporting Profits Flashcards
Financial statements
three most important financial statements are the income statement, the balance sheet, and the statement of cash flows
generally accepted accounting principles
guidelines for the content and format of financial statements
accrual accounting
accounting that uses economic events, not cash transactions, as the basis for reporting
The income statement
reports the results of operations of a business over some period—often one year. revenues, expenses, and profitability (the difference between revenues and expenses).
net patient service revenue
direct result of providing patient services.
Bad Debt
Now there must be a change in circumstances.
premium revenue
Revenue arising from capitated patients as opposed to fee-forservice patients
other revenue
Revenue that is related to patient services but not directly tied to the provision of clinical services. (hospital cafeteria)
straight-line method depreciation
calculating depreciation expense assumes the loss of value is constant over time
Net Income
total profitability including both operating and nonoperating income
noncash expenses
depreciation example
ratio analysis
process of creating and analyzing ratios from the data contained in a business’s financial statements and elsewhere to help assess financial condition
total profit margin
Net income divided by all (both operating and nonoperating) revenues
operating margin
Operating income divided by operating revenues
