DECK 8 Flashcards
Bills, other obligations & commitments that has been incurred & must pay.
Has two categories: current & long term
Liabilities
Obligations due within 1 year
Categories such as: accounts payable, salaries & benefits
Current Liabilities
Obligations paid in future years
Debts such as: mortgages, stocks &/or bonds
Long Term Liabilities
Money that will fund future acquisitions & programs.
The value of assets in excess of liabilities
If money donated for specific purposes funds may be restricted.
Funds Balance or Owner Equity
3 Types of Ratios
Liquidity Ratios
Leverage Ratios
Efficiency Ratios
Measures the strength & weakness of the facility’s current financial position.
Liquidity Ratios
Measures the degree to which the organization is using borrowed money.
Organization’s able to meet its long term obligations & needs.
Leverage Ratios
Ratio of expenses to revenue
Efficiency Ratio
Amount of activity or output usually expressed in terms of patients or procedures
Volume
Short-term commitments that are liquid & can quickly be converted to cash (less than 1 year).
examples: accounts receivables, paid expenses & inventories cash
Current Assets
Two Categories of Assets
Current and Fixed
A written report that quantitatively described the financial health of an organization
Comprised of balance sheet, income statement & cash flow statement
Financial Statements
Statements of the organization’s assets, liabilities & worth at a particular point in time.
Does not indicate actual performance
But does identify & compare current & past performance.
Balance Sheet
A record of financial performance for a particular reporting period, identifies revenues generated & expenses as incurred for the facility.
Called the profits & loss statements
Income Statement
A measure of an organizational financial health.
Record of cash receipts less cash payments over a given period of time.
Cash Flow Statement
