Established in the year 1975, Patton-Fuller Community Hospital (PFCH) has enjoyed considerable success, a consequence of staffs’ dedication to providing quality patient care services. With regards to the economic trend analysis commencing from the era of the economic downturn (2008) to the year 2009, the board has a reason to be optimistic about the year 2010, in spite of a backdrop that is a consequence of the then economic depression. Basically, following a two-tier (2008 and 2009) audit report, the Chief Financial Officer (CFO), Zacharie Hardie, underscores his optimism by stating that PFCH will “weather the storm” (Patton-Fuller Community Hospital, 2009).
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Principally, a critical analysis of an annual report reveals an upward trend in the post-economic recession period. The balance sheets indicate again in the total assets (more than $35 million). However, one may argue that this is offset by the liabilities, but while enjoying higher revenues as well as low expenses relative to the previous year, this finally translates to a total gain (more than $15 million) in the net income, though still operating at a loss ($373 thousand).
This is set to improve further, translating into profits in the year 2010, as the economy heals more. The liabilities incurred and hence the revenues gained are indicative of the board’s rational investment plans. The budget projections of the year 2009, was a little shy of the actual, for instance, it had projected a net operating loss of $4,416,000 contrary to the aforementioned loss. As such, the year 2010 is set to gain exponentially. No loss is expected; however, the interest rates of the loans borrowed in the preceding year will be highly felt in the year 2010. Because of the Managed Care intervention, the net patient revenues are set to increase, nevertheless, the patient census is expected to reach maxima and steady (Patton-Fuller Community Hospital, 2009).
As regards staffing, the year 2010 is expected to be busy with a host of patients a little more than the preceding year thus;, the board is expected to hire few nurses to improve on the nurse-to-patient ratio. On a lighter note, the factors limiting staffing include the patients’ population together with the wages. With the negligible change in patients’ population, I expect the wages to increase by a slight margin. I expect the hospital to continue upholding its staffing strategy, which is done with respect to patients’ census. In effect, they cut on the net expenses vital in increasing the profit margin (Hardie, 2009).
Other elements of the budget projections that are expected to change in the year 2010, courtesy of the economic trend, include utility costs. Chiefly, with the previous year’s purchases of novel and yet sophisticated equipment, the costs of electricity, water, and fuel will have to increase. Nevertheless, the rates of depreciation cum amortization are set to remain the same as the previous year’s since no more supplies of equipment are anticipated.
As Managed Care continues with its collection of funds though in a lackluster manner, an increase in the coffers of the ‘Doubtful accounts’ is projected. This will impact positively on the net income, for it increases the current assets.
In a synopsis, the positives that are projected in the year 2010 decimate the costs, and as such, the economic uncertainties synonymous with the year will surely go unnoticed.
Hardie, Z. (2009). 2010 Operating Budget Assumptions. Arizona: University of Phoenix Press.
Patton-Fuller Community Hospital. (2009). Annual Report 2009. Arizona: University of Phoenix Press.