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Charles S. Lewis has just been named the CEO of Community Ho

Charles S. Lewis has just been named the CEO of Community Hospital, a 230-bed hospital located in an agricultural community of approximately 150,000 people. There is one other similar-sized hospital in the community. C.S. Lewis has been told by his CFO, J.R.R. Tolkein, that the hospital is in excellent financial condition, but Mr. Lewis is not convinced. He has requested and received the summary financial statements presented in Table 10-10.

226 CHAPTER 10 ANALYZING FINANCIAL STATEMENTS
Table 10-10 Summary Financial Information of Community Hospital* (2003-2007) (Data in Thousands)
2003 2004 2005 2006 2007

Balance sheet accounts
Cash & cash equivalents $ 34,402 $ 30,444 $ 45,848 $ 46,010 $ 73,711
Patient accounts receivable 39,506 38,878 35,444 38,853 35,647
Inventory 2,133 2,318 2,398 3,197 3,279
Gross fixed assets 187,278 221,548 240,988 256,652 276,458
Accumulated depreciation 73,227 79,523 89,324 101,007 113,851
Net fixed assets 114,051 142,025 151,664 155,645 162,607
Unrestricted capital funds 10,720 13,625 20,160 25,615 17,716
Total assets $ 238,365 $ 265,784 $ 276,965 $ 287,193 $ 311,140
Current maturities of LTD 111 1,794 1,431 2,211 1,143
Current liabilities $ 37,426 $ 38,492 $ 33,240 $ 31,699 $ 35,862
Long-term debt 2,032 12,821 11,720 9,578 9,570
Net assets $ 188,743 $ 204,262 $ 222,606 $ 237,022 $ 251,241

Income statement accounts
Net patient revenue $208,861 $ 225,950 $ 244,976 $ 257,784 $ 282,461
Other revenue 1,569 1,756 1,929 2,170 1,757
Total operating revenue $ 210,430 $ 227,706 $ 246,905 $ 259,954 $ 284,218
Total operating expenses $ 203,043 $ 219,768 $ 233,867 $ 254,382 $ 278,629
Operating income 7,387 7,938 13,038 5,572 5,589
plus Non-operating revenue 6,806 7,579 8,971 8,430 8,696
Excess of revenue over expenses $ 14,193 $ 15,517 $ 22,009 $ 14,002 $ 14,285
Depreciation $ 10,588 $ 11,161 $ 11,659 $ 12,184 $ 12,524
Interest 115 611 471 419 392

*Please note that not all asset and liability items are shown. The totals do not, therefore, foot to the individual account values.

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Charles S. Lewis has just been named the CEO of Community Hospital, a 230-bed hospital located in an agricultural community of approximately 150,000 people. There is one other similar-sized hospital in the community. C.S. Lewis has been told by his CFO, J.R.R. Tolkein, that the hospital is in excellent financial condition, but Mr. Lewis is not convinced. He has requested and received the summary financial statements presented in Table 10-10.

226 CHAPTER 10 ANALYZING FINANCIAL STATEMENTS
Table 10-10 Summary Financial Information of Community Hospital* (2003-2007) (Data in Thousands)
2003 2004 2005 2006 2007

Balance sheet ...

Solution Summary

Charles S. Lewis has just been named the CEO of Community Hospital, a 230-bed hospital located in an agricultural community of approximately 150,000 people. There is one other similar-sized hospital in the community. C.S. Lewis has been told by his CFO, J.R.R. Tolkein, that the hospital is in excellent financial condition, but Mr. Lewis is not convinced. He has requested and received the summary financial statements presented in Table 10-10.

226 CHAPTER 10 ANALYZING FINANCIAL STATEMENTS
Table 10-10 Summary Financial Information of Community Hospital* (2003-2007) (Data in Thousands)
2003 2004 2005 2006 2007

Balance sheet accounts
Cash & cash equivalents $ 34,402 $ 30,444 $ 45,848 $ 46,010 $ 73,711
Patient accounts receivable 39,506 38,878 35,444 38,853 35,647
Inventory 2,133 2,318 2,398 3,197 3,279
Gross fixed assets 187,278 221,548 240,988 256,652 276,458
Accumulated depreciation 73,227 79,523 89,324 101,007 113,851
Net fixed assets 114,051 142,025 151,664 155,645 162,607
Unrestricted capital funds 10,720 13,625 20,160 25,615 17,716
Total assets $ 238,365 $ 265,784 $ 276,965 $ 287,193 $ 311,140
Current maturities of LTD 111 1,794 1,431 2,211 1,143
Current liabilities $ 37,426 $ 38,492 $ 33,240 $ 31,699 $ 35,862
Long-term debt 2,032 12,821 11,720 9,578 9,570
Net assets $ 188,743 $ 204,262 $ 222,606 $ 237,022 $ 251,241

Income statement accounts
Net patient revenue $208,861 $ 225,950 $ 244,976 $ 257,784 $ 282,461
Other revenue 1,569 1,756 1,929 2,170 1,757
Total operating revenue $ 210,430 $ 227,706 $ 246,905 $ 259,954 $ 284,218
Total operating expenses $ 203,043 $ 219,768 $ 233,867 $ 254,382 $ 278,629
Operating income 7,387 7,938 13,038 5,572 5,589
plus Non-operating revenue 6,806 7,579 8,971 8,430 8,696
Excess of revenue over expenses $ 14,193 $ 15,517 $ 22,009 $ 14,002 $ 14,285
Depreciation $ 10,588 $ 11,161 $ 11,659 $ 12,184 $ 12,524
Interest 115 611 471 419 392

*Please note that not all asset and liability items are shown. The totals do not, therefore, foot to the individual account values.

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