Financial Data Analysis
Jesse Patacsil
HCS 577
June 29, 2012

Financial Data Analysis
Financial data analysis is the procedure for assessing budgets and other finance-related things to determine the sustainability of a business venture. A financial analysis is used to analyze whether a unit is constant, solvent, liquid, or profitable enough to be invested in by shareholders. When looking at a specific company, the financial analyst will often focus on the income statement, balance sheet, and statement of revenue and expenses statements. In addition, one key area of financial analysis involves comparing the company's past year performance into an estimate of the company's future performance.(Stock Analysis, 2912)
On the Balance sheet the patient accounts receivable had a larger allowance for bad debts on the audited version. There was $1,000,000 more in the allowance for bad debts (or doubtful accounts) in the audited version of the financial statements (Patton-Fuller Community Hospital, 2009). This means that the hospital most likely will not collect on this patient accounts receivable and has classified it as a bad debt so it is estimated to result in a loss. The management uses historical data to estimate bad debt but new agreements with managed care payers required an adjustment to the expense and allowance during the audit (Patton-Fuller Community Hospital, 2009). This also decreases the total assets by $1,000,000 in the audited version of the balance sheet. These two are a pair and are both affected by each other.
The Statement of Revenue and Expense also reflects this loss. The unaudited version does not account for the $1,000,000 of doubtful accounts and the audited version does. The audited version is $1,000,000 less than the unaudited version in the Expenses category. This also reduced the Operating Income and Net Income by $1,000,000