Cases in Finance Dyuzbayeva Alina 20080258 Community General Hospital

1. Based on information presented in case, I can conclude that Community General Hospital is

organized as nonprofit organization. The main characteristics of voluntary organizations are: profit received are not distributed among shareholders, there is no simple and clear lines of ownership and accountability, all income should be used for maintaining operations and mission. First of all, lets look at the Balance Sheet: Trade Receivables are main source of Current Assets, so that organization is highly depended from commitment of an outside donor. Amount of an account Liabilities subject to compromise represents separate reporting of reorganization efforts from results of constant operations. This account usually appears when a company records for a bankruptcy, so that creditors will not be paid in full. That is why liabilities are two times higher than assets, as the result both years incurred fund deficit. From brief analysis of Balance sheet, company is unable to pay obligation to creditors and other third parties in the long run. Statement of Cash Flows provides data on the cash inflows and outflows of the organization between one date and another. Net Cash provided by OA fall from $752,930 to -$461,838, it means that organizations primary operations loss-making. For deep measure of performance of organization we can use common size analysis and trend analysis. We calculated some ratios: Current Ratio = CA/CL = 0.602 (1994); = 0.68 (1995) it means that company slightly improves financial situation and as the result ability its obligations o time. NWC = CA CL = -1781238 (1994); - 1473344 (1995) PM = Total Revenue-Total Expenses/ Total Revenue = 0.014 (1994); = 0.064
2. The core issues of Community General Hospital are:

 Mismanagement of the institution; the main funds and resources are gained from

people who make donations and support mission of institution because they think that its beneficial to society. But due to political changes and desegregation, organizations objectives and core values became unattached to public any more (especially black population) as the result investment funds and volunteers reduced their financing .Also there was no particular owner of institution, so that liquidity of administrators happened (1979-1985 7 administrators worked) Executive reorganization;
Financial illiteracy; consistency and fairness are hard to achieve for the reason that

there is diffuse nature of ownership and shareholding.

3. In order to come up with solution I propose to stakeholders become more active and more

involved in operations of business. At first, Community General Hospital should hire professional auditor to work with all necessary data, so that investors can see expanded disclosures, receipts and payments within the community, and better achieve nonprofit accountability. Second solution, teaching and public information campaign could raise awareness of differences in nonprofit operating practices and make an impact on donors, clients and communities. Plus government should also support and finance such organizations. And the third one is to hire qualified employee. In sphere medicine and healthcare should work only people that studied to because their profession concerned about health of people. In my opinion, Dr. Noland Wright should not work in hospital because he is unable to manage company in proper way due to his education and age. Moreover, his actions will cause more severe consequences. 4. Combination of all proposed solutions can help Community General Hospital and Dr. Wright to cope with issue, repay all debts and maintain business.