Hrm 531 Week 1 Financial Analysis Paper

When determining whether to merge or partnership with another hospital is a beneficial choice, one will need to review financial information to make an informed decision. According to Cleverly, Cleverly, and Song in order to make effective decision it requires adequate knowledge and interpretation of financial information. Understanding the accounting processes of business decisions results in effective operational decisions (2012). Some of the financial statements that are used to make these decisions are income, itemized, balance statements, net assets, and cash flow.
When analyzing financial statements some of the essential analysis ratios that are reviewed are the profitability of beds occupied and IP discharges within a cycle or operating/patient

margins within a period (Datatrends, 2006). Reviewing financial statements and breaking down the information to review specific aspects of the organizations flow to gain insight into how management teams have worked together in maintaining financial direction (Collum et al., 2014). An organizations ability to properly manage the revenue cycle results in well-organized financial standing in addition to their ability to management money successfully among other managers (Rauscher & Wheeler, 2012). This information needs to be used to determine when deciding whether this hospital is good financial standing before agreeing to a merger.

References
Cleverley, W. O., Cleverley, J. O., & Song, P. H. (2012). Essentials of health care finance (7th ed.). Sudbury, MA: Jones & Bartlett Learning.
Collum, T., Menachemi, N., Kilgore, M., & Weech-Maldonado, R. (2014). Management Involvement on the Board of Directors and Hospital Financial Performance. Journal Of Healthcare Management, 59(6), 429-445.
Data trends. Declining operating margins show U.S. hospitals still face challenges. (2006). hfm (Healthcare Financial Management), 60(2), 162.
Rauscher Singh, S., & Wheeler, J. (2012). Hospital Financial Management: What Is the Link Between Revenue Cycle Management, Profitability, and Not-for-Profit Hospitals' Ability to Grow Equity?. Journal Of Healthcare Management, 57(5), 325-339.