Fin/Hc 571

Alternate Working Capital Policy

FIN/HC 571

Elijah Heart Center (EHC) is reorganizing its working capital policy in order to reduce future issues that may arise. (EHC) has current financial problems that stem from a rise in patient care and other issues. Financing, accounts receivable, risks, and working capital management must be under control for (EHC) to have a promising future. There will be recommendations in this paper that discuss working capital shortage, funding options for new medical equipment, and working capital for future expansion.

Alternate Working Capital Policy
Elijah Heart Center (EHC) is based out of New York and is a 140-bed cardiac hospital that provides a full spectrum of cardiac options from laboratories, surgery, cardiac testing, and many other options for cardiovascular patients. Capital management is imperative because of the rise in patient care, which has resulted in an increase of revenues but a decrease in profitability. As a financial manager, I will determine how to keep the volumes up and increasing the profitability in the future. My recommendations will include short term and long term adjustments to help (EHC) increase cash flows within the company.

Elijah Heart Center (EHC) has a range of options for short-term financing available that need exploration. There are two alternate short – term financing options that will help immediately, which are reducing agency staff and reducing benefits. Agency staff income is usually double of other hospital staff.   These agency staff individuals can be replaced if needed with other employees that can be paid far less. This will help cut costs for (EHC) so it can focus on other avenues to increase profitability. Reducing employee benefits will also save (EHC) a good amount of money in the short and long term. Reduction in health insurance, retirement, increase salary benefits, and bonuses will help save money. With these two strategies implemented (EHC)...