Financial Indicators

The financial indicator used in the simulation for the Perspective of a Cardiac Care Hospital for analyzing the capital shortage, funding for equipment acquisition, and funding options for capital expansion are discussed in the following paragraphs. The first paragraph will tell which of the cost cutting options I selected and why. The second paragraph will talk about the funding option I selected for equipment acquisition and the reasons behind that decision. The third paragraph will discuss the options for capital expansion, which option I choose and why.

Bridging a working capital shortage will take cost cutting measure. One of the cost cutting methods would be to a change in the skill mix of the employees and reducing staff.   Usually cutting staff should be the last thing a company should do however with employee compensation and benefits expenses it does tend to be the company‚Äôs largest expense.   The patient volume and revenues should be increasing as the productivity is decreasing. The financial performance should be evaluated in order to bridge the working capital shortage.   One of the things the company will have to do to bridge the working capital shortage is to obtain a working capital loan. The loan will enable the company to stabilize until the financial trouble can be resolved. The company needs to focus on both short term and long term financial performs of the company.   If the company can not resolve the short term cash flow problem then they will not be able to resolve the long term problems. The cash flow of a company is used to measure company liquidity. A company can fail because of a shortage of cash. A company may be profitable but have little operational cash. Cash flow can be used to determine a company quality of income. Having a shortage of working capital could be a management problem. Changing the skill mix can involve developing skills among a particular group. Changes may be driven by many motives but cost saving would be high on the...