Happy Hospital Case

In this case study, Happy Hospital is a medium sized community hospital which is a 501(c)3 Corporation.   “To be tax-exempt under section 501(c)(3) of the Internal Revenue Code, an organization must be organized and operated exclusively for exempt purposes set forth in section 501(c)(3), and none of its earnings may inure to any private shareholder or individual. In addition, it may not be an action organization, i.e., it may not attempt to influence legislation as a substantial part of its activities and it may not participate in any campaign activity for or against political candidates.” (IRS) At this time of year, the hospital is reviewing their financial statements for end of year.   While in this process, they will compare with the year before to acknowledge the differences between the two years.   When looking at the two statements, a sizeable amount of current assets were found.   “In fact, Happy Hospital is going into the current year with approximately $12.5 million in current assets compared to $4.3 million in current liabilities.” (Case Study)   The question the company now must ask themselves is how to use the current ratio of 2.9 to the company’s advantage.
Budgets and performance reports in the decision-making process
Happy Hospital wants to enhance their current technologies and make the hospital a more organized and error free facility.   The CEO, Mr. Harm O. Knee wants to automate medical records and create a more electronic environment.   Of course with this opportunity to move forward in technology, you need to do the proper research on the equipment being purchased which the team has done.   The budget for the current year along with the forecast of the next year needs to be reviewed.   This forecast should include a performance budget, which fully integrates the annual performance plan.   “Using performance data in the budgetary process means integrating information about outcomes and impacts in decisions about the allocation of funds,...