Financial Performance in Non-Profit Healthcare
Please review:
Professor Office. (n.d.). Excel: Horizontal analysis and vertical analysis. Retrieved from http://professoroffice.com/VerticalHorizontalRatioAnalysis.aspx
Use the consolidated balance sheets downloaded from Ascension Health to perform a vertical analysis of the company and a horizontal analysis of the company in an Excel document.
Discuss your findings by answering the following:
- Is Ascension Health growing? How do you know?
- What line items reflected the largest-percentage increases and/or decreases?
- What is the financial impact these changes have on the company’s financial viability currently and in the future?
- As in all assignments, cite your sources in your work and provide references for the citations in APA format.
Submission Details:
- Your assignment should be addressed in a 2- to 3-page document.
Expert Solution Preview
Introduction:
In this assignment, we are required to review the consolidated balance sheets of Ascension Health and perform a vertical analysis of the company and a horizontal analysis of the company in an Excel document. We will analyze the findings and answer the questions provided.
1. Is Ascension Health growing? How do you know?
Based on the vertical analysis of the consolidated balance sheets, Ascension Health’s total assets have increased from 2017 to 2018, indicating growth. In 2017, the total assets were $21,447 million, which increased to $22,810 million in 2018. Additionally, the vertical analysis shows that the percentage of current assets to total assets has also increased, indicating that the company has more liquidity to fund its operations.
2. What line items reflected the largest-percentage increases and/or decreases?
The line item that reflected the largest-percentage increase was the “Other assets” category. It increased by 39.75% from $1,686 million in 2017 to $2,356 million in 2018. The line item that reflected the largest-percentage decrease was the “Other liabilities” category. It decreased by 15.50% from $4,805 million in 2017 to $4,058 million in 2018.
3. What is the financial impact these changes have on the company’s financial viability currently and in the future?
The increase in “Other assets” could indicate investments in new projects or acquisitions that may impact the company’s future financial viability positively. However, the decrease in “Other liabilities” may result from the repayment of debts, which may positively impact the company’s current financial viability.
In conclusion, Ascension Health is growing as indicated by the increase in their total assets and liquidity. The line items that reflected the largest-percentage increase and decrease were the “Other assets” and “Other liabilities” categories, respectively. These changes may positively impact the financial viability of the company in the future and currently.
Sources have been cited and referenced in APA format.