Accounting for Healthcare Professionals

Super Simple Accounting for Healthcare Professionals.

3 Financial Statements Explained:

1. Balance Sheet: Similar to an individual's 'Net Worth.' It is a 'snapshot' in time.

The balance sheet takes into account Assets, Liabilities and Shareholders Equity (or Net Assets if a Non-Profit Organization).

Examples of Assets are Cash, Buildings, Accounts Receivable and Investments.
Examples of Liabilities are unpaid Expenses, Accounts Payable and Debt.

2. Income Statement: Similar to an individual's personal 'Budget.'

The income statement is Revenue minus Expenses equals Profit.

Another name for revenue is 'Sales.'
Sales minus Cost-of-Goods-Sold (C.O.G.S.) equals Gross Profit
Gross Profit minus Operating Expenses (Sales, General & Administrative, Research & Development) equals Operating Income.
Operating Income minus Non-Operating Expenses (interest payments on Debt) equals Pre-Tax Income.
Pre-Tax Income minus Taxes equals Net Income = Profit = Earnings

3. Cash Flow Statement: Similar to an individual's 'Checking Account.'

There are several categories of money coming in to and leaving out of a 'Checking Account' for an organization.

Operating Activities.
Investment Activities.
Financing Activities.

Video includes an example of how an Income Statement can be 'spun' to make a hospital look 'poorer' than it actually is.

Sources:

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[N.KikkeriMD-AffordableSurgery]

Thank you for this informative video, Great job-Nagaraj👍

[evanjames]

Thank you, I hear some of these terms all the time in meeting. I will rewatch again next to let the terms sink again.

[JamieT-shdj]

Would you be willing to create a video on Any Willing Provider laws?

[joewhite]

Hospitals do not show a COGS or SGA on lines on their Income statement. They just have operating expenses and non-operating expenses (interest expense). Most hospitals are struggling as inpatient revenue is shrinking and labor costs are increasing.

[brockg]

Have my subscription and like. That was well done and very helpful!

[JamieT-shdj]

Would you be willing to create a video on Any Willing Provider laws?

[GDPWorking]

Thank you. I am working in medical writing and starting an accounting degree. This is a good choice.

[rinasiuta]

Wow, you made it easy to understand. Thank you doctor👏🏽