Analyzing Financial Statement Analysis

Financial statements are essential in measuring and assessing the real financial strength and position of a company. These financial statements provide quantifiable data for reports and help an individual to obtain an understanding of a company's forthcoming forecasts and risks (Weygandt et al., 2008). The purpose of this paper is to review the financial statement of Doctors Hospital in the two years 2013 and 2014 and analyze these financial statements and its financial well-being. In addition, the paper will outline the role played by advanced practice nurses in the financial welfare of the organization.

Implications of Economics for Advance Practice Nurses. The Role of the Advance Practice Nurses in the Financial Wellbeing of Healthcare Organizations

In general, very minimal studies have been undertaken in the United States regarding cost effectiveness and economic impact of primary care delivered by advanced practice nurses. Results from different research studies indicate that, on the basis of insurance claims that made comparisons between costs incurred on physicians against those of advanced nurse practitioners and the efficacy of retail clinics, lower costs are linked with primary care rendered by APNs (Naylor and Kurtzman, 2010). According to Hughes and O'Grady (2008), the prompt advancement and success of the advanced practice nurses movement has been well-defined as an unsettling innovation. This is owing to the fact that advanced practice nurses, in several forms and manners, render similar healthcare or even better healthcare compared to physicians, at a cost that is lower in a setting that is more convenient (Hughes and O'Grady, 2008). More so, advanced practice nurses generate quality and patient safety, better clinical performance and more satisfactory patient outcomes. Completely incorporating the contributions and expertise of all primary care practitioners and, precisely, the contributions of nurse practitioners is a significant guiding principle in the direction of attaining high-value health care (Naylor and Kurtzman, 2010).

Advanced Practice Nurses (APNs) play a significant role within the organization. The APNs have attained the level of tutelage, training, and expertise to carry out several of the primary-care responsibilities executed by physicians. APNs play a significant role in the financial well-being of the health care organization. This is owing to the fact that the patients obtain primary care from APNs with lower expenses and increase the level of satisfaction of the patients. The implication of this is that the health care organization benefits from the decreased expenses by having APNs provide primary care to patients compared to physicians. More so, the increase in patient satisfaction infers to the return of patients and also increase in outpatient and inpatient patients for the healthcare organization, resulting in greater revenue generated and profit attained (Nursing World, 2012).

The Significance of Financial Statements

The financial activities of any organization's business operations and dealings are reported in three basic financial statements. These statements include: income statement, balance sheet, and cash flow statements. To start with, the income statement is also referred to as the profit and loss statement and has great significance to the financial welfare and standing of an organization (Baker and Powell, 2005). This is for the reason that an income statement indicates the manner in which the organization has performed by revealing the amount of revenue generated, the expenses incurred and the profit or loss that is ensuing. Secondly, the balance sheet is also referred to as the statement of financial position. The financial statement is of importance as it offers a report regarding the assets of an organization, its liabilities as well as the equity of the organization. In essence, the balance sheet gives detailed information concerning the financial strength of the organization, the manner in which incomes were made use of, the valuation of property, plant and equipment as well as the cycles of receivables and payables (Baker and Powell, 2005).

The cash flow statement is the third financial statement reported by an organization and outlines the manner in which the cash entered and left the organization. The importance of the financial statement is that it functions as a record that points where the cash emanated from and where it went. More so, it is an important tool for planning with regard to the organization's long standing financial success (Walters, 2012). An important aspect is that this financial statement offers insight regarding the financial welfare of an organization compared to what income statements and balance sheets could not. For instance, the statement indicates that the management or owners of the organization are withdrawing excessive cash, an aspect that cannot be perceived in the income statement or balance sheet. In addition, it is indicative that the organization is running out of money, irrespective of whether it is profitable at that particular time or not (Walters, 2012).

Ratio Analysis

Financial ratio analysis makes it possible to examine the financial health of a company. The financial statements of a company provide limited understanding and knowledge into its performance. So as to attain a much stronger and richer insight of what takes place, there has to be a relevant basis of evaluation and appraisal. Not only are you able to analyze the financial performance of a company, but the ratios also make it possible to compare the performance of companies with their rival companies and also with benchmarks in the industry (Ross et al., 2013). The following table will outline the ratio analysis of Doctors Hospital for the years 2013 and 2014.