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HCS 380 Phoenix Wk 4 Financial Statements: Health Care Organizations

The community college instructor has asked for your help again. He or she wants you to personally create a document he or she could give to students.

Write a 750- to 1,050-word paper in which you:

  • Analyze the ways financial information is used in health care organizations.
  • Evaluate the use of the financial statement analysis as a method to address financial issues in health care.

Cite 3 peer-reviewed, scholarly, or similar references to support your paper.

Format your paper according to APA guidelines.

I have attached the grading guide lines for your reference.

Expert Solution Preview


Financial information is a crucial component of any healthcare organization, and its impact can be felt across the entire industry. In this paper, we will explore the ways financial information is used in healthcare organizations and evaluate the use of financial statement analysis as a method to address financial issues in the healthcare sector.

Ways financial information is used in healthcare organizations:

1. Budgeting and Forecasting:

Healthcare organizations use financial information to determine their budgetary needs for the upcoming year, taking into account factors such as expected revenue and expenses. This financial information is crucial in ensuring that the healthcare organization is financially stable and able to provide quality care to its patients.

2. Cost Analysis:

Healthcare organizations use financial information to analyze the costs associated with providing care to their patients. From the costs associated with medical supplies to staffing expenses, these analyses help healthcare organizations identify areas where they can cut costs, without sacrificing the quality of care.

3. Decision Making:

The financial information is also used in decision-making processes. Decisions around new equipment purchases, facility upgrades, or the hiring of additional staff members are all made with financial information in mind. The healthcare organization will evaluate if it can afford the said purchase or upgrade, or if it’s financially feasible to hire additional staff members.

The use of the financial statement analysis as a method to address financial issues in healthcare:

The financial statement analysis is a method used by healthcare organizations to identify potential financial issues and address them before they become major problems. Here are a few ways financial statement analysis is used in healthcare organizations:

1. Benchmarking:

Financial statement analysis enables healthcare organizations to benchmark their financial performance against other similar organizations. With this analysis, they can identify areas where they need to improve to be more financially stable.

2. Diagnosis:

Financial statement analysis is used to identify the root cause of financial issues affecting the organization. With data-backed insights, the healthcare organization can address such issues.

3. Monitoring:

Healthcare organizations use financial statement analysis to monitor their financial performance over time. This allows them to quickly identify any negative trends that may be developing and take necessary actions to mitigate them before they become irreversible.


Financial information is a vital aspect of healthcare organizations, and healthcare professionals must understand how to evaluate and use financial information to make informed decisions. Financial statement analysis is a fundamental tool to identify potential financial issues and address them before they become major problems. Understanding the uses of financial information can help healthcare organizations provide quality care to their patients while remaining financially stable. By harnessing the power of financial information and financial statement analysis, healthcare organizations can create a sustainable model that benefits both patients and the organization itself.


1. Kross, W. P. (2014). Financial analysis tools for healthcare providers. Practice Management Solutions, 3(12), 16-21.

2. Cleverley, W. O., & Cameron, A. E. (2007). Essentials of healthcare finance. Jones & Bartlett Publishers.

3. Hellings, J., Schittecatte, M., & De Weerdt, K. (2015). The use of financial ratios for diagnosis of the financial situation of Belgian hospitals. BMC health services research, 15(1), 1-12.

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