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Happy Hospital

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Happy Hospital Scenario
A quick overview of the Happy Hospital Scenario almost gives financial decisions makers a false sense of security especially after reading the first opening pages of the
Happy Valley Scenario. The text poses an interesting question (2006), “What should we do with all that money?” Upon review of some quick facts, Happy Hospital is reporting starting the New Year with 12.5 million in current assets, 4.3 million in current liabilities,
$800,000 in cash on hand with the remaining amount of the 12.5 million being in accounts receivables. The acquirement of all the financial facts and statements in the following scenario present an analysis of how financial decision makers must proceed..
Happy Hospital must begin to use budgets and performance reports to aid in the decision making. The budget is a tool that empowers Happy Hospital to financially plan and manage specific funds for spending and saving (HSBC, 2009). In other words, it is a plan of action of how Happy Hospital will proceed whereas in stark comparison, reports provide accurate and extremely critical feedback. These reports help understand what is currently occurring, what has occurred in the past and what to expect in the future as this information relates to trends and projections. The combination of these two critical components, budgets and reports will be key to knowing how to correctly utilize the 12.5 million in assets.
After quick review of the financial statements presented in the text for Happy
Hospital, Happy Hospital is coming off two (2) hard years. Solvency and profitability ratios reflect that not all is well within Happy Hospital. Happy Hospital took on longterm debt despite entering the year with no debt. Happy Hospital suspiciously has 12.5 million in assets whereas only having $800,000 in cash on hand. In other words, why this
Happy Hospital

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