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Liquidity Ratios

Days cash on hand unaudited report

• 2009: $22,995/$1,168 = 19.68

• 2008: $41,851/ $1,130 = 37.04

Days cash on hand Audited report

• 2009: $22,995/ $1,269 = 18.12

• 2008: $41,851/ $1,130 = 37.04

Increased percentage of Days cash on hand from unaudited to audited is 7.93%

Days receivables unaudited report

• 2009: $459,900/$164 =$2,804

• 2008: $418,509/$103= $4,063

Days receivables audited report

• 2009: $459,900/ $161 = $2,856

• 2008: $418,509/ $103 = $4,063

Increased percentage of days receivables from unaudited to audited report is 1.82%
Consider the financial performance before the audit, and after the audit. What has changed and how significant is that change? What plans should the hospital Board make for next year and the next five years? • The changes that took place in the unaudited report and the audited report were that the days cash on hand as well the days receivables increased in 2009, but stayed the same in 2008. The increases are a contributing factor to the hospital becoming more profitable in the future as the years go by if they stay in that direction. The changes that were made between the report were slight changes due to the increases for days cash on hand only being a 7.9% increase and the days receivables being a 1.8% increase. • Planning for the next year and next five years the hospital should plan to increase the percentage by a specific amount each year to reach a budget of annual profit the company is trying to generate. By forecasting the annual revenue and where he board feels they should be they can set up goal markers on percentage increases the hospital much make each year to reach it.

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