Module Assignemnt
Overview Notes to the Financial Statements
Module goes into further depth about the three key financial statements: Balance Sheet, Income Statement and Statement of Cash Flows. We also look at the notes to the financial statements and see how they are used to tell the picture of the financial position of the organization.
The learning objectives for this module are:
1- Understand the use of each financial statement.
2- Understand the connection between the financial statements.
3- Determine how the notes to the financial statements add additional information to understand why information has changed.
4- Understand how tools like ratio analysis can provide meaningful information about the relationships of the numbers.
Open Stanford Hospital's Consolidated Financial Statements for August 31, 2017 and 2016:
1- Review the statements and answer the following questions:
a. Who are the independent auditors?
b. What type of opinion was rendered for these statements?
c. On the balance sheet, what does (in thousands of dollars) mean after the title?
d. On the balance sheet, what is the difference in cash and cash equivalents from 2016 to 2017?
e. On the balance sheet, what is the amount of the allowance for doubtful accounts in 2017?
f. On the balance sheet, what is the value of current liabilities in 2017?
g. On the balance sheet, how much in donations is permanently restricted in 2017?
h. On the statement of operations, what are the total operating revenues for 2017?
i. On the statement of operations, what was the total net income or loss for 2017? (Hint sometimes called the excess of revenues over expenses? How did this compare to 2016?
j. On the statement of operations, what are the total operating expenses for 2017?
k. In the statement of cash flows, how much cash flow from operating activities occurred in 2017?
In the Notes to the Financial Statements, please review the Summary of Significant Accounting principles for the following answers:
l. What valuation method is used for inventories?
m. What depreciation method is used for Property and Equipment?
n. What is the useful life used for Land Improvements?
o. What is Net Patient Service Revenue estimate reported at?
Look at the Q4 2016 Financial Statements:
Answer the following questions:
a. There is no auditor's report on this statement and the numbers for 2016 are titled "Unaudited". What is the reason for this?
b. On the balance sheet, what is the cash and cash equivalents balance for 2016?
c. On the balance sheet, what is the total of net assets for 2016?
d. On the statement of operations. What is the excess of revenues over expenses for 2016? How does that compare to 2015?
e. In the statement of cash flows, cash flows from investing activities went down in 2016 compared to 2015? By looking at this statement, what do you think contributed to the biggest change?
f. In the statement of cash flows, there is a $(50,833,000) change in cash flows from operating activities called "Fair market value adjustment 3/1/16". When the statements are audited, which footnote will we find the explanation for this change? If you need to, refer to the Stanford Financials to see where this is described.
g. It is difficult looking at unaudited financial statements to ascertain why the numbers have changed. Please describe how the Notes to the Financial Statements aid in understanding how the numbers are presented.
Attachment:- Module-Overview.rar