| Course | HS440 Finance for Health Care |
|---|---|
| Unit | Unit 2 |
| Paper type | Financial statement review |
| Length | About 620 words, 5 pages double-spaced |
| Format | APA 7 student paper |
| School | Purdue University Global |
| Program | BS in Health Science |
| Updated | October 2026 |
Free sample paper for HS440 Unit 2
Three Statements, Three Positions: A Unit 2 Financial Statement Review of a Composite Endoscopy Center's Year
[Student Name]
Purdue University Global
HS440: Finance for Health Care
Unit 2 Financial Statement Review
[Instructor Name]
[Date]
The center and every figure in its statements are composite; the finance texts and the study of hospital markups cited are real.
Statement of Operations
Gross charges: 19,788,000 dollars. Contractual adjustments and price concessions: 15,517,950, or 78.4 percent of charges. Net patient revenue: 4,270,050. Operating expenses: staffing 1,050,000; management and administration 420,000; supplies, drugs and reprocessing 977,760; rent 360,000; scope service contracts 290,000; depreciation 410,000; allocated hospital overhead 640,000; information technology and other 240,000. Total 4,387,760. Operating loss: 117,710.
Reading: the statement answers whether the center earned more than it spent on an accrual basis, meaning a procedure counts as revenue on the day it is done and supplies count as cost when used, even if no money has changed hands yet. That is why a center can show a loss and still produce cash, or the reverse. It did not, by about 2.8 percent of revenue. It also shows that gross charges say little: nearly four of every five charged dollars were never expected to be paid. Charges are a list price, and payment depends on contracts and public programs (Bai & Anderson, 2015).
Balance Sheet
Two year-ends side by side, prior year first.
Cash: 406,000 and 173,500. Patient accounts receivable, net: 498,000 and 612,000, up 22.9 percent. Supplies inventory: 60,000 and 64,500. Property and equipment, net: 1,840,000 and 2,030,000. Accounts payable and accrued expenses: 293,890 and 257,600. Advance from the parent hospital: 150,000 and 380,000.
Reading: the balance sheet answers what the center owns and owes at one moment. Cash fell by more than half, receivables grew much faster than revenue, and the center owes its parent hospital more than twice what it did. The center looks less able to pay its bills on its own than a year ago.
Statement of Cash Flows
Operating activities: net loss of 117,710, plus depreciation of 410,000, less the increase in receivables of 114,000, less the increase in inventory of 4,500, less the decrease in payables of 36,290. Cash from operations: 137,500. Investing activities: purchase of replacement colonoscopes, 600,000. Financing activities: increase in advance from the parent hospital, 230,000. Net change in cash: a decrease of 232,500.
The center lost money on paper yet produced 137,500 dollars of cash from operations, and it was a 600,000 dollar scope replacement, paid partly with the parent hospital's money, that drained its cash.
What Each Statement Answers
The statement of operations answers whether the center is covering its costs. The balance sheet answers what position the year left it in. The cash flow statement answers where the cash actually went, and here it shows two things the other statements hide. Depreciation, a noncash expense, makes the loss look worse than the cash picture. And the center is quietly relying on its parent to fund equipment, which a reader of the operating statement alone would never see (Pink & Song, 2020).
Questions for the Next Units
Why did revenue fall while cases rose? Why are receivables growing faster than revenue, and is the center collecting more slowly? Could the center have funded the scopes itself? A reader who saw only the operating statement would worry about a small loss; a reader who saw only the balance sheet would worry about cash; only the cash flow statement explains how the two are connected, through equipment bought partly on borrowed money. Each statement raises a question it cannot answer alone, which is why the course reads all three together (Cleverley & Cleverley, 2018).
References
Bai, G., & Anderson, G. F. (2015). Extreme markup: The fifty US hospitals with the highest charge-to-cost ratios. Health Affairs, 34(6), 922-928. https://doi.org/10.1377/hlthaff.2014.1414
Cleverley, W. O., & Cleverley, J. O. (2018). Essentials of health care finance (8th ed.). Jones & Bartlett Learning.
Pink, G. H., & Song, P. H. (2020). Gapenski's healthcare finance: An introduction to accounting and financial management (7th ed.). Health Administration Press.
Reading the HS 440 Unit 2 instructions
Unit 2 typically supplies condensed financial statements and asks you to explain what each shows and how they connect. Expect a review of a few pages. Marks reward accurate reading of each statement, correct use of terms such as net patient revenue, accrual and depreciation, and an explanation of how the statements link, especially how a loss can coexist with positive operating cash. Many sections reward a closing section that names questions for further analysis. Present figures in short blocks and explain each in words. Cite a finance text for definitions and, where useful, a source on the gap between charges and payments.
Inside the HS440 Unit 2 example
The review presents the statement of operations from gross charges to operating loss, then explains accrual accounting and what the large adjustment line means, citing research on hospital markups. The balance sheet follows with two year-ends side by side and a reading of the direction of change. The cash flow statement is laid out by operating, investing and financing activity; the highlighted sentence names what drained the cash. A section summarizes what each statement answers, citing a finance text, and shows how a reader of only one statement would be misled. A closing section lists questions for the next units: why revenue fell, why receivables grew and whether the center could fund its own equipment.
Where the points sit in the HS440 Unit 2 rubric
Statement reviews are graded mostly on accurate interpretation and on showing how the statements connect. Interpretation credit requires correct reading of each line and correct terms. Connection points go to explaining how depreciation and working capital make operating cash differ from net income, and how investing and financing explain the change in cash. Questions for further analysis earn credit when they follow from the numbers. Presentation covers clear figure blocks and plain explanations. Citations support definitions. A review that ends on what only the cash flow statement can show usually demonstrates the integrated reading the unit is designed to teach. Explaining one line in depth, such as the adjustment from charges to revenue, often earns more than touching every line briefly.
HS440 Unit 2 help: mistakes that cost points
The commonest slip is reading gross charges as revenue the center expects to collect. Another is treating the operating loss as a cash loss, missing depreciation and working capital. Some students summarize each statement separately and never connect them. Others report balance sheet levels without comparing years. Leaving out investing and financing activity hides where cash actually went. If your statements come from a different organization, perhaps a hospital's public filing or a clinic's annual report, share the condensed figures, and each statement can be read for what it alone reveals. Forgetting that the balance sheet is a snapshot while the other two statements cover a period is another common confusion.
Get an HS440 Unit 2 example written to your instructions
Send the statements your Unit 2 case supplies, or name a health care organization with public filings if the prompt asks for a real one, together with the assignment sheet and its rubric. Each statement is read for the question it answers, with changes computed and shown. The review arrives within 24-48h; there is no charge for a first request. The paper above is an original model document written by our desk, not a submitted student paper and not an official Purdue University Global document.
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HS440 Unit 2 questions, answered
Why does the income statement start from gross charges?
Because many health care statements show the reduction from list price to expected payment, and the review has to show where net revenue comes from. The sample reports gross charges once, then deducts contractual adjustments and price concessions, and every later figure uses net patient revenue. If your case begins at net revenue, the review starts there instead.
Should the review use real published statements?
Where the prompt asks for them, yes. A nonprofit hospital's yearly federal filing can be viewed by anyone, and larger systems commonly publish audited statements for their bondholders. A department or subsidiary rarely publishes its own, so HS440 cases at that level usually supply composite statements. The sample follows whichever the instructions require and cites the source and year for any real figures.
Where can I find a free HS440 Unit 2 sample paper?
You will find the complete Unit 2 review here, reading three financial statements of a composite endoscopy center.
How can a center lose money and still produce cash?
Depreciation reduces income without any cash leaving this year, and changes in receivables and payables shift cash timing, so operating cash can be positive while the operating statement shows a loss.
What does the advance from the parent hospital mean?
It is money the parent lent the center, here partly to buy scopes. It shows the center relied on its parent rather than its own cash to fund equipment.