ECO 605 Discussion 6.1: Sample Balance Sheet

ECO 605 Discussion 6.1: Sample Balance Sheet

Discussion 6.1: Sample Balance Sheet

The underlying reasons that drive the increase are the change in current assets, fixed assets, and the current liabilities and long-term liabilities. Net worth is total assets minus liabilities (Waxman, 2018) and in the latter year, the net worth of the company increased 3%.

The gross assets of the company increased 29% and the net assets increased 94%. In 2016, the company had less current assets and more bad debt. The amount of bad debt from 2016 to 2017 decreased 26%. Bad debt is when a receivable is no longer able to be collected because a customer is not able to pay (Waxman, 2018). In 2017, the company had more current assets and less bad debt. The amount of cash/investments the company had increased 40% from the previous year. The patient revenue (accounts receivable) increased 26% ($101,880) which means that more money was owed to the company from the patients and/or insurers (Waxman, 2018). The charitable allowance did not have a significant change between the two years.

Regarding fixed assets such as land, buildings, equipment, and construction, there were no major changes and depreciation did not play an impactful role in the balance sheet. The total fixed assets change in one year was 0.2% and the less accumulated depreciation decreased 9%. The 9% depreciation accounts for the value lost on the original purchase price of the company’s fixed assets (Waxman, 2018).

The current liabilities had a decrease of 22% from 2016 to 2017. The accounts payable salaries, supplies, and pharm liabilities increased the most, 32%. The accrued compensation and benefits, accrued liabilities, and current portion of long-term debt had little effect.

The long-term liabilities of the company include bonds payable and mortgage payable. The bonds payable increased $1000 and the mortgage payable increased $200. These increases did not drastically affect the net worth of the company.

The total liabilities were less than the total assets in both years however, the difference in 2017 was greater which means that 2017 had a higher net worth for the company.

Reference

Waxman, K.T. (2018). Financial and Business Management for the Doctor of Nursing Practice. Springer Publishing Company.