B U S I N E S S P R O P O S A L 1learning Team Dst Judes Childre ✓ Solved

B u s i n e s s P r o p o s a l | 1 Learning Team D St. Jude’s Children’s Hospital HCS 380 April 29, 2019 Diana Schilling This study source was downloaded by from CourseHero.com on :51:18 GMT -05:00 Th is stu dy re so ur ce w as sh ar ed v ia C ou rs eH er o. co m B u s i n e s s P r o p o s a l | 2 St. Jude’s Children’s Hospital Saint Jude’s is a non-profit children’s hospital that is focused on cancer treatment and research, funded entirely by donations. This week, our team has taken some time to consider the state of St. Jude’s financial statements.

Some methods used for this analysis include basic accounting tools such as horizontal analysis and ratio analysis, including the current ratio, the dept to asset ratio, and the profit margin. In this document, the team will give their suggestions on organizational decisions for Saint Jude’s. Analysis Consolidated financial statements are financial statements of a group in which the assets, liabilities, equity, income, expenses, and cash flows of the parent company, and its subsidiaries are presented as those of a single economic entity. While preparing a consolidated financial statement, there are two basic procedures that need to be followed. The first one is to cancel out all the items that are accounted as an asset in one company and liability in another.

The second is to add together all uncancelled items. The two main items that cancel each other out from the consolidated statements of financial position are first, the investment in subsidiary companies, which is treated as an asset in the parent company will be cancelled out by “share capital†account in subsidiary statement. Only parent company’s “share capital†account will be included in the consolidated statement. Second, if trading between different companies in one group happens, then the payables of one company will be cancelled out by the receivables of another. This study source was downloaded by from CourseHero.com on :51:18 GMT -05:00 Th is stu dy re so ur ce w as sh ar ed v ia C ou rs eH er o. co m B u s i n e s s P r o p o s a l | 3 Financial Statement After examining St.

Jude’s financial statement, we have discovered that in 2017 they made a change in assets that gave them a profit of 2,000, where as in 2016 their change in assets were only 2,673. Upon further investigation, the reason that St. Jude has had such a change in net assets between 2016 and 2017 is because of the change in their Revenues. For instance, their Insurance Recoveries made them a profit of ,628 in the Fiscal year 2017. They also had research grants in the total ,431 dollars for the fiscal year 2017, where as they only had ,797 for the fiscal year 2016.

In 2017 St. Jude’s total expenses also increased by ,049. Out of all their expenses, their biggest funding increase went to their Patient Care Services. St. Jude spent 7,945 on Patient Care, where as in 2016 they only spent 9,040 dollars which means they had an increase of ,905 over the fiscal financial year between 2016 and 2017.

If St. Jude’s could find a way to lower their Expenses in the following years to come, they could potentially turn a bigger profit in future years. Recommendations According to Nonprofit World (2008) “Reduce paper weight whenever possible when printing and mailing. Paper can cost up to 30% of your printing job, so using inexpensive paper is a good way to stretch your budget. Using lower-weight paper will also reduce your postage costs.†(19).

For future purposes St. Jude’s hospital could use methods to lower their expenses, such as, cutting costs for unnecessary supplies. If they used paper billing, they could switch to electronic billing to cut paper supplies costs down. They could also reduce costs by not using This study source was downloaded by from CourseHero.com on :51:18 GMT -05:00 Th is stu dy re so ur ce w as sh ar ed v ia C ou rs eH er o. co m B u s i n e s s P r o p o s a l | 4 unnecessary items when treating a patient. These could help the company turn a bigger profit and help more people as a nonprofit organization.

Profit Margin St. Jude Hospital receives majority of its revenue from donations raised by American Lebanese Syrian Associated Charities (ALSAC). This organization was founded in 1957 with the main purpose to help raise funding that is needed to support and maintain the operation of St. Jude. Of all the donations that are raised by ALSAC, 75 percent of them goes to the hospital.

The other 25 percent of these donations goes to the functional fundraising expenses, which includes salaries, wages, benefits, mailing, company expenses, and travel. It costs St. Jude one billion dollars a year to operate the hospital and keep a reserve funding in case there is a shortage of donations. For every dollar donated to St. Jude, 0.82 cent of that goes to support patient care, and research.

The operation of financial reports for St. Jude’s is overseen by the board of directors, and governors all of St. Jude. ALSAC financial reports are completed and prepared according to the accounting principles (GAPP) and are audited annually by a public accountant. After that, they are publicly displayed as required by state, and federal regulations.

The gross margin is calculated as gross profit divided by revenue. St. Jude is considered a non- profit organization. In order to get the profit margin for 2016, and 2017 you must figure the organization’s expenses and loss from the company’s revenue. You will then get the profit, which is also called the net asset.

On St. Jude’s annual report, their net profit asset for 2016 was