Omega Health Foundation

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Table of Contents

The Principles of Finance
Net Income and Cash Flows
Market Value and Book Value of the Assets
Weaknesses and Strengths
Recommendations
Additional Information
References

The Principles of Finance

First of all, it is necessary to mention that the financial statement of Omega Health Foundation, as well as the financial principles, are based on the rules of successful financial management. Consequently, the combined financial statement is controlled by the entity of the financial management team, and follows the stated principles:

Omega Health Foundation (Foundation), a tax-exempt, nonprofit corporation, engaged in investment and fundraising activities for the benefit of its controlled entities
Omega Health System Services (OHSS), a tax-exempt, nonprofit entity engaged in providing management services to its controlled entities and subsidiary (Cleverley and Cameron, 2006)

Net Income and Cash Flows

Originally, net income is regarded to be the total revenue, after the firm has subtracted the expenses. Total revenues in 2008 concluded $172, 636, 000 while the total expenses totaled $171, 283, 000. Thus, the net income was $1, 352, 000. From this point of view, it is necessary to mention that the net income, in comparison with the total cash flow is rather tiny, however, it signifies the fact that the company spends essential sums for the development and increase of the proficiency level.

Market Value and Book Value of the Assets

The fact is that the market value of Omega Health Foundation can not differ much from the book value. It is stipulated by the fact that market value was used in the book, consequently, all the assets are real to the market, and used in the book for the explanation of the financial processes and the principles of financial management within the organization. Moreover, there is the strong necessity of evaluating the net income as well as the cash flow of the organization does not allow using unreal numbers. (Westerfield, 2004)

Weaknesses and Strengths

The most essential weakness in the financial system of Omega Health Foundation is the possibility of losses. Originally, these instances should be completely removed from the financial structure of any organization, nevertheless, they often appear to be inevitable. Still, $1, 367 notes a serious sum for such a large-scale organization with a massive financial structure.

The Strengths of the organization are the facts and features that help the OHF to grow and increase its net income. The most powerful strength of the organization is the properly adjusted financial structure and professional financial management team.

Recommendations

As for the recommendations, it should be stated that Omega Health Foundation does not require any. The fact is that everything is adjusted with the highest ever professionalism, consequently, all the unforeseen factors are not the demerits of the management system, but the factors, which the organization can not be insured against. However, In order to get protected, there is a strong necessity to have a financial margin.

Additional Information

It should be stated that with the increasing concern regarding health care costs, decision-makers are paying more attention to health care facilities. Originally, there are two ways that expenses may be featured: by cost or responsibility center, or by object or type of expenditure. In most general-purpose financial statements, costs are reported by cost object. OHF breaks down expenses into the following categories:

Salaries and wages
Fringe benefits
Professional fees
Supplies
Interest
Bad debt expense
Depreciation and amortization
Restructuring costs (Eastaugh, 2003).

References

Cleverley, W. O. Cameron, A. E. (2006) Essentials of health care finance. Jones & Bartlett Publishers.

Eastaugh, S. R. (2003). Health Care Finance: Economic Incentives and Productivity Enhancement. New York: Auburn House.

Westerfield, D. L. (2004). National Health Care: Law, Policy, Strategy. Westport, CT: Praeger Publishers.

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