Nurse-at home final project assignments

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            Nurse-at-Home, Part I

Nurse-at-Home is a for-profit company that provides long-term placement of nursing aides in private residences.

Download the December 31, 2003 and 2004 unadjusted trial balances for the company.

           

           

	Nurse-at-Home				Nurse-at-Home
	Unadjusted Trial Balance				Unadjusted Trial Balance
	31-Dec-03				31-Dec-04
		DEBIT	CREDIT
Current Assets:				Current Assets:		DEBIT	CREDIT
	Cash	$      35,000			Cash	$  50,000
	Allowance for Doubtful Accounts		$      10,000		Allowance for Doubtful Accounts		$  15,000
	Accounts Payable		50,000		Accounts Payable		50,000
	Income Taxes Payable		3,000		Income Taxes Payable		5,000
	Note Payable (Long Term) - Bank		25,000		Note Payable (Long Term) - Bank		20,000
	Bad Debt Expense	13,000			Bad Debt Expense	15,000
	Retained Earnings		25,000		Retained Earnings		47,000
	Marketing Expenses	85,000			Marketing Expenses	75,000
	Depreciation Expense	5,000			Depreciation Expense	6,000
	Salaries Expense	345,000			Salaries Expense	355,000
	Administrative Expenses	42,000			Administrative Expenses	35,000
	Prepaid Expenses	5,000			Prepaid Expenses	10,000
	Interest Expenses	3,000			Interest Expense	2,000
	Property, Plant and Equipment	70,000			Property, Plant and Equipment	75,000
	Accumulated Depreciation		5,000		Accumulated Depreciation		11,000
	Client Revenue		518,000		Client Revenue		530,000
	Accounts Receivable	75,000			Accounts Receivable	95,000
	Common Stock (10,000 shares -				Common Stock (10,000 shares -
	$1 par value - issued and outstanding)		10,000		$1 par value - issued and outstanding)		10,000
	Additional Paid-in-Capital		35,000		Additional Paid-in-Capital		35,000
	Income Taxes	3,000			Income Taxes	5,000
		$     681,000	$     681,000			$723,000	$723,000

Using the information in the unadjusted trial balances, create a Balance Sheet and Statement of Income for Nurse-at-Home as of      December 31, 2003 and 2004.

		Nurse-at-Home								Nurse-at-Home
		Balance Sheet								Statement of Income
	December 31,							For the Years Ended December 31,
ASSETS					2003	2004					2003	2004
								Revenues:
Current Assets:											$        -	$        -
					$        -	$        -
								Expenses:
											$        -	$        -
	Total Current Assets				$        -	$        -
Fixed Assets:
					$        -	$        -
	Less:
	Net Fixed Assets				$        -	$        -
									Total Expenses		$        -	$        -
Total Assets					$        -	$        -
								Net Income			$        -	$        -
LIABILITIES AND EQUITY					2003	2004
Current Liabilities:
					$        -	$        -
	Total Current Liabilities				$        -	$        -
Long-term Debt:
					$        -	$        -
Total Liabilities					$        -	$        -
Stockholders' Equity:
					$        -	$        -
	Current Net Income
	Total Equity				$        -	$        -
Total Liabilities and Equity					$        -	$        -

Discuss the financial condition of Nurse-at-Home. Has the company’s profitability increased or decreased from 2003 to 2004? If yes, how much and what components (i.e., revenues and/or expenses) caused the increase or decrease in net income?

Have the company's total assets increased or decreased from 2003 to 2004? What components of total assets caused the change?

Have the company's total liabilities increased or decreased from 2003 to 2004? What components of total liabilities caused the change?

Has the company's total equity changed from 2003 to 2004? What components of total equity caused the change?

Nurse-at-Home, Part II

Using the previously created Balance Sheets as of December 31, 2003 and 2004, and the Statement of Income for the year ended December 31, 2004; create a Statement of Cash Flow for Nurse-at-Home for the year ended December 31, 2004.

Nurse-at-Home Company
Statement of Cash Flow
For the Year Ended December 31, 2004
Cash Flows from Operating Activities:
	Net Income			$        -
	Adjustments:
	Net Cash from/to Operations			$        -
Cash Flows from/to Investing Activities:
				$        -
Cash Flow from/to Financing Activities:
				$        -
Net Increase (Decrease) in Cash				$        -
Cash, Beginning of Year
Cash, End of Year				$        -

Discuss the 2004 Statement of Cash Flow of Nurse-at-Home. Did the company’s cash position increase or decrease from 2003 to 2004? Did the company’s operating activities generate positive cash flow? If yes, which components of operating activities generated cash flow? Which area(s) utilized the company’s cash flow? How much? Why? Write answers in an MS Word document.

Nurse-at-Home, Part III

Use the Balance Sheet and Statement of Income created for Nurse-at-Home in Part I. Using Excel prepare a vertical analysis of the company for the years 2003 and 2004 and a horizontal analysis from 2003 (base year) to 2004 (subsequent year).

Discuss your findings. Here are a few, but not all, the questions you should consider.

·         Is the company growing?

·         What line items reflected the largest percentage increases and/or decreases?

·         Discuss the financial impact these changes have on the company's financial viability currently and in the future.

Nurse-at-Home, Part IV

Use the Balance Sheets and Statements of Income for Nurse-at-Home.

Prepare a ratio analysis of the company for the years 2003 and 2004, using at least one profitability, liquidity, capital structure, and activity ratio.

Discuss your findings. In what areas has the company improved? In what areas has the company's financial condition weakened? Why?

Explain your selection of ratios. Why did you choose these ratios?

Profitability ratio: <Enter the name of the ratio>

Data: <Enter the relevant data from the financial statements.>

Ratio: <Enter the value>

Interpretation: <Enter your evaluation of the company.>

Reasons for selecting this ratio: <Explain why you chose this ratio.>

Liquidity ratio: <Enter the name of the ratio>

Data: <Enter the relevant data from the financial statements.>

Ratio: <Enter the value>

Interpretation: <Enter your evaluation of the company.>

Reasons for selecting this ratio: <Explain why you chose this ratio.>

Capital structure ratio: <Enter the name of the ratio>

Data: <Enter the relevant data from the financial statements.>

Ratio: <Enter the value>

Interpretation: <Enter your evaluation of the company.>

Reasons for selecting this ratio: <Explain why you chose this ratio.>

Activity ratio: <Enter the name of the ratio>

Data: <Enter the relevant data from the financial statements.>

Ratio: <Enter the value>

I     nterpretation: <Enter your evaluation of the company.>

Reasons for selecting this ratio: <Explain why you chose this ratio.>

Assignment 3: Course Project—Nurse-at-Home, Part V

Variances

Use the following information for Nurse-at-Home, and answer the questions.

        

Year: 2004	Static Budget	Flexible Budget	Actual Budget
Revenues	$535,000	$540,000	$530,000
Expenses	$480,000	$480,000	$488,000
Profits	$55,000	$60,000	$42,000

            Calculate and interpret the profit variance.

            Calculate and interpret the revenue variance.

            Calculate and interpret the cost variance.

            Calculate and interpret the volume and price variances on the revenue side.

            Calculate and interpret the volume and management variances on the cost side.

             Discuss your overall findings for the operations of Nurse-at-Home for 2004.

            Nurse-at-Home, Part VI

The president of Nurse-at-Home is considering accepting Medicare patients next year. However, to do so she must begin to use RNs for client visits, which Medicare reimburses at $45 per visit. An RN costs $35 per hour versus the current cost of $15 for an LPN or nurses’ aide. The president believes she can increase her patient visits by 15% by accepting Medicare patients. She is also aware that if she begins accepting Medicare patients, the company’s administrative costs will increase by approximately $10,000 per year because of the claims file complexity.

Using the Statement of Income created for the year 2004 in Part I, what is the company’s current level of client visits (assuming each visit is equal to one hour of salary costs)? How many more visits will the company generate if it accepts Medicare patients? What would be the estimated profit or loss associated with the Medicare service line?

Would you recommend that Nurse-at-Home begin accepting Medicare patients? Why or why not?