This is Teach-a-Topic presentation project that identifies the components of a cashflow statement and also recognizes cash flows problems that require corrective actions to ensure the financial stability of a business entity.
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Cash flow analysis
1. Projecting Cash Flow Analysis for
Healthcare Systems.
Anthony Opoku
November 2017
2. Learning Objectives
• Audience will be able to identify the four
components of a cash flow statement in order
to be able to analyze and evaluate a firm’s
gross receipts and gross payments for a
specified period of time.
• Audience will be able to recognize when there
is a cash flow excess or deficit in order to take
corrective action during the business cycle.
3. Projecting Cash Flows- Snapshot
• What? Cash flow is the net amount of cash and
cash-equivalents moving into and out of a
business.
• Where/when is this used? Cash Flow Analysis
can be used by all types of businesses which
has financial responsibility, constraints and
concerns. It is used to determine the viability
and feasibility of a business project.
• Who needs? Financial and Business Analysts,
Project Managers, Hospital Administrators.
4. What is the benefit of knowing this?
• The main benefit of cash flow budgeting is
that it quickly points out any liquidity
problems in the future. It allows analysts to
evaluate the liquidity of a project.
• It can be used to determine when a hospital
will have excess cash, as a result can initiate
the use of cash to create additional revenue.
• The cash flow analysis will allow the health
administrator to anticipate periods of cash
shortage and take corrective actions..
5. Instruction Page
• A cash flow forecast can be developed in an
Excel spreadsheet or a project schedule
software.
• Cash flow statement is a statement (report) of
flows (both in and out of the business) of cash.
• Cash can flow in two directions – either coming
in to your business or going out. Cash coming
to the business is shown as positive amounts,
whereas cash going out from your business are
shown as negative amounts (in parentheses).
7. Instruction Page
• The first component is cash flows relating to
core operations - cash received from your
customers, cash paid to suppliers and
employees.
• The second section is cash flows from investing
activities - cash spent on computer equipment,
vehicles.
8. Instruction Page
• The third section shows the cash flow from
financing activities - cash received from
the owner, or from loans, repayment of a loans,
drawings.
• The fourth section, shows the net cash increase or
decrease for the period and the cash balance at the
beginning and end of the period.
• The closing balance of the bank account statement
should corresponds to the cash balance in the cash
flow statement.
9. Real-World Example #1
• Cash reserve is running short
for this public hospital… with
barley 18 days of cash on
hand.
• This health system faces a
$1.2 billion deficit in its $8
billion operating budget and
serves more than a million
New Yorkers each year
including 400,000 uninsured.
10. Real-World Example #2
• Cash flow management
has been a big issue for
academic health
systems in recent years.
A report by Moody's
Investors Service
concluded that cash
flow at hospitals has
been constricted by
rising expenses.
11. Learning Objectives’ Review
• Audience will be able to identify the four
components of a cash flow statement in order
to be able to analyze and evaluate a firm’s
gross receipts and gross payments for a
specified period of time.
• Audience will be able to recognize when there
is a cash flow excess or deficit in order to take
corrective action during the business cycle.
12. Thank you for watching!
• For more information, contact me via
LinkedIn:
• ANTHONY OPOKU
• http://www.linkedin.com/in/anthony-opoku
