Financial Reports and Decision Making

Financial Reports and Decision Making

Financial Reports and Decision Making. Imagine that you are the new CFO leading a conference call with hospital leaders to deal with a crisis. Recently, your hospital, community, and state have dealt with the COVID-19 pandemic and you need to assure the team that you have developed a risk management plan to deal with this or a similar crisis in the future. You will need to explain financial statement analysis, financial reporting requirements, and the use of financial information so the team understands where the financial crisis will impact the business’s bottom line and the need to have strong liquid assets. You should explain measures such as managing cash tightly and draw on all sources, including taking on additional debt, delaying payables, and discussing early payments with payers and governments. Identify immediate operational actions to reduce costs, rent, utilities, insurance, legal fees, and certain salaries to reduce operating expenses.

Why do financial statements become pivotal in decision-making?

A description of the financial challenges facing the hospital in the midst of the COVID-19 (or similar) crisis.
An explanation of financial statement analysis, financial reporting requirements, and use of financial information so the team understands where the financial crisis will impact the business’s bottom line.
An explanation of measures such as managing cash tightly and draw on all sources, including taking on additional debt, delaying payables, and discussing early payments with payers and governments.
Identify immediate operational actions to reduce costs, rent, utilities, insurance, legal fees, and certain salaries to reduce operating expenses.