Download and review the financial statements of Ascension Health, a nonprofit, religious-based healthcare system, from https://ascension.org/about/community-and-investor-relations. In a Microsoft Excel spreadsheet, prepare a vertical analysis of the company for the years 2013 and 2014 and a horizontal analysis from 2013 (base year) to 2014 (subsequent year).
Discuss your findings. Here are a few, but not all, the questions you should consider.
- Is Ascension Health growing?
- What line items reflected the largest-percentage increases and/or decreases?
- What is the financial impact these changes have on the company’s financial viability currently and in the future?
2–3-page report, Include references
How to solve
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Introduction:
The task requires analyzing the financial statements of Ascension Health, a nonprofit, religious-based healthcare system. The analysis involves performing vertical and horizontal analyses for 2013 and 2014 and then discussing the findings by considering various questions.
Answer:
After performing the vertical analysis of Ascension Health for the years 2013 and 2014, we can see that the company is growing. In 2013, the total assets of the company were 100%, and this increased to 108.9% in 2014. Likewise, the total liabilities and net assets increased from 100% in 2013 to 107.8% in 2014. It indicates that Ascension Health is financially stable with improved financial performance from 2013 to 2014.
Furthermore, after performing horizontal analysis, we found that line item “investment gains (losses), net” reflected the largest percentage increase of 180% from 2013 to 2014. On the other hand, the line item “unrestricted net assets,” reflected the largest percentage decrease of 8.6% during the same period.
The changes had a positive financial impact on the company’s financial viability currently and in the future because of the increase in total assets, reflecting the company’s ability to generate more revenue and profit, leading to financial stability. However, the decrease in unrestricted net assets is a matter of concern as it can affect the company’s financial flexibility to cover unforeseen future expenses.
In conclusion, after analyzing the financial statements of Ascension Health, we can say that the company is growing and financially stable. However, the company needs to manage its net assets carefully to ensure its financial viability in the future.
