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.
Instructions
You will prepare a 1st person transcript at least 5 minutes in length.
Topics to include in the transcript include:
- 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.
- Requirements
- Transcript Describes the financial challenges faced by a hospital amid the COVID-19 (or similar) crisis.
- Explains financial statement analysis, financial reporting requirements, and use of financial information so the team understands where the financial crisis will impact the bottom line of the business.
- Explains measures such as managing cash tightly and draws on all sources, including taking on additional debt, delaying payables, and discussing early payments with payers and governments.
- Identifies immediate operational actions to reduce costs, rent, utilities, insurance, legal fees, and certain salaries to reduce operating expenses.
- Transcript is at least 5 minutes in length via 1st person.
Expert Solution Preview
Introduction:
In the midst of the COVID-19 pandemic, hospitals are facing unprecedented challenges that require immediate attention and action. As the CFO leading this conference call, I will explain the financial challenges facing our hospital, describe financial statement analysis and reporting requirements, and provide information on measures we can take to manage our resources in order to reduce costs and mitigate risks.
Answer:
The COVID-19 pandemic has severely impacted hospitals across the country, including ours. Our finances have been hit hard due to decreased revenue from canceled elective surgeries and other services, as well as increased expenses for personal protective equipment (PPE) and other supplies. We need to have a risk management plan in place to deal with this crisis and any similar crisis in the future.
Financial statement analysis is crucial in understanding where the pandemic is impacting our bottom line. We need to analyze our financial statements regularly to identify trends, track expenses, and assess the impact of the pandemic on our finances. Financial reporting requirements must be adhered to so our financial statements are accurate and reliable.
Managing cash tightly and leveraging all available resources, including additional debt, delayed payables, and early payments from payers and governments, will help us stay afloat during this crisis. We need to prioritize our expenses and identify areas where we can reduce operating expenses immediately. This includes actions such as reducing costs for rent, utilities, insurance, legal fees, and certain salaries.
In order to mitigate the financial risks of the COVID-19 pandemic and ensure our hospital’s continued success, we must take immediate and decisive action. By carefully analyzing our financial statements, implementing measures to manage cash, and reducing operating expenses, we can weather this crisis and emerge even stronger.
