Assessment #1: Understanding an Income Statement
You are an intern in a health care organization business office. Use the Dehew Health System income statement in the attachment, please develop a 4-6 page paper responding to the following questions regarding the income statement: (The income statement is attached)
1. What is an income statement used for?
2. What are the key components of an income statement?
3. On your example of an income statement, is the organization making a profit or loss? How much is that profit or loss? Show the calculations. (Total Revenues – Total Expenses = Net Profit/Loss)
4. On your example of an income statement, what is the “total contribution margin”? Show the calculations. (Net Sales – Total Variable Costs=Total Contribution Margin). You can use the assumption that volume is 15,000 if not included in financial statements.
5. What three financial indicators does a contribution margin help determine? How?
6. What is a break-even analysis? What is the break-even point for this organization? List expenses assigned as variable and fixed. Show the calculations. (Total revenues – Total VC – Total FC= Profit)
7. How does a break-even analysis vary between fee-for-service and capitated payments? Explain it using the income statement you chose. What are the similarities and differences applicable to the Income statements in fee-for-service and capitated payment options?
The paper should not be more than 6 pages and should follow APA format, spelling and grammar. Include a cover page and reference page (not included in the page count). Make sure to properly cite and reference all the used sources. The calculations need to be shown as formulas using figures. Follow the mathematical rules while calculating numbers.
Income Statement Below – For some reason I can’t attach the document.
Dehew Healthcare System
(Sample Organization)
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