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Tools for Monitoring the Health Care Safety Net

Financial Risk Assessment Worksheet and Required Data

Instructions:

An outpatient safety net provider can use this worksheet to evaluate its financial risk relative to our sample of outpatient safety net providers. To complete it, acquire all the financial data shown in Table 1 and Table 2. Fill in each box with the information requested and do the calculations. If information is missing, either use an informed judgment as to the actual value or assume that the benchmark is met (i.e., the provider gets full points for that measure). If the resulting calculation yields more points than maximum in that category, only the maximum points are given.

To complete your financial risk assessment, you will need your Audited Financial Statement, including the Balance Sheet, the Income Statement, and the Statement of Cash Flow.

Name of Provider: Audit Period Ending
DD/MM/YYYY
Provider Address:

PART I LIQUIDITY (measures whether a provider can meet obligations over the short run)
CURRENT RATIO

Current Assets   
/   
  Current Liabilities
   = A
 
WORKING CAPITAL

Current Assets   
-   
  Current Liabilities
   = B
 
DEFENSIVE INTERVAL
 

  Cash   
+   
      Temporary       Investments
+   
    Net Patient     Account
    Receivables
  x 365
_______________________________________________________________  =C

  Total Expenses   
-   
      Bad Debt Expense
-
    Depreciation
    Expense
 

NOTE: This financial risk assessment model does not substitute for informed professional judgment. The model serves only as an indicator of risk and does not consider the full range of issues that can affect a provider's financial viability. The financial reviewer bears ultimate responsibility for evaluating risk, and the model is only one of many tools for making that determination.


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