Question 1:
Using revenue and volume projection information provided in the case along with the data in Tables 1 through 3, prepare projected income statements for the next three years. The following additional forecast assumptions should also be considered:
a. Miscellaneous income increases 1.00% per year
b. Employee benefits are expected to be 13.30% of wages
c. Payroll tax expense will be 7.40% of wages
d. Rent expense will increase by 2.50% per year
e. Depreciation expense will increase 25% per year
f. Insurance is expected to remain at the same percentage of patient service revenues as it was in 2017 (carry to two decimal places)
g. The Practice expects to repay all debt outstanding at the end of 2017 at the end of January 2018. All interest expense relates to this debt. HINT: The Practice incurs one month of interest expense for 2018
h. Professional fees should remain constant at the 2017 rate
i. Miscellaneousoperating expenses are expected to increase by $8,000 per year over the next three years. This increase covers the added cost of electronic health record compliance under MACRA
j. All other expenses not specifically listed above should increase by the normal inflation rate of 2% per year.
Question 2:
Based on the historical income statements provided in Table 3 and forecasted income statements prepared in Question 1, complete a common sizeanalysis for all years and a horizontal trend analysis using 2015 as the base year. Examine the trends.
Question 3:
Draft a memo,in proper format and no longer than 2-pages single-spaced, to Dr. Carl providing your recommendations for his future and the future of the Practice. Discuss major findings and any changes in assumptions that would increase or decrease the doubt about the Practice's ability to continue.Discuss any ethical and/or social responsibility issues that arise from your recommendation and how Dr. Carl, current and future patients, and employees would be affected.
Question 4:
Prepare a minimum 2-page single-spaced reflection that discusses how the case helped in your understanding of the reimbursement challenges physicians face and the complexity of the healthcare industry, increased your ability to prepare a forecasted financial statement and analyze the financial position of an organization, and aided in your understanding that youneed to consider both monetary and nonmonetary concepts, and ethical issues and social responsibilities to defend a strategic decision. Be specific as to the knowledge gained. You should also discuss any other issues, concerns, strengths/weaknesses, learning outcomes you feel important. Be blunt.
Attachment:- Internal Medicine Associates.rar