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Table 4 includes the 2018 budget for Jasper Gardens Nursing Home. For your monthly cash budget, assume that one-twelfth of cash expenses and revenues are incurred per month. Use the following aging analysis to estimate cash inflows. What are the management implications of this analysis?

Table III.4 Aging Analysis

Percent of Bills Paid in Cash Within days of Billing

Days	30 or less	3160	6190	91120	121150
Medicare	5	20	30	40	5
Medicaid	0	25	25	25	25
Commercial
Insurance	25	25	25	10	15
Private Insurance	30	30	30	10	0
Self-Pay	40	30	20	0	10
VA	25	15	10	45	5

Assume that Accounts Receivable Net as of December 31, 2017, are the same percentage as anticipated revenue to be earned during 2018.

Table 4:

Statement of Operations for the 12-Month Period Ending December 31, 20132017 and the 2018 Budget

	Statement of Operations
Revenue
2018 Budget		2017	2016	2015	2014	2013
	Room and board
	Skilled care
4,135,329	Medicare Part A	3,977,963	3,820,494	3,820,494	3,724,383	3,650,292
215,383	Commercial	202,582	225,230	210,494	236,191	190,393
	Intermediate care
3,816,373	Medicaid	4,156,604	4,198,356	4,145,291	3,953,282	3,640,439
1,745,292	Self-pay	1,325,988	1,839,202	1,820,394	2,134,203	2,340,203
97,292	VA	92,083	92,363	90,383	189,243	83,405
139,292	Private insurance	97,607	45,393	23,040	21,450	18,450
10,148,961	Total room and board	9,852,827	10,221,038	10,110,096	10,258,752	9,923,182
	Ancillary revenue
	Skilled care
834,282	Medicare Parts A and B	795,593	790,373	713,282	702,393	650,393
54,303	Commercial	38,675	39,294	60,393	50,383	47,293
	Intermediate care
18,373	Medicaid	19,547	14,292	13,258	16,393	18,363
0	Other	0	0	0	0	200
906,958	Total ancillary revenue	853,815	843,959	786,933	769,169	716,249
	Other revenue
21,494	Interest	18,417	13,292	15,202	16,729	18,560
3,200	Miscellaneous	3,683	3,125	5,403	6,230	3,720
24,694	Total other revenue	22,100	16,417	20,605	22,959	22,280
11,080,613	Total revenue	10,728,742	11,081,414	10,917,634	11,050,880	10,661,711
(315,230)	Less provider tax	(313,081)	(343,560)	(313,596)	(302,383)	342,474
(3,129,492)	Less ancillary conractual allowances	(3,057,067)	(3,100,867)	(2,948,202)	(3,000,272)	(2,947,353)
7,635,891	Total net revenue	7,358,594	7,636,987	7,655,836	7,748,225	8,056,832
Expenses
2018 Budget		2017	2016	2015	2014	2013
	Salaries
1,790,400	Nursing	1,789,393	1,800,249	1,840,292	1,934,929	1,997,239
560,304	Dietary	556,933	555,002	550,383	480,272	515,388
120,494	AncillaryPT	103,272	105,230	107,292	107,252	113,282
65,202	AncillaryOT	62,701	68,303	64,393	58,303	62,120
24,300	AncillaryST	22,130	20,130	25,303	27,393	25,303
145,892	AncillaryRT	140,155	130,202	120,303	127,303	136,303
108,202	Housekeeping	104,383	110,393	131,303	130,292	130,282
135,200	Administration	131,340	141,200	178,202	204,393	180,292
109,303	Social services	104,838	103,292	103,202	103,684	103,606
82,340	Recreation	79,362	80,350	78,383	74,902	78,393
75,300	Physician services	73,278	70,282	82,345	88,202	67,393
60,203	Laundry	58,964	68,002	78,393	88,303	98,303
60,392	Maintenance	55,282	65,303	62,010	60,292	61,202
3,337,532	Total salaries	3,282,031	3,317,938	3,421,804	3,485,520	3,569,106
1,134,761	Benefits, all	956,838	995,381	1,094,977	1,219,932	1,284,878
4,472,293	Total salaries and benefits	4,238,869	4,313,319	4,516,781	4,705,452	4,853,984
	Admin and general	CY	CY-1	CY-2	CY-3	CY-4
50,000	Accounting fees	60,000	60,000	70,000	80,000	80,000
30,200	Telephone	33,799	34,292	35,292	35,920	36,303
33,000	Insurancegeneral	30,319	29,200	29,500	34,290	40,202
17,500	Payroll services	18,228	18,200	18,400	16,393	16,300
16,200	MIS management	16,415	16,000	16,000	15,300	15,100
12,500	Dues and licenses	13,054	14,303	13,500	17,202	13,200
10,500	Office supplies	10,424	8,939	7,830	5,920	4,320
8,500	Postage	9,379	9,100	9,320	8,983	7,839
8,000	Legal	8,000	12,503	17,394	12,302	14,393
7,893	Auto	7,893	7,893	7,893	7,893	7,893
5,000	Advertising	6,000	6,000	5,780	5,500	4,000
2,000	Misc. bank charges	3,800	2,000	2,560	2,830	3,210
4,500	Admin equipment rental	4,785	5,640	5,500	4,950	4,640
5,000	Other professional fees	8,979	3,502	3,012	2,640	29,456
1,200	Printing and publishing	1,489	1,648	1,102	1,100	867
211,993	Total admin and general	232,564	229,220	243,083	251,223	277,723
	Other operating expenses
25,300	Maintenance supplies	24,010	22,310	22,740	21,640	20,765
60,383	Maintenance repairs	50,880	34,272	23,784	24,450	26,780
220,450	Utilitiesall	219,383	240,120	250,123	250,282	260,383
21,340	Oxygen services	20,175	18,393	17,202	14,383	18,303
277,500	Food	267,039	254,499	255,206	244,351	242,993
200,450	General supplies	202,364	190,303	183,484	178,202	178,202
31,500	Laboratory services	28,511	32,404	28,400	23,450	287,340
210,494	Pharmacy services	207,494	215,450	212,340	215,202	225,202
10,000	Imaging services	11,003	13,204	15,202	11,023	9,303
64,897	Medical equipment rental	64,897	64,897	64,897	60,200	60,200
920,000	Capital lease	900,000	900,000	900,000	900,000	900,000
200,400	Depreciationall	204,783	205,294	210,494	211,474	211,574
2,242,714	Total other	2,200,539	2,191,146	2,183,872	2,154,657	2,441,045
	Nonoperating expenses
650,000	Management fee	600,000	750,000	550,000	500,000	400,000
4,000	Bad debt	6,600	6,000	5,325	5,270	3,120
654,000	Total	606,600	756,000	555,325	505,270	403,120
7,581,000	Total expenses	7,278,572	7,489,685	7,499,061	7,616,602	7,975,872
7,635,891	Total net revenue	7,358,594	7,636,987	7,655,836	7,748,225	8,056,832
54,891	Pretax profit (loss)	80,022	147,302	156,775	131,623	80,960
19,212	All taxes	28,008	51,556	54,871	46,068	28,336
35,679	Profit (loss) after taxes	52,014	95,746	101,904	85,555	52,624

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