Statement of Retained Earnings [Shareholder’s Equity]

Posted on March 20, 2008 by Dr. David Edward Marcinko MBA MEd CMP™

Financial Statement Review for Physicians

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Dr. David Edward Marcinko; MBA, CMP™

[Publisher-in-Chief]DEM Thinking

The Statement of Retained Earnings or Shareholder’s Equity [Statement of Changes in Unrestricted Net Assets] is only one of four financial statements. 

The four consolidated financial statements are:  

  1. Balance sheet,
  2. Net-income statement,
  3. Cash flow statement, and
  4. Statement of retained earnings. 

The Statement of Shareholder’s Equity is the newest statement that lists changes that occurred the previous year.  

The major elements of stockholders’ equity include capital stock, paid-in capital, retained earnings, treasury stock, unrealized loss on long-term investments, and foreign currency translation gains and losses. 

Assessment 

Shareholders equity sometimes called capital or net worth. It represents money that would be left if a company sold all of its assets and paid off all of its liabilities.  

This leftover money belongs to the shareholders or the owners of the hospital, clinic, practice or other healthcare entity. 

Conclusion 

And so, do you understand and review your financial statements regularly; why or why not?

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Statement of Cash Flows [SCFs]

Posted on March 20, 2008 by Dr. David Edward Marcinko MBA MEd CMP™

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Financial Statement Review for Physicians

Dr. David Edward Marcinko; MBA, CMP™

[Publisher-in-Chief ]

Did you know that the Statement of Cash Flows [SCFs] is only one of four financial statements? Yep; it is true. 

 

The four consolidated statements are: 

  1. Balance sheet,
  2. Net-income statement,
  3. Cash flow statement and,
  4. Statement of retained earnings. 

The SCF summarizes the affects of a medical practice or health entity on cash balances and/or liquidity from these three activities:

  • Operating activities: Including cash inflows (ARs, receipts, donations, accrued expenses, interest, and dividends) and outflows (inventory, prepaids, supplies, and loans) – this is where the majority of hospitals or medical practices generate most of their revenues from patient services and to a lesser degree from grants or other contributions, etc; 
  • Investing activities: Including the disposal or acquisition of non-current assets, such as equipment, loans or marketable securities; and,
  • Financial activities:  Generally including the cash inflow or outflow effects of transactions and other events, such as issuing capital stock or notes involving creditors, owners, or shareholders. 

Assessment 

Prior to 1988, the formal SCF was known as a Statement of Changes in Financial Position and projected estimated cash flows by month, quarter, and year, along with the anticipated timing of cash receipts and disbursements.  

Conclusion

Your thoughts and comments on this ME-P are appreciated. Feel free to review our top-left column, and top-right sidebar materials, links, urls and related websites, too. Then, subscribe to the ME-P. It is fast, free and secure.

Speaker: If you need a moderator or speaker for an upcoming event, Dr. David E. Marcinko; MBA – Publisher-in-Chief of the Medical Executive-Post – is available for seminar or speaking engagements. Contact: MarcinkoAdvisors@msn.com

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