Elijah Heart

Alternate Working Capital Policy For the Elijah Heart Center

FIN/HC571

Alternate Working Capital Policy for the Elijah Heart Center

The Elijah Heart Center is a hospital in New York that specializes in advanced coronary care. This paper will discuss the economic status of the Elijah Heart Center and review ways in which to enhance their standing. Currently the Elijah Heart Center is looking for different approaches to improve the flow of cash and cut cost. This paper will show different ways Elijah Heart Center makes improvements to increase the revenue of their everyday operations. There will be a reduction with the agency staff and addition to a shake up with the skill mix of the present members of staff who remain.

While speaking with chief financial officer Zachary Macholz, of the department of finance at the Elijah Heart Center (EHC) it is showing there is an increase in the patient volumes and revenues, and additionally, there is a decline in financial profit (University of Phoenix, 2011). Presently Elijah Heart Center is facing quite a few problems. The current problem that the organization is facing is a working capital shortfall. This signifies if a crisis was to occur EHC is not going to have the funds to run day the day business or pay the staff. A complete review of EHC financial records is showing the reason for the shortfall is to high wages for agency nurses, enormous discounts to managed care companies and low levels of reimbursements from Medicare (University of Phoenix, 2011).

History shows in the past EHC was depending on accounts receivable, and this strategy is the reason for the depletion of funds. According to investopeda.com accounts receivables is any services or goods that an individuals or corporations could receive and use prior to payment Accounts Receivable, 2011).

The organization has been depending on funds owed to EHC by patients for services, which he or she has received, and as a result the...