Foundation Paper

Omega Health Foundation Financial Review

Omega Health Foundation is a unique health care organization in that the company is nonprofit but has a taxable subsidiary. Omega Health is organized like this to take advantage of tax exemptions. The company has a taxable entity to enable the company to compensate employees well without close IRS securitization. Omega must make wise financial decisions and must adhere to very stringent regulations to maintain their tax exemption. They must also bring in more revenue than expenses if they want to continue in business. Based on Omega’s financial statements the company is financially unhealthy. This paper will elaborate on my aforementioned analysis and discuss possible solutions to strengthen the company’s financial position.

Finance Principles

Omega Health needs to understand their finances to be able to accurately and effectively manages financial decisions. OHF must interpret their financials in a way that will lead to effective decision-making. OHF needs to consider these factors in their decision-making processes: the financial condition of an entity, evaluating stewardship within an entity, assessing the efficiency of operations, assessing the effectiveness of operations and determining the compliance of operations with directives (Cleverly & Cameron, 2007). OHF must assess their financial position to realize its capacity to continue pursuing its goals. The company must look at its stewardship company-wide, this will help find possible fraud and likewise deter it. OHF must analyze company efficiency and realize any areas that may need to be reworked to help cut company costs. The organization must look at its operations and determine if these operations are in alignment with stated company goals. These will basic principles will all help OHF stay financially healthy and attain company goals.

Net Income and Cash Flows

Net Income is arguably the single most important measure of a company's profitability. Net...