Happy Hospital Scenario

Happy Hospital Scenario

Darcy A. Desormiers

ACC/HC 561

Ruth E. Brown

Happy Hospital started out the fiscal year with a positive cash flow of $12.5 million in current assets and of that $800,000 is in cash value (Finkler & Ward, 2006). This is a good way to start off the year with an added bonus of being listed as a company that is exempt from paying income tax. After analyzing the budgets and prior year’s performance, even though they have not been stellar, this would be a good opportunity for Happy Hospital to start working on issues that have been affecting them over the past few years.

Investing in new technologies is a key issue that Happy Hospital needs to address in order to improve efficiency and help to reduce medial errors. Happy Hospital has decided to take out a long term loan in the amount of 1.5 million dollars. This is not a very good move because of the cash flow problems of the past few years. The purchase of a new electronic medical record system was a must that the company needed in order to stay competitive. Happy Hospital is also taking the opportunity to purchase a new piece of equipment and purchased inventory. The purchase of the equipment was more cost effective than that of a lease option.

Having good ethical behavior in business helps the business to become very successful. Bad ethical behavior can lead to many negative things within the company that affects every person tied into the company. Some business people do anything to earn money, even if it includes practicing unethical behavior. A good example of this would be Enron. Taking funds away from the company and “creating” a stock option that didn’t exist. The money that was moved to this “fund” was actually moved into hidden accounts that only certain people had any knowledge of its existence. The Sarbanes-Oxley Act of 2002 is an excellent example of ethics in accounting and finances. “Following the rash of reported financial statement frauds in 2001 and 2002,...