? Assignment #1 ? Brandywine Homecare
HSA525 Student Version 201004 [1010 ? 01/10/10] Page 5 of 22
Brandywine Homecare, a not-for-profit business, had revenues of $12 million in 2007.
Expenses other than depreciation totaled 75 percent of revenues, and depreciation
expense was $1.5 million. All revenues were collected in cash during the year and all
expenses other than depreciation were paid in cash.
You are to write a 4-7 page report that answers the following:
1. Construct Brandywine?s 2007 income statement.
2. What were Brandywine?s 2007 net income, total profit margin, and cash flow?
3. Suppose the company changed its depreciation calculation procedures (still within
GAAP) such that its depreciation expense doubled. How would this change affect
Brandywine?s net income, total profit margin, and cash flow?
4. Explain the difference between cash and accrual accounting. Be sure to include a
discussion of the revenue recognition and matching principles.
5. Explain the difference between equity section of a not-for-profit business and an
The format of the report is to be as follows:
o Typed, double spaced, Times New Roman font (size 12), one inch margins on all
sides, APA format.
o Type the question followed by your answer to the question.
o In addition to the 4-7 pages required, a title page is to be included. The title page
is to contain the title of the assignment, your name, the instructor?s name, the
course title, and the date.
NOTE: You will be graded on the quality of your answers, the logic/organization of the
report, your language skills, and your writing skills.
The assignment will be graded using the following rubric:
? Apply fundamental financial management skills and knowledge to health care
? Identify the components of important financial statements ? income statement, balance
sheet, and statement of cash flows ? and explain how they relate both to each other and
to the underlying sources of data.
? Use technology and information resources to research issues in health financial
Additional information: Title Page- Health Financial Management
Dr. Merle Point-Johnson
Please include cites that includes actual web sites along with cites and quotes from text book “Healthcare Finance: An Introduction to accounting and Financial Management (4th edition) Chicago: AUPHA Press/ Health Addministration Press
Thanks in advance!