Financial highlights

These metrics highlight a system under some financial strain—particularly in liquidity—but still generating positive margins supported by non‑operating income. Use them as benchmarks to explore how changes in payer mix, expenses or investment returns would affect performance.

Condensed balance sheet

The balance sheet (or statement of financial position) summarizes assets, liabilities and net assets at year end. Laurel Ridge saw significant growth in its asset base in FY 2024, financed primarily through increased long‑term debt.

Assets	FY2024 ($000s)	FY2023 ($000s)
Cash & Cash Equivalents	122,140	110,000
Short‑term Investments	48,000	53,000
Net Patient Accounts Receivable	147,000	112,000
Inventories	21,250	16,500
Total Current Assets	338,390	291,500
Long‑term Investments	225,000	190,000
Net Property & Equipment	457,000	380,000
Total Assets	1,020,390	861,500

Liabilities & Net Assets	FY2024 ($000s)	FY2023 ($000s)
Accounts Payable	117,000	97,000
Accrued Expenses	72,000	62,000
Notes Payable (Current)	38,500	32,500
Total Current Liabilities	227,500	191,500
Long‑term Debt	415,000	325,000
Total Liabilities	642,500	516,500
Net Assets	377,890	345,000
Total Liabilities & Net Assets	1,020,390	861,500

Assets grew 18% in FY 2024 due to capital additions and investment growth. Long‑term debt increased significantly to fund expansion projects, pushing the leverage ratio higher. Net assets increased modestly, reflecting retained earnings from net income and contributions.

Condensed statement of operations

The statement of operations (income statement) summarizes revenues and expenses during the fiscal year. It reveals whether Laurel Ridge generated a surplus from operations and how non‑operating items affect the bottom line.

Operating Results	FY2024 ($000s)	FY2023 ($000s)
Net Patient Service Revenue	651,000	615,000
Premium Revenue	76,000	74,000
Other Revenue	67,000	39,000
Total Operating Revenue	794,000	728,000
Salaries, Wages & Benefits	428,000	383,000
Supplies & Drugs	198,000	172,000
Purchased Services & Other	115,000	109,400
Depreciation & Amortization	28,000	22,000
Interest Expense	18,000	16,000
Total Operating Expenses	787,000	702,400
Operating Income	7,000	25,600
Non‑Operating Contributions & Investment Income	25,490	26,980
Net Income (Excess Revenue over Expenses)	32,490	52,580

Operating revenue grew 9% in FY 2024 but expenses rose 12%, compressing the operating margin to 0.9% on a full accrual basis. A strong investment portfolio and modest contributions lifted the overall net margin to 4.1% (rounded), though still slightly below peer medians. Note how the mix of revenues (patient, premium, other) and the cost structure drive operating results.

Condensed statement of cash flows

Cash flow information illuminates how Laurel Ridge funds its operations, investments and financing activities. The summary below highlights major cash inflows and outflows during FY 2024.

Cash Flows	FY2024 ($000s)
Net Cash from Operating Activities	25,250
Net Cash Used in Investing Activities	(109,760)
Net Cash from Financing Activities	96,650
Net Increase in Cash & Equivalents	12,140

Operating activities generated positive cash despite reduced net income, reflecting depreciation and working capital adjustments. Significant capital expenditures and investment purchases drove negative investing cash flow, while debt issuance and a bank loan provided strong financing inflows. The result was a modest increase in cash of $12.14 million, keeping liquidity stable.

Narrative & analysis

The FY 2024 financials present a nuanced picture of a growing nonprofit health system balancing mission and margin. Revenue increases were offset by wage inflation, supply costs and interest expense, compressing the operating margin. Investment gains and donations remain crucial to achieving a positive bottom line. The system’s leverage has increased to fund expansion, evidenced by a higher debt‑to‑equity ratio and more long‑term debt on the balance sheet. Days cash on hand improved modestly but remains below industry medians, highlighting the importance of disciplined liquidity management.

Use this information as a springboard for analysis. What happens if payer mix shifts further toward Medicaid? How would a downturn in investment markets affect net income and liquidity? How much debt capacity remains for future projects? These questions and more are explored throughout the Laurel Ridge case.

For the full audited statements, notes and supplemental graphs, download the FY 2024 Annual Financial Report included with the case materials.