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BUSINESS ADVISOR
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Liabilities. Liabilities comprise all the monetary obligations of
your hospital or surgery center. They can be short- (what
you're paying this month for electricity) or long-term (what you owe
the bank over the course of the next 5 years), but include what
you'd expect: accounts payable (all your bills), loans you owe on,
payroll pending, loan interest and the like.
For primer purposes, we won't get too in-depth here; it's more
important to be aware what your outgoings look like, and that other
legal and financial definitions may be involved. Hint: It shouldn't be
the same as your assets. That's because there's a third component,
also found on the right side of your balance sheet.
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Equity. Depending on the corporate structure, this can be called
one of several names, typically stockholders' or owners' equity.
Some even refer to it as the "book value" of the facility or business,
equal to assets minus the liabilities. In equation form:
Assets = Owners' Equity + Liabilities
You can also look at it this way:
Owners' Equity = Assets – Liabilities
That is, once you've subtracted your liabilities from your assets, the
figure that remains is the value of the business that the owners hold.
This figure lets you match up the left and right sides of the financial
statement — it's how you ensure the sheet is balanced.
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O U T PAT I E N T S U R G E R Y M A G A Z I N E O N L I N E | F E B R U A R Y 2013
