Business of Radiology 101

Balance Sheet: Assets

Assets are divided into short-term or current assets and long-term assets, Current assets are those that can be converted into cash within 12 months. If it owns its own imaging equipment and facilities, a radiology practice's assets can be quite large. However, due to the semi-permanent nature and small market for MRI, CT, X-ray, or fluoroscopy equipment, these are considered long-term assets as they are not liquid assets and not readily convertible to cash. A practice's current assets usually include a modest amount of cash and inventories, and, more importantly, accounts receivable. In radiology, accounts receivable usually consists of bills issued to patients and payors (e.g. federal and private insurance companies) for services already rendered.

Long-term assets also include premises such as land or buildings. These are listed at their purchase price. Buildings are depreciated annually (discussed further under income statements). Because of this convention of using purchase price, this may represent an area of hidden assets, if the land or buildings in question increase in value.

				Period ending:		3/30/14					(all values represent 1,000's of $)
Total Assets					$ 5,000			Total Liability & Equity					$ 5,000
	Total Current Assets			$ 330					Total Liabilities			$ 3,450
		Cash		$ 50						Current Liabilities		$ 50
		Accounts Receivable		200							Accounts Payable	30
		Inventory		80							Accrued Liabilities	20
	Total Noncurrent Assets			4,670						Long-term Liabilities		3,400
		Net book value		3,420							Equipment Loans	2,000
			Scanners & Equipment	3,000							Building Mortgage	1,400
			Buildings	820
			Accumulated depreciation	- 400					Total Equity			1,550
		Land		1,250						Dr. Hamurabi's Equity		500
										Dr. Solomon's Equity, A		250
										Dr. Solomon's Equity, B		250
										Dr. Nebakanezer's Equity		500
										Retained Earnings		50