Briefing / How it works - understanding the financial position

When looking at the financial position of an NHS body, the current focus is on achieving control totals. However, the financial position is more complex than one single metric. Properly grasping the financial health of an organisation requires a review of the financial statements as a whole. If the financial position is not properly understood there is a risk that financial failure may not be identified until it is too late for action to be taken to rectify it.

This briefing sets out how the financial statements are put together and the financial targets NHS bodies are trying to meet. In particular, it looks at the importance of looking at movements in current asset and liability balances and what that might mean.