Questions and Answers of Fundamentals Of Financial Management 10th

Discuss how the health care industry’s share of GDP aff ects the overall economy. Is too much money being spent for health care? Can America continue to spend this amount (or more) without sacrifi
Build a pro forma for a much needed hospital capital project or for capital equipment. Be sure to spend the appropriate amount of time to validate the volumes. Finish the analysis with an internal
Review the items in exhibit 1.3, and determine which have the greatest opportunity for adjustments by the auditors. What can the fi nance staff do to reduce or eliminate audit adjustments? EXHIBIT
Discuss the five financial statement types. How are they specifically related? What elements of the financial statements are most important to the hospital’s operation?
Discuss the reasons why the six items most likely to receive an audit adjustment are so sensitive.Why should the health care organization spend so much time on each of these items?
Using the balance sheet and statement of operations in the chapter, calculate the three bond repayment ratios, and use it to determine the fi nancial condition of the health care organization. Table
Discuss the importance of the three-year strategic plan. How does it relate to the hospital’s future fi nancial health? If the hospital were not required to prepare such a plan, what impact would
Discuss the needs for hospitals to spend the time developing the fi ve-year strategic fi nancial plan. What benefi ts can be gained by the hospital. What would be the results if this plan were not
Gain access to one hospital’s balance sheet and statement of operations. [A good source is www.guidestar.org, where many 501(c)(3) hospital IRS 990s, which include these statements, are stored.]
Discuss the implications of the Medicare and Medicaid programs on the fi nancial outcomes of providers of care in the United States. Also discuss the changes in the clinical health of the US
Using the payer mix information in table 4.1, determine the changes in the hospital’s net revenue (up or down) if the RHMC percentages moved to the national averages. (Make broad dollar assumptions
Discuss why most managed care companies would rather reimburse hospitals on a per diem basis rather than using a discount from gross charges.
Discuss the pros and cons of having the patient registration department report to the fi nance division or the operating division. Determine to which it should report.
Review the OIG’s current work plan and determine actions the organization can take to minimize governmental penalties.
Review the entire depth and breadth of the revenue cycle in figure 5.1. Are there any elements that appear unnecessary or extraneous? Which elements take the most time for the organization? Which
Discuss the most important steps in the operating budget process. Why are these more important than other steps? What impacts do they have on the timeliness, eff ectiveness, and quality of the budget?
Discuss the most important steps in the capital budget process. Why are these more important than other steps? What impacts do they have on the timeliness, eff ectiveness, and quality of the budget?
Compare the different responsibilities of the accounting and finance departments, and determine if there are any responsibilities that can be eliminated or any that may need to be added.
Discuss the pros and cons of the top-down and bottom-up methods for establishing the operating budget. Which is better? Why?
Debate the issues relating to across-the-board labor cuts versus cuts predicated on labor standards. What are the pros and cons of each method? Which is preferable?
Discuss the role and functions of The Joint Commission. How do the standards they set aff ect the fi nances and operation of the hospital?
Develop a list of twenty capital budget requested items of your choosing. Apply a purchase price against each of them. Sort the list by highest to lowest price. See if this arbitrary list with
Compare the bottom-line financial results of using a fixed budget and a flexible budget if volumes(a) increase by 10 percent or(b) decrease by 10 percent.
Discuss the value of using microbased cost accounting in the hospital organization and the defi ciencies caused if cost accounting is not used or is used ineff ectively.
Compare the difference between an operating budget, a capital budget, and a cash budget.What are the primary elements in each budget?
Discuss the ways physicians and their practice behaviors affect the financial results of an operating budget and a capital budget.
Debate the differences between an alert-based decision-support management-accountability budgeting, monitoring, and reporting system and a standard reporting system that does not provide instant
Discuss the benefits to a health care organization of acquiring and using the ten necessary decision support tools.
List and quantify some of the benefi ts that could be derived from the acquisition of a clinical IT system. If possible, estimate the costs of these systems, and develop a return on investment (ROI),
Design an operating and capital budget package for the finance committee that would provide it with the most value-added information, allowing for its approval the first time.
Discuss the pros and cons of reporting contractual adjustments directly on the monthly fi nancial reports at the department level.
Determine at least ten key success factors (key financial indicators) to benchmark in any hospital.
Compare the benefi ts (as described in table 11.4) being received by a representative hospital in the community with the real amounts of the cost of uncompensated care being given by the
Pick one hospital area that is generally profi table (imaging, surgical services, cardiology), and develop a pro forma for a service expansion of your choice. Remember the importance of volumes in
Debate the need and usefulness of hospital and physician professional liability (malpractice) insurance in the United States. Does the need for the insurance add to or detract from the care that is
Discuss the future of health care fi nance. What do you think it will look like ten years from now? What do you want it to look like? How can you reconcile the diff erences, if any? Most important,
Weston Corporation just paid a dividend of $1.00 a share (it, Do = 51.00). The dividend is expected to grow 12% a year for the next 3 years and then at 5% a year thereafter. What is the expected
A stock is expected to pay a dividend of $2.75 at the end of the year (i.e., DI = $2.75), and it should continue to grow at a constant rate of 5% a year. If its required return is 15%, what is the
Currently, Forever Flowers Inc. has a capital structure consisting of 25% debt and 75% equity. Forever's debt currently has a 7% yield to maturity. The risk-free rate (rn) is 6%, and the market risk
The real risk-free rate is 2.05%. Inflation is expected to be 3.05% this year, 4.75% next year, and 2.3% thereafter. The maturity risk premium is estimated to be 0.05 X (t — 1)%, where t = number
Is it possible to construct a portfolio of real-world stocks that has a required return equal to the risk-free rate? Explain
How long will it take $300 to double if it earns the following rates? Compounding occurs once a year.a. 6%b. 13%c. 21%d. 100%
Corporation's 2018 sales were $5 million. Its 2013 sales were $2.5 million.At what rate have sales been growing?Suppose someone made this statement: "Sales doubled in 5 years. This represents a
You have just been hired as a financial analyst for Barrington Industries. Unfortunately, company headquarters (where all of the firm's records are kept) has been destroyed by are. So, your first job
Investors generally can make one vote for each share of stock they hold. TIAA-CREF is the largest institutional shareholder in the United States; therefore, it holds many shares and has more votes