do have expense forecasts. Expense forecasting is one of the preeminent tools that financial managers can use to prepare their organizations for future fiscal turbulence. In this Assignment, you will examine a scenario and generate a corresponding expense forecast in Excel. Before pursuing an opportunity or making a major purchase, financial decision makers must first ascertain if the expenditures are justified. Determining whether a new process, system, or purchase will yield worthwhile returns is no easy task. However, managers have a variety of tools to help them decide whether the new expenditure is warranted. Analyzing a venture’s benefit/cost ratio, marginal profit and loss statement, and break-even points enable nurse managers to make educated decisions about how they choose to commit their funds.
Note: For those Assignments in this course that require you to perform calculations you must:Use the Excel spreadsheet template for the Week 3 assignment Show all your calculations and formulas in the spreadsheet. Answer any questions included with the problems (as text in the Excel spreadsheet).Expense Forecasting In this Application Assignment you calculate scenarios focusing on benefit/cost ratio analysis, marginal profit and loss statements, and break-even analysis. For these scenarios, you will utilize the provided figures to perform calculations and then make recommendations about the viability of the investment opportunities Expense Forecasting Scenario Your department has performed 20,000 procedures during the first six months (January–June) of 20X1. Spending during that period of time was $210,000 for fixed expense items and $1,200,000 for variable expense items. Of those amounts, $50,000 of fixed expense money was spent on preparing for a Joint Commission survey. Volume is anticipated to be 10% higher in the second half of the year. On November 1st, two new procedure technicians will begin work. The salary and fringe benefit costs for each are $96,000/year. Based on the information provided, prepare an expense forecast for 20X1. Annualization for Fixed: (Adjusted Total for Year to Date Expense/6) * 12 =Total Annualized Amounts Annualization for Variable (Adjusted Total for Year to Date Expense/ 20,000) * 40,000 =Total Annualized Amounts. Financial Analysis Cycle
Baker, J. J., Baker, R. W., & Dworkin, N. R. (2018). Health care finance: Basic tools for nonfinancial managers (5th ed.). Burlington, MA: Jones and Bartlett Learning. Chapter 14, “Trend Analysis, Common Sizing, and Forecasted Data” (pp. 149-160) The focus of this chapter is the use of trend analysis and forecasting to develop future budgets and make financial decisions about capital purchases, programs, and personnel. Chapter 15, “Using Comparative Data” (pp. 161-173) In this chapter, you are introduced to the criteria for identifying other health care organizations that are comparable to your own. Data from these organizations can then be used to evaluate your own organizational performance. Chapter 19, “Estimates, Benchmarking, and Other Measurement Tools” (pp. 223-231) In this chapter, you continue exploring the concept of financial benchmarking. The chapter focuses on the importance of benchmarking for identifying performance gaps.
Zelman, W., McCue, M., & Glick, N. (2009). Financial management of health care organizations: An introduction to fundamental tools, concepts, and applications (3rd ed.). Hoboken, NJ: Jossey-Bass. Retrieved from the Walden Library databases. Chapter 5, “Working Capital Management” (pp. 187–231) This chapter examines the concept of working capital. The authors explore the specifics of current assets and the management of the working capital cycle. Chapter 11, “Responsibility Accounting” (pp. 468–497) Review: This chapter explores the trend toward the decentralization of health care organizations and the challenges this presents. This chapter also describes responsibility centers, or organizational units intended to achieve specific tasks.]]>