Solution Manual for Financial Management for Public Health, and Not-for-Profit Organizations 7th Edition by Finkler, Calabrese & Smith Verified Chapters 1 - 15, Complete

Instructor’s Manual for Financial Management for Public, Health, and Not-for-Profit Organizations1,



) SOLUTIONS MANUAL for Financial Management for Public
Health, and Not-for-Profit Organizations 7th Edition by
Steven Finkler, Thad Calabrese, (Complete 15 Chapters

,Chapter 3: Additional Budgeting Concepts
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INTRODUCTION
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FINANCIALM q
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ANAGEMENT
Questions for Discussion wq wq




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1. Financial management is the subset of management that focuses on generating financial inform
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ationthat can improve decisions. The decisions are oriented toward achieving the various goals of
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the organization while maintaining a satisfactory financial situation. Financial management encomp
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assesthe broad areas of accounting and finance.
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1-2. In proprietary, or for-
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profit, organizations, an underlying goal is to maximize the wealth of the owners of the organizatio
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n.

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3. In public service organizations, decisions are oriented toward achieving the various goals of the
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organization while maintaining a satisfactory financial situation. wq wq wq wq wq wq




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4. Accounting is a system for keeping track of the financial status of an organization and the financ
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ial results of its activities. It has often been referred to as the language of business. The vocabulary
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used by accounting is the language of nonbusiness organizations as well.
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5. Accounting is subdivided into two major areas: managerial accounting and financial accounting.
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Managerial accounting relates to generating any financial information that managers can use to i
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mprove the future results of the organization. This includes techniques designed to generate any fi
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nancial data that might help managers make more effective decisions. Major aspects of managerial
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accounting relate to making financial plans for the organization, implementing those plans, and the
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nworking to ensure that the plans are achieved. Some examples of managerial accounting include
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preparing annual operating budgets, generating information for use in making major investment d
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ecisions, and providing the data needed to decide whether to buy or lease a major piece of equip
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ment. Financial accounting provides retrospective information. As events that have financial impli
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cations occur they are recorded by the financial accounting system. From time to time (usuallymont
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hly, quarterly, or annually), the recorded data are summarized and reported to interested users.Th
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e users include both internal managers and people outside the organization. Those outsiders inclu
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de those who have lent or might lend money to the organization (creditors), those who might sell t
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hings to the organization (called suppliers or vendors), and other interested parties. These interest
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ed parties may include those with a particular interest in public service organizations, such asregula
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tors, legislators, and citizens. Financial reports provide information on the financial status of the or
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, Instructor’s Manual for Financial Management for Public, Health, and Not-for-Profit Organizations1,
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ganization at a specific point in time, as well as reporting the past results of the organization‘s oper
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ations (i.e., how well it has done from a financial viewpoint).
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, Chapter 3: Additional Budgeting Concepts
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6. Finance focuses on the alternative sources and uses of the organization‘s financial resources. O
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btaining funds when needed from appropriate sources and the deployment of resources within th
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eorganization fall under this heading. In addition, finance involves the financial markets (such as st
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ock and bond markets) that provide a means to generating funds for organizations.
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7. Yes. Achieving the goals of the organization requires financial planning. Financial management p
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rovides information for managers to use in making their decisions. It helps managers by providing
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information on the likely financial impact of each proposed alternative. It also provides informatio
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n about financial stability, efficiency, and effectiveness.
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8. Clearly, we might expect some public service organizations that are proprietary, such as some h
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ospitals, to earn profits. But what about other public service organizations such as charities? Theys
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hould make a profit as well. Profits provide a safety margin against unexpected costs, provide reso
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urces to replace buildings and equipment, and to expand and improve services.
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1-9. Federal government (see text Figure 1-1)
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◼ Individual income taxes wq wq




◼ Social insurance taxes wq wq




◼ Corporate income tax wq wq




State and local government (see text Figure 1-4)
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◼ Sales and gross receipts tax wq wq wq wq




◼ Federal government wq




◼ Property taxes wq




◼ Individual income taxes wq wq




Health sector (see text Figure 1-6)wq wq wq wq wq




◼ Private insurance wq




◼ Medicare
◼ Medicaid
◼ Other government programs wq wq




Not-for-profit sector (see text) wq wq wq




◼ Private payments for goods and services wq wq wq wq wq




◼ Government payments for goods and services wq wq wq wq wq




◼ Donations

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10. Federal government spending exceeded $6 trillion in 2020 and state and local government spen
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dingwas more than $3 trillion in 2018. In contrast, the GDP was $21 trillion in 2020. For more up to
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date information, examine the statistical tables of the most recent Economic Report of the Presid
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ent, which is available online.
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