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

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Solution Manual
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for Financial Management for Public Health, and Not-for-Profit
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f4 Organizations 7th Edition by Finkler, Calabrese & Smith Verified
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f4Chapters 1 - 15, Complete
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, Chapter1: INTRODUCTION TO FINANCIAL MANAGEMENT f4 f4 f4 f4 f4




Questions for Discussion f4 f4




1-1. Financial management is the subset of management that focuses on generating financial information that
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can improve decisions. The decisions are oriented toward achieving the various goals of the organization
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while maintaining a satisfactory financial situation. Financial management encompasses the broad areas of
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accounting and finance.
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1-2. In proprietary, or for-profit, organizations, an underlying goal is to maximize the wealth of the owners of
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the organization.
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1-3. 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.
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1-4. Accounting is a system for keeping track of the financial status of an organization and the financial
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results of its activities. It has often been referred to as the language of business. The vocabulary used by
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accounting is the language of nonbusiness organizations as well.
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1-5. 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 improve
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the future results of the organization. This includes techniques designed to generate any financial data that
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might help managers make more effective decisions. Major aspects of managerial accounting relate to
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making financial plans for the organization, implementing those plans, and then working to ensure that the
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plans are achieved. Some examples of managerial accounting include preparing annual operating budgets,
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generating information for use in making major investment decisions, and providing the data needed to
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decide whether to buy or lease a major piece of equipment. Financial accounting provides retrospective
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information. As events that have financial implications occur they are recorded by the financial accounting
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system. From time to time (usually monthly, quarterly, or annually), the recorded data are summarized and
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reported to interested users. The users include both internal managers and people outside the organization.
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Those outsiders include those who have lent or might lend money to the organization (creditors), those who
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might sell things to the organization (called suppliers or vendors), and other interested parties. These
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interested parties may include those with a particular interest in public service organizations, such as
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regulators, legislators, and citizens. Financial reports provide information on the financial status of the
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organization at a specific point in time, as well as reporting the past results of the organization‗s operations
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(i.e., how well it has done from a financial viewpoint).
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1-6. Finance focuses on the alternative sources and uses of the organization‗s financial resources.
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Obtaining funds when needed from appropriate sources and the deployment of resources within the
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organization fall under this heading. In addition, finance involves the financial markets (such as stock and
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,bond markets) that provide a means to generating funds for organizations.
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, 1-7. Yes. Achieving the goals of the organization requires financial planning. Financial management
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provides 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 information about
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financial stability, efficiency, and effectiveness.
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1-8. Clearly, we might expect some public service organizations that are proprietary, such as some hospitals,
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to earn profits. But what about other public service organizations such as charities? They should make a profit
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as well. Profits provide a safety margin against unexpected costs, provide resources to replace buildings and
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equipment, and to expand and improve services.
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1-9.Federal government (see text Figure1-1)
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f4 Individual income taxes f4 f4




Social insurance taxes f4 f4




f4 Corporate income tax f4 f4




State andlocal government(see text Figure1-4)
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f4 Sales and gross receipts taxf4 f4 f4 f4




Federal government f4




f4 Property taxes f4




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Health sector(see text Figure1-6)
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f4 Private insurance f4




f4 Medicare

Medicaid

Other government programs f4 f4




Not-for-profit sector (see text) f4 f4 f4




Private payments for goods and services f4 f4 f4 f4 f4




f4 Government payments forgoodsand services f4 f4 f4 f4 f4




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