RRRR
SolutionManual .,
for Financial Management for Public Health, and Not-for-Profit
., ., ., ., ., ., .,
., Organizations 7th Edition by Finkler, Calabrese & Smith Verified
., ., ., ., ., ., ., .,
., Chapters 1 - 15, Complete
., ., ., .,
, Chapter1: INTRODUCTION TOFINANCIAL MANAGEMENT ., ., ., ., .,
Questions for Discussion ., .,
1-1. Financial management is the subset of management that focuses on generating financial information that
., ., ., ., ., ., ., ., ., ., ., ., ., .,
can improve decisions. The decisions are oriented toward achieving the various goals of the organization
., ., ., ., ., ., ., ., ., ., ., ., ., ., .,
while maintaininga satisfactoryfinancial situation.Financial management encompasses the broad areas of
., ., ., ., ., ., ., ., ., ., ., ., .,
accounting and finance.
., ., .,
1-2. In proprietary, or for-profit, organizations, an underlyinggoal is to maximize the wealth of the owners of
., ., ., ., ., ., ., ., ., ., ., ., ., ., ., ., .,
the organization.
., .,
1-3. In public service organizations, decisions are orientedtoward achievingthe various goals ofthe
., ., ., ., ., ., ., ., ., ., ., ., ., .,
organization while maintaining a satisfactory financial situation.
., ., ., ., ., ., .,
1-4. Accounting is a system for keeping track of the financial status of an organization and the financial
., ., ., ., ., ., ., ., ., ., ., ., ., ., ., ., .,
results of its activities. It has often been referred to as the language of business. The vocabulary used by
., ., ., ., ., ., ., ., ., ., ., ., ., ., ., ., ., ., .,
accounting is the language of nonbusiness organizations as well.
., ., ., ., ., ., ., ., .,
1-5. Accounting is subdivided into two major areas: managerial accounting and financial accounting.
., ., ., ., ., ., ., ., ., ., ., .,
Managerial accounting relates to generating any financial information that managers can use to improve the
., ., ., ., ., ., ., ., ., ., ., ., ., ., .,
future results of the organization. Thisincludes techniques designed to generate any financial data that might
., ., ., ., ., ., ., ., ., ., ., ., ., ., ., .,
help managers make more effective decisions. Major aspects of managerial accounting relate to making
., ., ., ., ., ., ., ., ., ., ., ., ., .,
financial plans for the organization, implementing those plans, and then working to ensure that the plans are
., ., ., ., ., ., ., ., ., ., ., ., ., ., ., ., .,
achieved. Some examples of managerial accounting include preparing annual operating budgets, generating
., ., ., ., ., ., ., ., ., ., ., .,
information for use in making major investment decisions, and providing the data needed to decide whether
., ., ., ., ., ., ., ., ., ., ., ., ., ., ., .,
to buy or lease a major piece of equipment. Financial accounting provides retrospective information. As
., ., ., ., ., ., ., ., ., ., ., ., ., ., .,
events that have financial implications occur they are recorded by the financial accounting system. From time
., ., ., ., ., ., ., ., ., ., ., ., ., ., ., .,
to time (usually monthly, quarterly, or annually), the recorded data are summarized and reported to interested
., ., ., ., ., ., ., ., ., ., ., ., ., ., ., .,
users. The users include both internal managers and people outside the organization. Those outsiders include
., ., ., ., ., ., ., ., ., ., ., ., ., ., .,
those who have lent or might lend money to the organization (creditors), those who might sell things to the
., ., ., ., ., ., ., ., ., ., ., ., ., ., ., ., ., ., .,
organization (called suppliers or vendors), and other interested parties. These interested parties may include
., ., ., ., ., ., ., ., ., ., ., ., ., .,
those with a particular interest in public service organizations, such as regulators, legislators, and citizens.
., ., ., ., ., ., ., ., ., ., ., ., ., ., .,
Financial reports provide information on the financial status of the organization at a specific point in time, as
., ., ., ., ., ., ., ., ., ., ., ., ., ., ., ., ., .,
well as reporting the past results of the organization‗s operations (i.e., how well it has done from a financial
., ., ., ., ., ., ., ., ., ., ., ., ., ., ., ., ., ., .,
viewpoint).
.,
1-6. Finance focuses on the alternative sources and uses of the organization‗s financial resources. Obtaining
., ., ., ., ., ., ., ., ., ., ., ., ., .,
funds when needed from appropriate sources and the deployment of resources within the organization fall
., ., ., ., ., ., ., ., ., ., ., ., ., ., .,
under thisheading. In addition,finance involves the financial markets (such as stock and
., ., ., ., ., ., ., ., ., ., ., ., ., .,
1 |P a g e ., ., ., ., .,
,bond markets) that provide a means to generating funds for organizations.
., ., ., ., ., ., ., ., ., .,
2 |P a g e
., ., ., ., .,
, 1-7. Yes. Achieving the goals of the organization requires financial planning. Financial management
., ., ., ., ., ., ., ., ., ., ., .,
provides information for managers to use in making their decisions. It helps managers by providing
., ., ., ., ., ., ., ., ., ., ., ., ., ., .,
information on thelikelyfinancial impact of each proposed alternative. It also provides information about
., ., ., ., ., ., ., ., ., ., ., ., ., ., .,
financial stability, efficiency, and effectiveness.
., ., ., ., .,
1-8. Clearly, we might expect some public service organizations that are proprietary, such as some hospitals, to
., ., ., ., ., ., ., ., ., ., ., ., ., ., ., .,
earn profits. But what about other public service organizations such as charities?They should make a profit as
., ., ., ., ., ., ., ., ., ., ., ., ., ., ., ., ., .,
well. Profits provide a safety margin against unexpected costs, provide resources to replace buildings and
., ., ., ., ., ., ., ., ., ., ., ., ., ., .,
equipment, and to expand and improve services.
., ., ., ., ., ., .,
1-9.Federalgovernment(seetextFigure1-1)
., ., ., ., ., .,
., Individual income taxes ., .,
Social insurancetaxes ., .,
Corporateincome tax
., ., .,
Stateandlocal government(seetext Figure1-4)
., ., ., ., ., ., .,
., Sales and gross receipts tax ., ., ., .,
Federalgovernment .,
., Property taxes .,
., Individualincometaxes ., .,
Healthsector(seetextFigure1-6)., ., ., ., .,
., Private insurance .,
., Medicare
Medicaid
Othergovernmentprograms ., .,
Not-for-profit sector(see text) ., ., .,
Private payments for goods and services ., ., ., ., .,
., Governmentpaymentsforgoodsandservices ., ., ., ., .,
3 |P a g e
., ., ., ., .,
SolutionManual .,
for Financial Management for Public Health, and Not-for-Profit
., ., ., ., ., ., .,
., Organizations 7th Edition by Finkler, Calabrese & Smith Verified
., ., ., ., ., ., ., .,
., Chapters 1 - 15, Complete
., ., ., .,
, Chapter1: INTRODUCTION TOFINANCIAL MANAGEMENT ., ., ., ., .,
Questions for Discussion ., .,
1-1. Financial management is the subset of management that focuses on generating financial information that
., ., ., ., ., ., ., ., ., ., ., ., ., .,
can improve decisions. The decisions are oriented toward achieving the various goals of the organization
., ., ., ., ., ., ., ., ., ., ., ., ., ., .,
while maintaininga satisfactoryfinancial situation.Financial management encompasses the broad areas of
., ., ., ., ., ., ., ., ., ., ., ., .,
accounting and finance.
., ., .,
1-2. In proprietary, or for-profit, organizations, an underlyinggoal is to maximize the wealth of the owners of
., ., ., ., ., ., ., ., ., ., ., ., ., ., ., ., .,
the organization.
., .,
1-3. In public service organizations, decisions are orientedtoward achievingthe various goals ofthe
., ., ., ., ., ., ., ., ., ., ., ., ., .,
organization while maintaining a satisfactory financial situation.
., ., ., ., ., ., .,
1-4. Accounting is a system for keeping track of the financial status of an organization and the financial
., ., ., ., ., ., ., ., ., ., ., ., ., ., ., ., .,
results of its activities. It has often been referred to as the language of business. The vocabulary used by
., ., ., ., ., ., ., ., ., ., ., ., ., ., ., ., ., ., .,
accounting is the language of nonbusiness organizations as well.
., ., ., ., ., ., ., ., .,
1-5. Accounting is subdivided into two major areas: managerial accounting and financial accounting.
., ., ., ., ., ., ., ., ., ., ., .,
Managerial accounting relates to generating any financial information that managers can use to improve the
., ., ., ., ., ., ., ., ., ., ., ., ., ., .,
future results of the organization. Thisincludes techniques designed to generate any financial data that might
., ., ., ., ., ., ., ., ., ., ., ., ., ., ., .,
help managers make more effective decisions. Major aspects of managerial accounting relate to making
., ., ., ., ., ., ., ., ., ., ., ., ., .,
financial plans for the organization, implementing those plans, and then working to ensure that the plans are
., ., ., ., ., ., ., ., ., ., ., ., ., ., ., ., .,
achieved. Some examples of managerial accounting include preparing annual operating budgets, generating
., ., ., ., ., ., ., ., ., ., ., .,
information for use in making major investment decisions, and providing the data needed to decide whether
., ., ., ., ., ., ., ., ., ., ., ., ., ., ., .,
to buy or lease a major piece of equipment. Financial accounting provides retrospective information. As
., ., ., ., ., ., ., ., ., ., ., ., ., ., .,
events that have financial implications occur they are recorded by the financial accounting system. From time
., ., ., ., ., ., ., ., ., ., ., ., ., ., ., .,
to time (usually monthly, quarterly, or annually), the recorded data are summarized and reported to interested
., ., ., ., ., ., ., ., ., ., ., ., ., ., ., .,
users. The users include both internal managers and people outside the organization. Those outsiders include
., ., ., ., ., ., ., ., ., ., ., ., ., ., .,
those who have lent or might lend money to the organization (creditors), those who might sell things to the
., ., ., ., ., ., ., ., ., ., ., ., ., ., ., ., ., ., .,
organization (called suppliers or vendors), and other interested parties. These interested parties may include
., ., ., ., ., ., ., ., ., ., ., ., ., .,
those with a particular interest in public service organizations, such as regulators, legislators, and citizens.
., ., ., ., ., ., ., ., ., ., ., ., ., ., .,
Financial reports provide information on the financial status of the organization at a specific point in time, as
., ., ., ., ., ., ., ., ., ., ., ., ., ., ., ., ., .,
well as reporting the past results of the organization‗s operations (i.e., how well it has done from a financial
., ., ., ., ., ., ., ., ., ., ., ., ., ., ., ., ., ., .,
viewpoint).
.,
1-6. Finance focuses on the alternative sources and uses of the organization‗s financial resources. Obtaining
., ., ., ., ., ., ., ., ., ., ., ., ., .,
funds when needed from appropriate sources and the deployment of resources within the organization fall
., ., ., ., ., ., ., ., ., ., ., ., ., ., .,
under thisheading. In addition,finance involves the financial markets (such as stock and
., ., ., ., ., ., ., ., ., ., ., ., ., .,
1 |P a g e ., ., ., ., .,
,bond markets) that provide a means to generating funds for organizations.
., ., ., ., ., ., ., ., ., .,
2 |P a g e
., ., ., ., .,
, 1-7. Yes. Achieving the goals of the organization requires financial planning. Financial management
., ., ., ., ., ., ., ., ., ., ., .,
provides information for managers to use in making their decisions. It helps managers by providing
., ., ., ., ., ., ., ., ., ., ., ., ., ., .,
information on thelikelyfinancial impact of each proposed alternative. It also provides information about
., ., ., ., ., ., ., ., ., ., ., ., ., ., .,
financial stability, efficiency, and effectiveness.
., ., ., ., .,
1-8. Clearly, we might expect some public service organizations that are proprietary, such as some hospitals, to
., ., ., ., ., ., ., ., ., ., ., ., ., ., ., .,
earn profits. But what about other public service organizations such as charities?They should make a profit as
., ., ., ., ., ., ., ., ., ., ., ., ., ., ., ., ., .,
well. Profits provide a safety margin against unexpected costs, provide resources to replace buildings and
., ., ., ., ., ., ., ., ., ., ., ., ., ., .,
equipment, and to expand and improve services.
., ., ., ., ., ., .,
1-9.Federalgovernment(seetextFigure1-1)
., ., ., ., ., .,
., Individual income taxes ., .,
Social insurancetaxes ., .,
Corporateincome tax
., ., .,
Stateandlocal government(seetext Figure1-4)
., ., ., ., ., ., .,
., Sales and gross receipts tax ., ., ., .,
Federalgovernment .,
., Property taxes .,
., Individualincometaxes ., .,
Healthsector(seetextFigure1-6)., ., ., ., .,
., Private insurance .,
., Medicare
Medicaid
Othergovernmentprograms ., .,
Not-for-profit sector(see text) ., ., .,
Private payments for goods and services ., ., ., ., .,
., Governmentpaymentsforgoodsandservices ., ., ., ., .,
3 |P a g e
., ., ., ., .,
