Solution Manual for Financial Management for Public Health and Not-for-Profit Organizations (7th Ed) by Finkler, Calabrese & Smith Verified Complete Guide Chapter 1 - 15

Solution Manual for Financial Management for Public
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S Health, and Not-for-Profit Organizations 7th Edition by
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Steven Finkler, Thad Calabrese Verified all
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Chapter\\\'s 1 – 15 Complete Updated 2024/2025
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A+ S

, Instructor’s Manual for Financial Management for Public, Health, and Not-for-Profit Organizations1,
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INTRODUCTION
Chapter 1 S
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Questions for Discussion S S




1-1. Financial management is the subset of management that focuses on generating financial information
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that can improve decisions. The decisions are oriented toward achieving the various goals of the
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organization while maintaining a satisfactory financial situation. Financial management encompasses
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the broad areas of 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
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owners of 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
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by 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
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improve the future results of the organization. This includes techniques designed to generate any
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financial 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 then
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working 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
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decisions, and providing the data needed to decide whether to buy or lease a major piece of
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equipment. Financial accounting provides retrospective information. As events that have financial
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implications occur they are recorded by the financial accounting system. From time to time (usually
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monthly, quarterly, or annually), the recorded data are summarized and reported to interested users.
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The users include both internal managers and people outside the organization. Those outsiders
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include those who have lent or might lend money to the organization (creditors), those who might
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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
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the organization at a specific point in time, as well as reporting the past results of the organization‘s
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operations (i.e., how well it has done from a financial viewpoint).
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, Instructor’s Manual for Financial Management for Public, Health, and Not-for-Profit Organizations1,
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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
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stock and 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
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about 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
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hospitals, to earn profits. But what about other public service organizations such as charities? They
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should make a profit as well. Profits provide a safety margin against unexpected costs, provide
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resources 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 S S



 Social insurance taxes S S



 Corporate income tax S S




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



 Federal government S



 Property taxes S



 Individual income taxes S S




Health sector (see text Figure 1-6)
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 Private insurance S



 Medicare
 Medicaid
 Other government programs S S




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



 Private payments for goods and services S S S S S



 Government payments for goods and services S S S S S



 Donations

1-10. Federal government spending exceeded $6 trillion in 2020 and state and local government spending
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was more than $3 trillion in 2018. In contrast, the GDP was $21 trillion in 2020. For more up to date
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information, examine the statistical tables of the most recent Economic Report of the President,
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which is available online.
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1-11. The reported surplus includes both on and off budget items. Social security taxes represent an off
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budget item that until recently raised more revenue than was spent on social security
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payments.
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, The surplus in this area offset other government losses, and even resulted in an overall surplus for
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the federal government. This is no longer the case, and, over time, trust fund resources will be used
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up to provide benefits. As the federal government will not have access to the excess resources from
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social security, it will have to borrow and increase the total level of federal debt, unless revenues or
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spending are changed.
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1-12. Sometimes gifts come with strings attached. If the conditions of the gift create a burden that the
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Sorganization does not want to accept, or somehow requires the organization to work in opposition to
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Sits mission, it might turn down the gift.
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1-13. The World Bank has defined NGOs as "private organizations that pursue activities to relieve
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Ssuffering, promote the interests of the poor, protect the environment, provide basic social services,
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Sor undertake community development" (World Bank Operational Directive 14.70). NGOs are quite
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Ssimilar to the not-for-profit organizations. They are primarily mission-focused rather than profit-
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Sfocused. NGOs fall into three main categories: community-based, national, and international.
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