Professional Documents
Culture Documents
ElementsofFinancialManagement g
Planning
Decision Making
EFM
Organizing and Directing
Controlling
Process
Clinical
ManagersViewpoint
TheClinicalViews 1 Usually 1. U ll work kwith ithi interact t tdirectly di tl with ith patient 2. Responsibleforservicedelivery 3. Alsoresponsibleforclinicaloutcomes
ManagersViewpoint
ProcessViews
FourPillarsofFinancialPractice
1. CashFlow 1 2. RiskAversion 3. TimeValueofMoney 4. ControlofOpportunityCost
AccountingPrinciples
Rulesfordebitandcreditentries
AssetandExpenses Liabilities Liabilities,Owners Owners EquityandRevenue
Increase
Debit
Credit
Decrease
Credit
Debit
BasicSystemElement
Initialtransactiontosubsidiaryjournalto generalledger CreateFinancialstatement Reviewsadjustbalancethroughtotrial b l balance
TheAnnualManagementCycle
DailyandWeeklyReport:Cashflow flow,Out Patients,InPatient,etc QuarterlyReportandStatistics:Financial, Operational(Qualityandsafety) Annual A lYear Y and dReport R :Financial Fi i lreport, QualityandSafety
HospitalRevenues
Typically,hospitalsgettheirrevenueinavariety ofways: 1. Byprovidingmedicalservices 2. By yproviding p gnonmedicalservices 3. Throughdonationsandgrantsfrom individuals foundations individuals, foundations,orthegovernment 4. Throughinvestments
NonOperating Revenue
Operating Revenue
HospitalExpenses: HowHospitalsSpendMoney
Hospitalsmustspendmoneytofunctionand providepatientcare.Themaincategoriesof expensesinclude 1. Salaries,employbenefit 2. Supplies l and dother h 3. Depreciationandamortization, 4. interest,and 5. baddebtexpenses. p
SourcesofHospitalFinancial Information
Theincomestatement
Thereareseveralmajorelementsona balancesheet.
1. Assetsareeconomicresourcesthatareexpectedto providefuturebenefitsbyhelpingtoincreasecashinflows orreducecashoutflows.Property,plant,andequipment (PPE)areconsidere assets. 2. Liabilitiesareeconomicobligationsoftheorganizationto outsiders,orclaimsagainstitsassetsbyoutsiders. Accountspayableisasexampleofahospitalliability. 3. Netassets,fundbalance,orownersequityareall differentnamesforthesamething:theyallrefertothe residualinterestin,orremainingclaimsagainst,the organizations i ti assets t after ft all llliabilities li biliti have h been b deducted.Thismaybeexpressedas:assets liabilities= netassets.
STATEMENTOFCASHFLOWS
CASHFROMOPERATINGACTIVITIES NetIncome$10,645 $ NoncashExpenses(Depreciation&Amortization)13,152 WorkingCapitalChanges: IncreaseAccountsReceivable6 6,480 480 IncreaseAccountsPayable4,295 TotalCashfromOperatingActivities$25,982 CASHUSEDFORINVESTINGACTIVITIES Property,Plant,andEquipmentPurchases7,854 IncreasesorDecreasesinMarketableSecurities2,702 CASHFROMFINANCINGACTIVITIES IssuanceorRepaymentofLongTermDebt7,087 TransferstoandfromAffiliates4,300 NETCHANGEINCASH$9,443