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

Instructor’s21Manual21for21Financial21 Management21 for21Public,21Health,21and21Not-for-
Profit21Organizations1,


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

,Chapter213:21 Additional21 Budgeting21 Co 3-2
ncepts

INTRODUCTION
Chapter 1 21 TO
FINANCIAL12M
ANAGEMENT
Questions21for21Discussion

1-
1.21Financial21management21is21the21subset21of21management21that21focuses21on21generating21fi
nancial21information21that21can21improve21decisions.21The21decisions21are21oriented21toward21ach
ieving21the21various21goals21of21the21organization21while21maintaining21a21satisfactory21financial21s
ituation.21Financial21management21encompasses21the21broad21areas21of21accounting21and21finance
.

1-2.21In21proprietary,21or21for-
profit,21organizations,21an21underlying21goal21is21to21maximize21the21wealth21of21the21owners21of
21the21organization.


1-
3.21In21public21service21organizations,21decisions21are21oriented21toward21achieving21the21various
21goals21of21the21organization21while21 maintaining21a21satisfactory21financial21situation.


1-
4.21Accounting21is21a21system21for21keeping21track21of21the21financial21status21of21an21organizatio
n21and21the21financial21results21of21its21activities.21It21has21often21been21referred21to21as21the21la
nguage21of21business.21The21vocabulary21used21by21accounting21is21the21language21of21nonbusine
ss21organizations21as21well.

1-
5.21Accounting21is21subdivided21into21two21major21areas:21managerial21accounting21and21financia
l21accounting.21Managerial21accounting21relates21to21generating21any21financial21information21th
at21managers21can21use21to21improve21the21future21results21of21the21organization.21This21includes
21techniques21designed21to21generate21any21financial21data21that21might21help21managers21make2
1more21effective21decisions.21Major21aspects21of21managerial21accounting21relate21to21making21fina
ncial21plans21for21the21organization,21implementing21those21plans,21and21then21working21to21ensure
21that21the21plans21are21achieved.21Some21examples21of21managerial21accounting21include21prepa
ring21annual21operating21budgets,21generating21information21for21use21in21making21major21invest
ment21decisions,21and21providing21the21data21needed21to21decide21whether21to21buy21or21lease21
a21major21piece21of21equipment.21Financial21accounting21provides21retrospective21information.21
As21events21that21have21financial21implications21occur21they21are21recorded21by21the21 financial21ac
counting21system.21From21time21to21time21(usually21monthly,21quarterly,21or21annually),21the21reco
rded21data21are21summarized21and21reported21to21interested21users.21The21users21include21both21i
nternal21managers21and21people21outside21the21organization.21Those21outsiders21include21those2

, Instructor’s21Manual21for21Financial21 Management21 for21Public,21Health,21and21Not-for-
1who 21have
Profit 21lent21or21
21 Organizations1, might21lend21money21to21the21organization21(creditors),21those21who21mig
ht21sell21things21to21the21organization21(called21suppliers21or21vendors),21and21other21interested21
parties.21These21interested21parties21may21include21those21with21a21particular21interest21in21public
21service21organizations,21such21as21regulators,21legislators,21and21citizens.21Financial21reports21pro
vide21information21on21the21financial21status21of21the21organization21at21a21specific21point21in21ti
me,21as21well21as21reporting21the21past21results21of21the21organization‘s21operations21(i.e.,21how21
well21it21 has21done21from21a21financial21viewpoint).

, Chapter213:21 Additional21 Budgeting21 Co 3-4
ncepts

1-
6.21Finance21focuses21on21the21alternative21sources21and21uses21of21the21organization‘s21financial
21resources.21Obtaining21funds21when21needed21from21appropriate21sources21and21the21deploym
ent21of21resources21within21the21organization21fall21under21this21heading.21In21addition,21finance21i
nvolves21the21financial21markets21(such21as21stock21and21bond21markets)21that21 provide21a21mea
ns21to21 generating21 funds21for21organizations.

1-
7.21Yes.21Achieving21the21goals21of21the21organization21requires21financial21planning.21Financial21
management21provides21information21for21managers21to21use21in21making21their21decisions.21It21
helps21managers21by21providing21information21on21the21likely21financial21impact21of21each21prop
osed21alternative.21It21also21provides21information21about21financial21stability,21efficiency,21and21
effectiveness.

1-
8.21Clearly,21we21might21expect21some21public21service21organizations21that21are21proprietary,21s
uch21as21some21hospitals,21to21earn21profits.21But21what21about21other21public21service21organiza
tions21such21as21charities?21They21should21make21a21profit21as21well.21Profits21provide21a21safety21
margin21against21unexpected21costs,21provide21resources21to21 replace21buildings21and21equipme
nt,21and21to21expand21and21improve21services.

1-9.2 1 Federal21government21 (see21text21 Figure211-1)
 Individual21income21taxes
 Social21insurance21taxes
 Corporate21income21tax

State21and21local21government21 (see21text21 Figure211-4)
 Sales21and21gross21receipts21tax
 Federal21government
 Property21taxes
 Individual21income21taxes

Health21sector21(see21text21 Figure211-6)
 Private21insurance
 Medicare
 Medicaid
 Other21government21programs

Not-for-profit21 sector21(see21text)
 Private21payments21for21goods21and21services
 Government21payments21for21goods21and21services
 Donations

1-
10.21Federal21government21spending21exceeded21$621trillion21in21202021and21state21and21local21go