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

Solution manual for financial management for
public health and not for profit organizations 7th
edition by finkler all chapters 1 to 15
Instructor’s Manual for Financial Management for Public, Health, and Not-for-Profit Organizations1,
2E


INTRODUCTION
Chapter 1 TO
FINANCIAL
MANAGEMENT
Questions for Discussion

1-1. Financial management is the subset of management that focuses on generating financial
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information that can improve decisions. The decisions are oriented toward achieving
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the various goals of the organization while maintaining a satisfactory financial situation.
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Financialmanagement encompasses 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
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wealth of the owners of the organization.
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1-3. In public service organizations, decisions are oriented toward achieving the various
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goals of the organization while maintaining a satisfactoryfinancialsituation.
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1-4. Accounting is a system for keeping track of the financial status of an organization and the
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financial results of its activities. It has often been referred to as the language of
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business. The vocabulary used by accounting is the language of nonbusiness organizations
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as well. j




1-5. Accounting is subdivided into two major areas: managerial accounting and financial
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accounting. Managerial accounting relates to generating any financial information
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that managers can use to improve the future results of the organization. This
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includes techniques designed to generate any financial data that might help managers
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make more effective decisions. Major aspects of managerial accounting relate to making
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financial plans for the organization, implementing those plans, and then working to
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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
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major investment decisions, and providing the data needed to decide whether
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,to buy or lease a major piece of equipment. Financial accounting provides
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retrospective information. As events that have financial j implications occur they are j j j j j j j j j j




recorded by the financial accounting system. From time to time (usually monthly, quarterly, or
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jannually), the recorded data are summarized and reported to interested users. The users
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include both internal managers and people outside the organization. Those
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outsiders include those who have lent or might lend money to the organization
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(creditors), those who might sell things to the organization (called suppliers or
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vendors), and other interested parties. These interested parties may include those with
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a particular interest in public service organizations, such as regulators, legislators, and
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citizens. Financial reports provide information on the financial status of the organization
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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 financialviewpoint).
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,
, Chapter 3: Additional Budgeting Concepts 3-2



1-6. Finance focuses on the alternative sources and uses of the organization‘s financial
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resources. Obtaining funds when needed from appropriate sources and the deployment of
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resources within the organization fall under this heading. In addition, finance
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involves the financial markets (such as stock and bond markets) that provide a means to
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generating funds for organizations. j j j




1-7. Yes. Achieving the goals of the organization requires financial planning. Financial
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management provides information for managers to use in making their decisions. It j j j j j j j j j j j j




helps managers by providing information on the likely financial impact of each
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proposed alternative. It also provides information about financial stability, efficiency, and
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effectiveness.

1-8. Clearly, we might expect some public service organizations that are proprietary,
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such as some hospitals, to earn profits. But what about other public service
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organizations such as charities? They should make a profit as well. Profits provide a j j j j j j j j j j j j j j




safety margin against unexpected costs, provide resources to replace buildings and
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equipment, and to expand and improve services. j j j j j j




1-9. Federal government (see text Figure 1-1)
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 Individualincome taxes j j




 Social insurance taxes j j




 Corporate income tax j j




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




 Federal government j




 Property taxes j




 Individualincome taxes j j




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




 Medicare
 Medicaid
 Other government programs j j




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




 Private payments for goods and services j j j j j




 Government payments for goods and services j j j j j




 Donations

1-10. Federal government spending exceeded $6 trillion in 2020 and state and local government
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