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

Instructor’s Manual for Financial Management for Public, Health, and Not-for-
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Profit Organizations1,
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SOLUTIONS MANUAL for Financial Management for Public He
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alth, and Not-for-
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Profit Organizations 7th Edition by Steven Finkler, Thad Calabr
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ese, (Complete 15 Chapters)
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,Chapter 3: Additional Budgeting Concep
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INTRODUCTION
Chapter 1 S!
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FINANCIALM !S




ANAGEMENT
Questions for Discussion S! S!




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1. Financial management is the subset of management that focuses on generating financial infor
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mationthat can improve decisions. The decisions are oriented toward achieving the various goals
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of the organization while maintaining a satisfactory financial situation. Financial management enc
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ompassesthe broad areas of accounting and finance. !S S! S! S! S! S! S!




1-2. In proprietary, or for-
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profit, organizations, an underlying goal is to maximize the wealth of the owners of the organizat
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ion.

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3. In public service organizations, decisions are oriented toward achieving the various goals of th
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e organization while maintaining a satisfactory financial situation.
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4. Accounting is a system for keeping track of the financial status of an organization and the fina
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ncial results of its activities. It has often been referred to as the language of business. The vocab
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ulary used by accounting is the language of nonbusiness organizations as well.
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5. Accounting is subdivided into two major areas: managerial accounting and financial accountin
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g. Managerial accounting relates to generating any financial information that managers can use t
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o improve the future results of the organization. This includes techniques designed to generate a
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ny financial data that might help managers make more effective decisions. Major aspects of man
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agerialaccounting relate to making financial plans for the organization, implementing those plans,
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and thenworking to ensure that the plans are achieved. Some examples of managerial accountin
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g include preparing annual operating budgets, generating information for use in making major in
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vestment decisions, and providing the data needed to decide whether to buy or lease a major pi
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ece of equipment. Financial accounting provides retrospective information. As events that have f
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inancial implications occur they are recorded by the financial accounting system. From time to tim
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e (usuallymonthly, quarterly, or annually), the recorded data are summarized and reported to int
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erested users.The users include both internal managers and people outside the organization. Th
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ose outsiders include those who have lent or might lend money to the organization (creditors), t
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hose who might sell things to the organization (called suppliers or vendors), and other interested
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parties. These interested parties may include those with a particular interest in public service org
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anizations, such asregulators, legislators, and citizens. Financial reports provide information on t
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, Instructor’s Manual for Financial Management for Public, Health, and Not-for-
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heProfit
S!financial status of1,the organization at a specific point in time, as well as reporting the past res
Organizations
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ults of the organization‘s operations (i.e., how well it has done from a financial viewpoint).
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, Chapter 3: Additional Budgeting Concep
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ts

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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
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theorganization fall under this heading. In addition, finance involves the financial markets (such
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as stock and bond markets) that provide a means to generating funds for organizations.
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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 provi
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ding information on the likely financial impact of each proposed alternative. It also provides info
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rmation about financial stability, efficiency, and effectiveness.
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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? Th
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eyshould 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

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10. Federal government spending exceeded $6 trillion in 2020 and state and local government spe
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ndingwas more than $3 trillion in 2018. In contrast, the GDP was $21 trillion in 2020. For more u
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p to date information, examine the statistical tables of the most recent Economic Report of the
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President, which is available online. S! S! S! S!