HCM400
Healthcare Finance
Comprehensive Midterms Test (Qns & Ans)
2025
1. Which of the following financial metrics is critical for
assessing the profitability of a healthcare organization?
- A) Current Ratio
- B) Net Income Margin
- C) Debt-to-Equity Ratio
- D) Return on Assets
ANS: B) Net Income Margin
Rationale: The Net Income Margin directly indicates how
much profit a healthcare entity makes from its revenues after all
expenses are accounted for.
©/2025
,2. In healthcare finance, what is the primary purpose of a
budget?
- A) To predict patient outcomes
- B) To allocate resources efficiently
- C) To deter financial fraud
- D) To comply with regulatory standards
ANS: B) To allocate resources efficiently
Rationale: Budgets are essential for planning and managing
financial resources effectively, ensuring optimal allocation to
achieve healthcare outcomes.
3. What financial approach focuses on the cost-effectiveness of
various treatment alternatives?
- A) Cost-Benefit Analysis
- B) Break-even Analysis
- C) Variance Analysis
- D) Financial Forecasting
ANS: A) Cost-Benefit Analysis
Rationale: Cost-Benefit Analysis evaluates the relative costs
and outcomes of different healthcare options, allowing for
informed decision-making.
©/2025
, 4. Which of the following is considered a fixed cost in a
healthcare facility?
- A) Medical Supplies
- B) Salaries of Staff
- C) Utilities
- D) Patient Treatment Costs
ANS: B) Salaries of Staff
Rationale: Salaries are typically fixed costs that do not vary
with the volume of patient care provided, unlike variable costs
that fluctuate.
5. What does the term "accounts receivable" in healthcare
finance refer to?
- A) Money owed to the healthcare facility by patients and
payers
- B) Money owed by the healthcare facility to suppliers
- C) Cash on hand for operations
- D) Assets owned by the healthcare organization
ANS: A) Money owed to the healthcare facility by patients
and payers
Rationale: Accounts receivable represents funds that are to be
collected from patients and insurers for services rendered.
©/2025
Healthcare Finance
Comprehensive Midterms Test (Qns & Ans)
2025
1. Which of the following financial metrics is critical for
assessing the profitability of a healthcare organization?
- A) Current Ratio
- B) Net Income Margin
- C) Debt-to-Equity Ratio
- D) Return on Assets
ANS: B) Net Income Margin
Rationale: The Net Income Margin directly indicates how
much profit a healthcare entity makes from its revenues after all
expenses are accounted for.
©/2025
,2. In healthcare finance, what is the primary purpose of a
budget?
- A) To predict patient outcomes
- B) To allocate resources efficiently
- C) To deter financial fraud
- D) To comply with regulatory standards
ANS: B) To allocate resources efficiently
Rationale: Budgets are essential for planning and managing
financial resources effectively, ensuring optimal allocation to
achieve healthcare outcomes.
3. What financial approach focuses on the cost-effectiveness of
various treatment alternatives?
- A) Cost-Benefit Analysis
- B) Break-even Analysis
- C) Variance Analysis
- D) Financial Forecasting
ANS: A) Cost-Benefit Analysis
Rationale: Cost-Benefit Analysis evaluates the relative costs
and outcomes of different healthcare options, allowing for
informed decision-making.
©/2025
, 4. Which of the following is considered a fixed cost in a
healthcare facility?
- A) Medical Supplies
- B) Salaries of Staff
- C) Utilities
- D) Patient Treatment Costs
ANS: B) Salaries of Staff
Rationale: Salaries are typically fixed costs that do not vary
with the volume of patient care provided, unlike variable costs
that fluctuate.
5. What does the term "accounts receivable" in healthcare
finance refer to?
- A) Money owed to the healthcare facility by patients and
payers
- B) Money owed by the healthcare facility to suppliers
- C) Cash on hand for operations
- D) Assets owned by the healthcare organization
ANS: A) Money owed to the healthcare facility by patients
and payers
Rationale: Accounts receivable represents funds that are to be
collected from patients and insurers for services rendered.
©/2025
