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
j j j j j j j j j j j j j
information that can improve decisions. The decisions are oriented toward achieving
j j j j j j j j j j j
the various goals of the organization while maintaining a satisfactory financial situation.
j j j j j j j j j j j j
Financialmanagement encompasses the broad areas of accounting and finance.
j j j j j j j j j
1-2. In proprietary, or for-profit, organizations, an underlying goal is to maximize the
j j j j j j j j j j j j j
wealth of the owners of the organization.
j j j j j j
1-3. In public service organizations, decisions are oriented toward achieving the various
j j j j j j j j j j j j
goals of the organization while maintaining a satisfactoryfinancialsituation.
j j j j j j j j j
1-4. Accounting is a system for keeping track of the financial status of an organization and the
j j j j j j j j j j j j j j j j j
financial results of its activities. It has often been referred to as the language of
j j j j j j j j j j j j j j j
business. The vocabulary used by accounting is the language of nonbusiness organizations
j j j j j j j j j j j j
as well. j
1-5. Accounting is subdivided into two major areas: managerial accounting and financial
j j j j j j j j j j j j
accounting. Managerial accounting relates to generating any financial information
j j j j j j j j j
that managers can use to improve the future results of the organization. This
j j j j j j j j j j j j j
includes techniques designed to generate any financial data that might help managers
j j j j j j j j j j j j
make more effective decisions. Major aspects of managerial accounting relate to making
j j j j j j j j j j j j
financial plans for the organization, implementing those plans, and then working to
j j j j j j j j j j j j
ensure that the plans are achieved. Some examples of managerial accounting include
j j j j j j j j j j j
preparing annual operating budgets, generating information for use in making
j j j j j j j j j j j
major investment decisions, and providing the data needed to decide whether
j j j j j j j j j j j
,to buy or lease a major piece of equipment. Financial accounting provides
j j j j j j j j j j j j
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
j j j j j j j j j j j j j
jannually), the recorded data are summarized and reported to interested users. The users
j j j j j j j j j j j j j
include both internal managers and people outside the organization. Those
j j j j j j j j j j
outsiders include those who have lent or might lend money to the organization
j j j j j j j j j j j j j
(creditors), those who might sell things to the organization (called suppliers or
j j j j j j j j j j j j
vendors), and other interested parties. These interested parties may include those with
j j j j j j j j j j j j
a particular interest in public service organizations, such as regulators, legislators, and
j j j j j j j j j j j j
citizens. Financial reports provide information on the financial status of the organization
j j j j j j j j j j j j
at a specific point in time, as well as reporting the past results of the organization‘s
j j j j j j j j j j j j j j j j
operations (i.e., how well it has done from a financialviewpoint).
j j j j j j j j j j
,
, Chapter 3: Additional Budgeting Concepts 3-2
1-6. Finance focuses on the alternative sources and uses of the organization‘s financial
j j j j j j j j j j j j j
resources. Obtaining funds when needed from appropriate sources and the deployment of
j j j j j j j j j j j j
resources within the organization fall under this heading. In addition, finance
j j j j j j j j j j j
involves the financial markets (such as stock and bond markets) that provide a means to
j j j j j j j j j j j j j j j
generating funds for organizations. j j j
1-7. Yes. Achieving the goals of the organization requires financial planning. Financial
j j j j j j j j j j j j
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
j j j j j j j j j j j j
proposed alternative. It also provides information about financial stability, efficiency, and
j j j j j j j j j j j
effectiveness.
1-8. Clearly, we might expect some public service organizations that are proprietary,
j j j j j j j j j j j j
such as some hospitals, to earn profits. But what about other public service
j j j j j j j j j j j j j
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
j j j j j j j j j j j
equipment, and to expand and improve services. j j j j j j
1-9. Federal government (see text Figure 1-1)
j j j j j j j
Individualincome taxes j j
Social insurance taxes j j
Corporate income tax j j
State and local government (see text Figure 1-4)
j j j j j j j
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)
j j j j j
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
j j j j j j j j j j j j j j
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
j j j j j j j j j j j j j
information that can improve decisions. The decisions are oriented toward achieving
j j j j j j j j j j j
the various goals of the organization while maintaining a satisfactory financial situation.
j j j j j j j j j j j j
Financialmanagement encompasses the broad areas of accounting and finance.
j j j j j j j j j
1-2. In proprietary, or for-profit, organizations, an underlying goal is to maximize the
j j j j j j j j j j j j j
wealth of the owners of the organization.
j j j j j j
1-3. In public service organizations, decisions are oriented toward achieving the various
j j j j j j j j j j j j
goals of the organization while maintaining a satisfactoryfinancialsituation.
j j j j j j j j j
1-4. Accounting is a system for keeping track of the financial status of an organization and the
j j j j j j j j j j j j j j j j j
financial results of its activities. It has often been referred to as the language of
j j j j j j j j j j j j j j j
business. The vocabulary used by accounting is the language of nonbusiness organizations
j j j j j j j j j j j j
as well. j
1-5. Accounting is subdivided into two major areas: managerial accounting and financial
j j j j j j j j j j j j
accounting. Managerial accounting relates to generating any financial information
j j j j j j j j j
that managers can use to improve the future results of the organization. This
j j j j j j j j j j j j j
includes techniques designed to generate any financial data that might help managers
j j j j j j j j j j j j
make more effective decisions. Major aspects of managerial accounting relate to making
j j j j j j j j j j j j
financial plans for the organization, implementing those plans, and then working to
j j j j j j j j j j j j
ensure that the plans are achieved. Some examples of managerial accounting include
j j j j j j j j j j j
preparing annual operating budgets, generating information for use in making
j j j j j j j j j j j
major investment decisions, and providing the data needed to decide whether
j j j j j j j j j j j
,to buy or lease a major piece of equipment. Financial accounting provides
j j j j j j j j j j j j
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
j j j j j j j j j j j j j
jannually), the recorded data are summarized and reported to interested users. The users
j j j j j j j j j j j j j
include both internal managers and people outside the organization. Those
j j j j j j j j j j
outsiders include those who have lent or might lend money to the organization
j j j j j j j j j j j j j
(creditors), those who might sell things to the organization (called suppliers or
j j j j j j j j j j j j
vendors), and other interested parties. These interested parties may include those with
j j j j j j j j j j j j
a particular interest in public service organizations, such as regulators, legislators, and
j j j j j j j j j j j j
citizens. Financial reports provide information on the financial status of the organization
j j j j j j j j j j j j
at a specific point in time, as well as reporting the past results of the organization‘s
j j j j j j j j j j j j j j j j
operations (i.e., how well it has done from a financialviewpoint).
j j j j j j j j j j
,
, Chapter 3: Additional Budgeting Concepts 3-2
1-6. Finance focuses on the alternative sources and uses of the organization‘s financial
j j j j j j j j j j j j j
resources. Obtaining funds when needed from appropriate sources and the deployment of
j j j j j j j j j j j j
resources within the organization fall under this heading. In addition, finance
j j j j j j j j j j j
involves the financial markets (such as stock and bond markets) that provide a means to
j j j j j j j j j j j j j j j
generating funds for organizations. j j j
1-7. Yes. Achieving the goals of the organization requires financial planning. Financial
j j j j j j j j j j j j
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
j j j j j j j j j j j j
proposed alternative. It also provides information about financial stability, efficiency, and
j j j j j j j j j j j
effectiveness.
1-8. Clearly, we might expect some public service organizations that are proprietary,
j j j j j j j j j j j j
such as some hospitals, to earn profits. But what about other public service
j j j j j j j j j j j j j
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
j j j j j j j j j j j
equipment, and to expand and improve services. j j j j j j
1-9. Federal government (see text Figure 1-1)
j j j j j j j
Individualincome taxes j j
Social insurance taxes j j
Corporate income tax j j
State and local government (see text Figure 1-4)
j j j j j j j
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)
j j j j j
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
j j j j j j j j j j j j j j
