Solution Manual For Financial Management For Public
Health, And Not-For-Profit Organizations 7th Edition
By Steven Finkler, Thad Calabrese Verified All
Chapter\\\'s 1 - 15 Complete Updated 2024/2025 A+
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Instructor’s Manual For Financial Management For Public, Health, And Not-For-Profit
Organizations1,
INTRODUCTION
Chapter 1 TOFINANCIAL MANAGEMENT
Questions For Discussion
1-1. Financial Management Is The Subset Of Management That Focuses On Generating Financial
Information That Can Improve Decisions. The Decisions Are Oriented Toward Achieving The
Various Goals Of The Organization While Maintaining a Satisfactory Financial Situation. Financial
Management Encompasses The Broad Areas Of Accounting And Finance.
1-2. In Proprietary, Or For-Profit, Organizations, An Underlying Goal Is To Maximize The Wealth Of
The Owners Of The Organization.
1-3. In Public Service Organizations, Decisions Are Oriented Toward Achieving The Various Goals Of
The Organization While Maintaining a Satisfactory Financial Situation.
1-4. Accounting Is a System For Keeping Track Of The Financial Status Of An Organization And The
Financial Results Of Its Activities. It Has Often Been Referred To As The Language Of Business.
The Vocabulary Used By Accounting Is The Language Of Nonbusiness Organizations As Well.
1-5. Accounting Is Subdivided Into Two Major Areas: Managerial Accounting And Financial
Accounting. Managerial Accounting Relates To Generating Any Financial Information That
Managers Can Use To Improve The Future Results Of The Organization. This Includes Techniques
Designed To Generate Any Financial Data That Might Help Managers Make More Effective
Decisions. Major Aspects Of Managerial Accounting Relate To Making Financial Plans For The
Organization, Implementing Those Plans, And Then Working To Ensure That The Plans Are
Achieved. Some Examples Of Managerial Accounting Include Preparing Annual Operating
Budgets, Generating Information For Use In Making Major Investment Decisions, And Providing
The Data Needed To Decide Whether To Buy Or Lease a Major Piece Of Equipment. Financial
Accounting Provides Retrospective Information. As Events That Have Financial Implications
Occur They Are Recorded By The Financial Accounting System. From Time To Time (Usually
Monthly, Quarterly, Or Annually), The Recorded Data Are Summarized And Reported To
Interested Users. The Users Include Both Internal Managers And People Outside The
Organization. Those Outsiders Include Those Who Have Lent Or Might Lend Money To The
Organization (Creditors), Those Who Might Sell Things To The Organization (Called Suppliers Or
Vendors), And Other Interested Parties. These Interested Parties May Include Those With a
Particular Interest In Public Service Organizations, Such As Regulators, Legislators, And Citizens.
Financial Reports Provide Information On The Financial Status Of The Organization At a Specific
Point In Time, As Well As Reporting The Past Results Of The Organization‘s Operations (i.e.,
How Well It Has Done From a Financial Viewpoint).
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Instructor’s Manual For Financial Management For Public, Health, And Not-For-Profit
Organizations1,
1-6. Finance Focuses On The Alternative Sources And Uses Of The Organization‘s Financial Resources.
Obtaining Funds When Needed From Appropriate Sources And The Deployment Of Resources
Within The Organization Fall Under This Heading. In Addition, Finance Involves The Financial
Markets (Such As Stock And Bond Markets) That Provide a Means To Generating Funds For
Organizations.
1-7. Yes. Achieving The Goals Of The Organization Requires Financial Planning. Financial
Management Provides Information For Managers To Use In Making Their Decisions. It Helps
Managers By Providing Information On The Likely Financial Impact Of Each Proposed
Alternative. It Also Provides Information About Financial Stability, Efficiency, And Effectiveness.
1-8. Clearly, We Might Expect Some Public Service Organizations That Are Proprietary, Such As Some
Hospitals, To Earn Profits. But What About Other Public Service Organizations Such As
Charities? They Should Make a Profit As Well. Profits Provide a Safety Margin Against
Unexpected Costs, Provide Resources To Replace Buildings And Equipment, And To Expand And
Improve Services.
1-9. Federal Government (See Text Figure 1-1)
Individual Income Taxes
Social Insurance Taxes
Corporate Income Tax
State And Local Government (See Text Figure 1-4)
Sales And Gross Receipts Tax
Federal Government
Property Taxes
Individual Income Taxes
Health Sector (See Text Figure 1-6)
Private Insurance
Medicare
Medicaid
Other Government Programs
Not-For-Profit Sector (See Text)
Private Payments For Goods And Services
Government Payments For Goods And Services
Donations
1-10. Federal Government Spending Exceeded $6 Trillion In 2020 And State And Local Government
Spending Was More Than $3 Trillion In 2018. In Contrast, The Gdp Was $21 Trillion In 2020. For
More Up To Date Information, Examine The Statistical Tables Of The Most Recent Economic
Report Of The President, Which Is Available Online.
1-11. The Reported Surplus Includes Both On And Off Budget Items. Social Security Taxes Represent
An Off Budget Item That Until Recently Raised More Revenue Than Was Spent On Social
Security Payments.
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The Surplus In This Area Offset Other Government Losses, And Even Resulted In An Overall
Surplus For The Federal Government. This Is No Longer The Case, And, Over Time, Trust Fund
Resources Will Be Used Up To Provide Benefits. As The Federal Government Will Not Have
Access To The Excess Resources From Social Security, It Will Have To Borrow And Increase The
Total Level Of Federal Debt, Unless Revenues Or Spending Are Changed.
1-12. Sometimes Gifts Come With Strings Attached. If The Conditions Of The Gift Create a Burden
That The Organization Does Not Want To Accept, Or Somehow Requires The Organization To
Work In Opposition To Its Mission, It Might Turn Down The Gift.
1-13. The World Bank Has Defined Ngos As "Private Organizations That Pursue Activities To Relieve
Suffering, Promote The Interests Of The Poor, Protect The Environment, Provide Basic Social
Services, Or Undertake Community Development" (World Bank Operational Directive 14.70).
Ngos Are Quite Similar To The Not-For-Profit Organizations. They Are Primarily Mission-
Focused Rather Than Profit- Focused. Ngos Fall Into Three Main Categories: Community-Based,
National, And International.
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Health, And Not-For-Profit Organizations 7th Edition
By Steven Finkler, Thad Calabrese Verified All
Chapter\\\'s 1 - 15 Complete Updated 2024/2025 A+
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Instructor’s Manual For Financial Management For Public, Health, And Not-For-Profit
Organizations1,
INTRODUCTION
Chapter 1 TOFINANCIAL MANAGEMENT
Questions For Discussion
1-1. Financial Management Is The Subset Of Management That Focuses On Generating Financial
Information That Can Improve Decisions. The Decisions Are Oriented Toward Achieving The
Various Goals Of The Organization While Maintaining a Satisfactory Financial Situation. Financial
Management Encompasses The Broad Areas Of Accounting And Finance.
1-2. In Proprietary, Or For-Profit, Organizations, An Underlying Goal Is To Maximize The Wealth Of
The Owners Of The Organization.
1-3. In Public Service Organizations, Decisions Are Oriented Toward Achieving The Various Goals Of
The Organization While Maintaining a Satisfactory Financial Situation.
1-4. Accounting Is a System For Keeping Track Of The Financial Status Of An Organization And The
Financial Results Of Its Activities. It Has Often Been Referred To As The Language Of Business.
The Vocabulary Used By Accounting Is The Language Of Nonbusiness Organizations As Well.
1-5. Accounting Is Subdivided Into Two Major Areas: Managerial Accounting And Financial
Accounting. Managerial Accounting Relates To Generating Any Financial Information That
Managers Can Use To Improve The Future Results Of The Organization. This Includes Techniques
Designed To Generate Any Financial Data That Might Help Managers Make More Effective
Decisions. Major Aspects Of Managerial Accounting Relate To Making Financial Plans For The
Organization, Implementing Those Plans, And Then Working To Ensure That The Plans Are
Achieved. Some Examples Of Managerial Accounting Include Preparing Annual Operating
Budgets, Generating Information For Use In Making Major Investment Decisions, And Providing
The Data Needed To Decide Whether To Buy Or Lease a Major Piece Of Equipment. Financial
Accounting Provides Retrospective Information. As Events That Have Financial Implications
Occur They Are Recorded By The Financial Accounting System. From Time To Time (Usually
Monthly, Quarterly, Or Annually), The Recorded Data Are Summarized And Reported To
Interested Users. The Users Include Both Internal Managers And People Outside The
Organization. Those Outsiders Include Those Who Have Lent Or Might Lend Money To The
Organization (Creditors), Those Who Might Sell Things To The Organization (Called Suppliers Or
Vendors), And Other Interested Parties. These Interested Parties May Include Those With a
Particular Interest In Public Service Organizations, Such As Regulators, Legislators, And Citizens.
Financial Reports Provide Information On The Financial Status Of The Organization At a Specific
Point In Time, As Well As Reporting The Past Results Of The Organization‘s Operations (i.e.,
How Well It Has Done From a Financial Viewpoint).
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Instructor’s Manual For Financial Management For Public, Health, And Not-For-Profit
Organizations1,
1-6. Finance Focuses On The Alternative Sources And Uses Of The Organization‘s Financial Resources.
Obtaining Funds When Needed From Appropriate Sources And The Deployment Of Resources
Within The Organization Fall Under This Heading. In Addition, Finance Involves The Financial
Markets (Such As Stock And Bond Markets) That Provide a Means To Generating Funds For
Organizations.
1-7. Yes. Achieving The Goals Of The Organization Requires Financial Planning. Financial
Management Provides Information For Managers To Use In Making Their Decisions. It Helps
Managers By Providing Information On The Likely Financial Impact Of Each Proposed
Alternative. It Also Provides Information About Financial Stability, Efficiency, And Effectiveness.
1-8. Clearly, We Might Expect Some Public Service Organizations That Are Proprietary, Such As Some
Hospitals, To Earn Profits. But What About Other Public Service Organizations Such As
Charities? They Should Make a Profit As Well. Profits Provide a Safety Margin Against
Unexpected Costs, Provide Resources To Replace Buildings And Equipment, And To Expand And
Improve Services.
1-9. Federal Government (See Text Figure 1-1)
Individual Income Taxes
Social Insurance Taxes
Corporate Income Tax
State And Local Government (See Text Figure 1-4)
Sales And Gross Receipts Tax
Federal Government
Property Taxes
Individual Income Taxes
Health Sector (See Text Figure 1-6)
Private Insurance
Medicare
Medicaid
Other Government Programs
Not-For-Profit Sector (See Text)
Private Payments For Goods And Services
Government Payments For Goods And Services
Donations
1-10. Federal Government Spending Exceeded $6 Trillion In 2020 And State And Local Government
Spending Was More Than $3 Trillion In 2018. In Contrast, The Gdp Was $21 Trillion In 2020. For
More Up To Date Information, Examine The Statistical Tables Of The Most Recent Economic
Report Of The President, Which Is Available Online.
1-11. The Reported Surplus Includes Both On And Off Budget Items. Social Security Taxes Represent
An Off Budget Item That Until Recently Raised More Revenue Than Was Spent On Social
Security Payments.
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The Surplus In This Area Offset Other Government Losses, And Even Resulted In An Overall
Surplus For The Federal Government. This Is No Longer The Case, And, Over Time, Trust Fund
Resources Will Be Used Up To Provide Benefits. As The Federal Government Will Not Have
Access To The Excess Resources From Social Security, It Will Have To Borrow And Increase The
Total Level Of Federal Debt, Unless Revenues Or Spending Are Changed.
1-12. Sometimes Gifts Come With Strings Attached. If The Conditions Of The Gift Create a Burden
That The Organization Does Not Want To Accept, Or Somehow Requires The Organization To
Work In Opposition To Its Mission, It Might Turn Down The Gift.
1-13. The World Bank Has Defined Ngos As "Private Organizations That Pursue Activities To Relieve
Suffering, Promote The Interests Of The Poor, Protect The Environment, Provide Basic Social
Services, Or Undertake Community Development" (World Bank Operational Directive 14.70).
Ngos Are Quite Similar To The Not-For-Profit Organizations. They Are Primarily Mission-
Focused Rather Than Profit- Focused. Ngos Fall Into Three Main Categories: Community-Based,
National, And International.
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