Solutions Manual for Financial Management for Public, Health, and Not-for-Profit Organizations (7th Edition by Steven Finkler, Thad Calabrese, Daniel Smith)

Instructor’sbManualbforbFinancialbManagementb forbPublic,bHealth,bandbNot-for-ProfitbOrganizations1,



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 Calab
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ese, (Complete 15 Chapters)
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,Chapterb3:b Additionalb Budgetingb Concepts 3-2


INTRODUCTION
Chapter 1 b
TO
FINANCIALM b



ANAGEMENT
Questions for Discussion
b b




1-
1.bFinancialbmanagementbisbthebsubsetbofbmanagementbthatbfocusesbonbgeneratingbfinancialbinfor
mationbthatbcanbimprovebdecisions.bThebdecisionsbareborientedbtowardbachievingbthebvariousbgoalsb
ofbtheborganizationbwhilebmaintainingbabsatisfactorybfinancialbsituation.bFinancialbmanagementbenco
mpassesbthebbroadbareasbofbaccountingbandbfinance.

1-2.bInbproprietary,borbfor-
profit,borganizations,banbunderlyingbgoalbisbtobmaximizebthebwealthbofbthebownersbofbtheborganizati
on.

1-
3.bInbpublicbserviceborganizations,bdecisionsbareborientedbtowardbachievingbthebvariousbgoalsbofbthe
borganizationbwhileb maintainingbabsatisfactorybfinancialbsituation.




1-
4.bAccountingbisbabsystembforbkeepingbtrackbofbthebfinancialbstatusbofbanborganizationbandbthebfinan
cialbresultsbofbitsbactivities.bItbhasboftenbbeenbreferredbtobasbtheblanguagebofbbusiness.bThebvocabula
rybusedbbybaccountingbisbtheblanguagebofbnonbusinessborganizationsbasbwell.

1-
5.bAccountingbisbsubdividedbintobtwobmajorbareas:bmanagerialbaccountingbandbfinancialbaccounting
.bManagerialbaccountingbrelatesbtobgeneratingbanybfinancialbinformationbthatbmanagersbcanbusebtobi
mprovebthebfuturebresultsbofbtheborganization.bThisbincludesbtechniquesbdesignedbtobgeneratebanybf
inancialbdatabthatbmightbhelpbmanagersbmakebmorebeffectivebdecisions.bMajorbaspectsbofbmanageria
lbaccountingbrelatebtobmakingbfinancialbplansbforbtheborganization,bimplementingbthosebplans,bandbth
enbworkingbtobensurebthatbthebplansbarebachieved.bSomebexamplesbofbmanagerialbaccountingbinclud
ebpreparingbannualboperatingbbudgets,bgeneratingbinformationbforbusebinbmakingbmajorbinvestment
bdecisions,bandbprovidingbthebdatabneededbtobdecidebwhetherbtobbuyborbleasebabmajorbpiecebofbequi


pment.bFinancialbaccountingbprovidesbretrospectivebinformation.bAsbeventsbthatbhavebfinancialbimp
licationsboccurbtheybarebrecordedbbybthebfinancialbaccountingbsystem.bFrombtimebtobtimeb(usuallybmo
nthly,bquarterly,borbannually),bthebrecordedbdatabarebsummarizedbandbreportedbtobinterestedbusers.b
Thebusersbincludebbothbinternalbmanagersbandbpeopleboutsidebtheborganization.bThoseboutsidersbin
cludebthosebwhobhaveblentborbmightblendbmoneybtobtheborganizationb(creditors),bthosebwhobmightbs
ellbthingsbtobtheborganizationb(calledbsuppliersborbvendors),bandbotherbinterestedbparties.bThesebinte
restedbpartiesbmaybincludebthosebwithbabparticularbinterestbinbpublicbserviceborganizations,bsuchbasbre
gulators,blegislators,bandbcitizens.bFinancialbreportsbprovidebinformationbonbthebfinancialbstatusbofbt

, Instructor’sbManualbforbFinancialbManagementb forbPublic,bHealth,bandbNot-for-ProfitbOrganizations1,
heborganizationbatbabspecificbpointbinbtime,basbwellbasbreportingbthebpastbresultsbofbtheborganization‘s
boperationsb(i.e.,bhowbwellbitb hasbdonebfrombab financialbviewpoint).

, Chapterb3:b Additionalb Budgetingb Concepts 3-4


1-
6.bFinancebfocusesbonbthebalternativebsourcesbandbusesbofbtheborganization‘sbfinancialbresources.bO
btainingbfundsbwhenbneededbfrombappropriatebsourcesbandbthebdeploymentbofbresourcesbwithinbth
eborganizationbfallbunderbthisbheading.bInbaddition,bfinancebinvolvesbthebfinancialbmarketsb(suchbasbs
tockbandbbondbmarkets)bthatb providebabmeansbtob generatingbfundsbforborganizations.

1-
7.bYes.bAchievingbthebgoalsbofbtheborganizationbrequiresbfinancialbplanning.bFinancialbmanagementb
providesbinformationbforbmanagersbtobusebinbmakingbtheirbdecisions.bItbhelpsbmanagersbbybprovidi
ngbinformationbonbtheblikelybfinancialbimpactbofbeachbproposedbalternative.bItbalsobprovidesbinforma
tionbaboutbfinancialbstability,befficiency,bandbeffectiveness.

1-
8.bClearly,bwebmightbexpectbsomebpublicbserviceborganizationsbthatbarebproprietary,bsuchbasbsomebh
ospitals,btobearnbprofits.bButbwhatbaboutbotherbpublicbserviceborganizationsbsuchbasbcharities?bTheyb
shouldbmakebabprofitbasbwell.bProfitsbprovidebabsafetybmarginbagainstbunexpectedbcosts,bprovidebres
ourcesbtob replacebbuildingsbandbequipment,bandbtobexpandbandbimprovebservices.

1-9.b Federalbgovernmentb(seebtextbFigureb1-1)
 Individualbincomebtaxes
 Socialbinsurancebtaxes
 Corporatebincomebtax

Statebandblocalbgovernmentb(seebtextbFigureb1-4)
 Salesbandbgrossbreceiptsbtax
 Federalbgovernment
 Propertybtaxes
 Individualbincomebtaxes

Healthbsectorb(seebtextbFigureb1-6)
 Privatebinsurance
 Medicare
 Medicaid
 Otherbgovernmentbprograms

Not-for-profitb sectorb(seebtext)
 Privatebpaymentsbforbgoodsbandbservices
 Governmentbpaymentsbforbgoodsbandbservices
 Donations

1-
10.bFederalbgovernmentbspendingbexceededb$6btrillionbinb2020bandbstatebandblocalbgovernmentb spe
ndingbwasbmorebthanb$3btrillionbinb2018.bInbcontrast,bthebGDPbwasb$21btrillionbinb2020.bForbmorebupb
tobdatebinformation,bexaminebthebstatisticalbtablesbofbthebmostbrecentbEconomicbReportbofbthebPre
sident,bwhichbisbavailablebonline.