HSA 525 Week 9 Homework 8 Ex 20-1, Ex 21-1, 21-2, 21-3 updated

Assignment Exercise 20–1: Financial Statement Capital Structures

Required

Find three different financial statements that have varying capital structures. Write a paragraph about each that explains the debt-equity relationship and that computes the percentage of debt and the percentage of equity represented.
Also note whether the percentage of annual interest on debt is revealed in the notes to the financial statements. If so, do you believe the interest rate is fair and equitable? Why
Assignment Exercise 21–1: Cost of Owning and Cost of Leasing

Using the appropriate table from the Chapter 12 Appendices, record the present-value factor at 10% for each year and compute the present-value cost of owning and the present value of leasing. Which alternative is more desirable at this interest rate?
Assignment Exercise 21–2

Summarize the costs to the practice of owning a system (per Doctor Smith) versus leasing (per Doctor Brown). Include a computation of comparative present value. (Refer to Assignment 21-1 for setting up a comparative present-value table.)

Cost of Owning: Per Dr. Smith at $35,000 with average maintenance of $4500        (4,000 + 5,000)/2 — Comparative Present Value
Assignment Exercise 21–3

How much more information should Rob have before he begins to make any calculations? Make a list. Which alternative do you believe would be best? Give your reasons.

HSA 525 Week 9 Discussion Leasing Equipment updated

“Leasing Equipment” Please respond to the following:
• Suggest one (1) key economic factor that motivates leasing as an option in acquiring an asset. Explain the potential asymmetries that may exist where leasing may be beneficial to both the lessors and the lessee.
• Determine one (1) significant benefit to an organization that decides to lease an asset that conventional lease analysis evaluation reveals has a negative Net Advantage to Leasing (NAL). Provide a real-life scenario that supports your answer.

HSA 525 Week 8 Homework 7 Ex 17-1, 17-2, 17-3, Ex 18-1, 18-2, 18-3 updated

Assignment Exercise 17–1: Variance Analysis

Greenview Hospital operated at 120% of normal capacity in two of its departments during the year. It operated 120% times 20,000 normal capacity direct labor nursing hours in routine services and it operated 120% times 20,000 normal capacity equipment hours in the laboratory. The lab allocates overhead
1. Set up a worksheet for applied overhead costs and volume variance with a column for Routine Services Nursing and a second column for Laboratory.
Set up a worksheet for actual overhead costs and budget variance with a column for Routine Services Nursing and a second column for Laboratory
2. Set up a worksheet for volume variance and budget variance totaling net variance with a column for Routine Services Nursing and a second column for Laboratory.
Assignment Exercise 17–2: Three-Level Revenue Forecast

Assumptions: for the base level (most likely) revenue forecast, assume $200 per procedure times 4 procedures per day times 5 days’ equals 20 procedures per week times 50 weeks per year equals 1,000 potential procedures per year.
For the best case revenue forecast, assume an increase in volume of one procedure per day average, for an annual increase of 250 procedures (5 days per week times 50 weeks equals 250). (The best case is if the practice gains a particular managed care contract.)
For the worst case revenue forecast, assume a decrease in volume of 2 procedures per day average, for an annual decrease of 500 procedures. (The worst case is if the practice loses a major payer.)
Audiologists were designated as “eligible for physician and other prescriber incentives” as discussed elsewhere. Thus the updated service line was a logical move.
Assignment Exercise 17–3: Target Operating Income

Acme Medical Supply Company desires a target operating income amount of $100,000, with assumption inputs as follows:
• • Desired (target) operating income amount = $100,000
• • Unit price for sales = $80
• • Variable cost per unit = $60
• • Total fixed cost = $60,000
Compute the required revenue to achieve the target operating income and compute a contribution income statement to prove the totals.
Assignment Exercise 18–1: Estimate of Loss

You are the practice manager for a four-physician office. You arrive on Monday morning to find the entire office suite flooded from overhead sprinklers that malfunctioned over the weekend. Water stands ankle-deep everywhere. The computers are fried and the contents of all the filing cabinets are soaked. Your own office, where most of the records were stored, has the worst damage.
Assignment Exercise 18–2: Estimate of Replacement Cost

The landlord carries contents insurance that should cover the damage to the furnishings, equipment, and to the computers, and the insurance company adjuster will come tomorrow to assess the furnishings and equipment damage. However, your boss is sure that the insurance settlement will not cover replacement costs. Consequently, you have been instructed to prepare an estimate of what has been lost and/or damaged plus an estimate of what the replacement cost might be. How would you go about it? What would your summary of these losses look like?

Assignment Exercise 18–3: Benchmarking

Review the chapter text about benchmarking.
Required

1. Select an organization: either from the Case Studies in Chapters 27–28 or from one of the Mini-Case Studies in Chapters 29–31.
2. Prepare a list of measures that could be benchmarked for this organization. Comment on why these items are important for benchmarking purposes.

HSA 525 Week 8 Discussion Contract Negotiations and Risks and Operating Margins updated

“Contract Negotiations and Risks and Operating Margins” Please respond to the following:
• In the scenario, the contract negotiations between North Creek Healthcare and the community hospital concluded with an agreement on non-financial (legal) terms. Suggest the most critical element of the contract and the impact to the short-term and long-term operational strategy of a community hospital. Indicate the potential implications to the hospital’s financial targets.
• Imagine you work for a hospital where the operating margins have been consistently below national norms for the past three (3) years. Discuss one (1) key driver of the below average performance. Suggest one (1) strategy to improve the future management of the driver that you’ve discussed.

HSA 525 Week 7 Discussion The Budgeting Process and Capital Investment Decisions updated

The Budgeting Process and Capital Investment Decisions” Please respond to the following:
• Use the Internet or Strayer databases to research information related to the budgeting processes within the various types of health care organizations. Next, determine the most-effective budgeting approach for a hospital, indicating how this approach can lead to effective financial management of the facility. Provide support for your rationale.
• Assume that you are an administrator for a hospital, and you need to acquire a updated technology system so that you may comply with regulatory requirements. Create an argument to be presented to the leadership team in which you justify the need for your facility to invest in this updated technology. Then indicate the value to the organization and provide support for your argument.

HSA 525 Week 6 Homework 5 Ex 13-3, 13-4.1, 13-4.2, Ex 14-2, 14-3 updated

Assignment Exercise 13–3
As a follow-up to the previous Practice Exercise, updated assumptions are as follows:
1. Your unit’s gross charges for the period to date amount to $200,000.
2. The uniform gross charge for each procedure in your unit is $100.
3. The unit receives revenue from four major payers. The number of procedures performed for the period totals 2,000. Of that total, the number of procedures per payer (stated as a percentage) is as follows: Payer 1 = 30% Payer 2 = 40% Payer 3 = 20% Payer 4 = 10%
4. The following contractual payment arrangements are in effect for the current period. The percentage of the gross charge that is currently paid by each payer is as follows: Payer 1 = 80% [Medicare] Payer 2 = 70% [Commercial managed care plans] Payer 3 = 50% [Medicaid] Payer 4 = 90% [Self-pay]
Assignment Exercise 13–4.1: Forecast Capacity Levels

Prepare another Infusion Center Capacity Level Forecast as follows:

Assume the same three infusion chairs, but add another nurse for either four or six hours per day. How would this change the daily capacity level for number of patients infused per day?
Assignment Exercise 13–4.2
Prepare another Infusion Center Capacity Level Forecast as follows:

Increase the number of infusion chairs to four, and add another nurse for either four or six hours per day. How would this change the daily capacity level for number of patients infused per day?
Assignment Exercise 14–2: Cumulative Inflation Factor for Comparable Data
Revise Hospital 2’s projections by applying a cumulative inflation factor of 5% per year.
Assignment Exercise 14–3

The head of your department is a prominent researcher. A health research foundation has asked him travel to London to give an important speech at a conference. He will then travel to Paris to tour a research facility before returning home. Although his travel expenses are being funded by the foundation, he will still need to take along some personal money. Consequently, he asks you to figure the exchange rates for $500 and for $1,000 in both pounds and euros. He explains that he is trying to judge the spending power of U.S. dollars when converted to the other currencies so he can decide how much personal money to take on the trip.
Assignment Exercise 14–4: The Discovery

The Chief Financial Officer at Sample General Hospital has just discovered that the hospital’s Chief of the Medical Staff’s son Jason, a student at the local community college, is paid $100 per week year-round for grounds maintenance at the hospital’s Outpatient Center.

HSA 525 Week 6 Discussion Using Ratios as Performance Indicators and Inflation and Health Care Costs updated

“Using Ratios as Performance Indicators and Inflation and Health Care Costs” Please respond to the following:
• Suggest one (1) key financial ratio that a health care administrator should create a trend analysis for. Suggest one (1) key insight that may be gained by the administrator in regard to the performance of the organization. Provide support for your rationale.
• Use the Internet or Strayer databases to research the current and projected inflation rates and the related impact expected on health care costs. Next, assess the level of importance of one (1) key driver of the inflation of health care costs. Indicate how this inflation can be managed strategically in the future to minimize the financial impact. Provide support for your rationale.

HSA 525 Week 6 Assignment 2 Using Financial Ratios to Assess Organizational Performance updated

Assignment 2: Using Financial Ratios to Assess Organizational Performance
Due Week 6 and worth 240 points
Using the financial statements from your selected health care organization in Assignment 1, develop a financial plan for the next three (3) years.
Write a four to five (4-5) page paper in which you:
1. Suggest the financial ratio that most financial analysts would use to evaluate the financial condition of the company. Provide support for your rationale.
2. Speculate on the organization’s ability to meet its financial obligations as they come due. Provide support for your rationale.
3. Based on your ratio analysis, determine whether the profitability trends are favorable or unfavorable and explain your rationale.
4. Using financial ratio analysis, predict whether or not the company will be viable in five (5) years based on its performance over the past three (3) years. Provide support for your prediction.
5. Use at least two (2) quality academic resources. Note: Wikipedia and other Websites do not qualify as academic resources.
Your assignment must follow these formatting requirements:
• Be typed, double spaced, using Times New Roman font (size 12), with one-inch margins on all sides; citations and references must follow APA or school-specific format. Check with your professor for any additional instructions.
• Include a cover page containing the title of the assignment, the student’s name, the professor’s name, the course title, and the date. The cover page and the reference page are not included in the required assignment page length.
The specific course learning outcomes associated with this assignment are:
• Evaluate the financial statements and the financial position of health care institutions.
• Describe the overall planning process and the key components of the financial plan.
• Use technology and information resources to research issues in health financial management.

HSA 525 Week 5 Homework Ex 10-1, 10-2,10-3, Ex 11-1, 11-2, 11-3, Ex 12-1, 12-2, 12-3, 12-4, 12-5 updated

Assignment Exercise 10–1: Components of Balance Sheet and Statement of Net Income

Identify the following MHS balance sheet components. List the name of each component and its amount(s) from the appropriate MHS financial statement.

Current Liabilities
Total Assets
Income from Operations
Accumulated Depreciation
Total Operating Revenue
Current Portion of Long-Term Debt
Interest Income
Inventories
Assignment Exercise 10–2: Components of Balance Sheet and Income Statement

Refer to the Metropolis Health System (MHS) balance sheet and statement of revenue and expense in Chapter 28’s MHS Case Study. Patient accounts receivable of $7,400,000 is shown as net of $1,300,000 allowance for bad debts (8,700,000 − 1,300,000 = 7,400,000).
(1) What percentage of gross accounts receivable is the allowance for bad debts?
Assignment Exercise 10–3: Components of Balance Sheet and Income Statement

Refer to the Metropolis Health System (MHS) balance sheet and statement of revenue and expense in Chapter 28’s MHS Case Study. Property, plant, and equipment of $19,300,000 is shown as “net,” meaning net of the reserve for depreciation. If the $19,300,000 is reduced by $200,000 (meaning the reserve for depreciation has risen), what happens on the income statement?

If the reserve for depreciation has risen, that is the $19,300,000 is reduced by $200,000, it would mean that the net income would be lower.  A higher depreciation lowers operating income and this would be reflected on the income statement.
Assignment Exercise 11–1: Liquidity Ratios

Refer to the Metropolis Health System (MHS) case study in Chapter 28.

1. Set up a worksheet for the liquidity ratios.

The liquidity ratios are
2. Compute the four liquidity ratios using the Chapter 28 MHS financial statement
Assignment Exercise 11–2: Solvency Ratios
Refer to the Metropolis Health System (MHS) case study in Chapter 28.
1. Set up a worksheet for the solvency ratios.
2. Compute the solvency ratios using the Chapter 28 MHS financial statements
Assignment Exercise 11–3: Profitability Ratios

Refer to the Metropolis Health System (MHS) case study in Chapter 28.
1. Set up a worksheet for the profitability ratios.
The profitability ratios are: -
2. Compute the profitability ratios using the Chapter 28 MHS financial statements
Assignment Exercise 12–1: Unadjusted Rate of Return

Metropolis Health Systems’ Laboratory Director expects to purchase a updated piece of equipment. The assumptions for the transaction are as follows:
1. Compute the unadjusted rate of return using the original investment amount.
2. Compute the unadjusted rate of return using the average investment method.
Assignment Exercise 12–2: Finding the Future Value (with a Compound Interest Table)
Compute how much money will be in the account at the end of four more years. (Use the compound interest table found in Appendix 12-B.)
Assignment Exercise 12–3: Finding the Present Value (with a Present-Value Table)

Part 1—Dr. John Whitten is still figuring out his equipment fund. According to his calculations he needs $250,000 to be accumulated six years from now. John is now trying to find the present value of the $250,000. He continues to assume an interest rate of 5%.

Compute the present value of $250,000 accumulated fifteen years from now. Assume an interest rate of 5%. (Use the Present-Value Table found in Appendix 12-A at the back of this chapter.)
Part 2—John doesn’t like the answer he gets. What if he can raise the interest rate to 7%? How much difference would that make?
Compute the present value of $250,000 accumulated fifteen years from now assuming an interest rate of 7%.
Compare the difference between this amount and the present value at 5%.
Assignment Exercise 12–4: Computing an Internal Rate of Return
Dr. Whitten has decided to purchase equipment that has a cost of $60,000 and will produce a pretax net cash inflow of $30,000 per year over its estimated useful life of six years. The equipment will have no salvage value and will be depreciated by the straight-line method. The tax rate is 50%. Determine Dr. Whitten’s approximate after-tax internal rate of return.
Assignment Exercise 12–5: Payback Period
Based on the calculations, he should purchase Machine B. It would take approximately two and a half years (2.4 years) for the investment made in Machine B to be equal to the amount of cash originally spent buying the machine. It would take Machine A 3 years to pay back the money spent to purchase it. 

HSA 525 Week 5 Discussion Managed Care Contracting and Ratio Analysis updated

“Managed Care Contracting and Ratio Analysis”  Please respond to the following:
• From the scenario, interpret the operating indicators used to analyze the financial performance of the organization. Indicate specific ways in which this information will help management improve the performance of the organization. Provide support for your rationale.
• Assume that you are a hospital administrator, and one of your responsibilities is selecting financial ratios to be included on your management dashboard. Determine the two (2) most critical financial ratios for you to monitor at your facility, and indicate how each of these ratios would help you assess the current performance of your facility. Provide support for your rationale.