1. Each row or category must be explained fully. For example, what makes up the
ID: 2780905 • Letter: 1
Question
1. Each row or category must be explained fully. For example, what makes up the category and the importance of the category in the budget? Explain expected changes, fluctuations or figures that will remain the same.
2. Explain what elements make up the total figure for the Receipts from Operations, and so on in the rest of the categories as necessary. This must be done for each month and column in your table. Your itemized elements must be financially sound and correspond to the listed total figure for its respective month or time period from the chart
Provide a narrative conclusion on the overall financial project for the year. This portion for the project is very important. Financial data is only useful if healthcare managers understand what they mean, and explain them clearly and make operational recommendations for continued success. Your conclusion should include the following elements: 1. Your final conclusion should provide a narrative explanation of strategies for the next year based on your budget. In your narrative make sure to address how the total figures for each major category are influenced by the itemized figures, and what operational strategies need to continue or change to assure success. 2. If your organization is financially stable or growing, make strategic recommendations for continued success. For example, if you organization is doing financially well, list several ways you would recommend using the additional income to improve services, expand investment income, or expand services. 3. If your organization is not financially stable or has items that need improvement financially, make strategic recommendations that will attempt to remedy the financial dilemma. 4. Your last item to include is to identify potential risks, barriers, or changes that will influence your organization's financial health.
1st quarter $1,040,000 S920,000 120,000 $350,000 $1,050,000 S930,000 $1,060,000 S940,000 120,000 $340,000 Receipts from operations Patient Care Funding $300,00 1 930,000 558,000 120,900 968,000 Disbursements from opreations Labor Costs Tests Costs Supplies and admin Expenses Cash available from operations Other receipts Increase in mortage payable Sale of fixed assets Unrestricted income 11,000 174,000 1 ,000 580,800 39,65 39,00 #1,00 124 , 259,200 $50,000 $110,000 480,000 35,000 $515,000 $92,000 endowment $5,00 $37.000 $35,000 Total other receipts Other disbursements Mortgage payments Fixed-asset purchase $30,000 140,000 140,000 15,000 575,000 S175,000 Total other disbusrsements Net cash gain (loss) Beginning cash balance Cumulative cash Desired level of cash Cash above minimum needs 55,000 30,00 120000 1: 100,00 137,000 $187,000 100,000 187,000 $137,000 100,000 S37,000 137,00 $209,000 1 1 (financing needsExplanation / Answer
Part 1
Row 1 comprises Receipts from Operations.
The receipts from operations comprises of two components, which are the patient care receipts & additional funding received during the quarter.
Patient Care Receipts are expected to grow at a steady rate during the successive quarters. The additional funds are likely to be received at the same amount in the next 3 quarters.
Row 2 comprises Disbursements from Operations. They can be considered to be the direct cost in the provisioning of health care services by the firm. The Major portion of disbursements was towards Labor Costs. Owing to the increase in the volume of services, labor costs are expected to remain buoyant during the next 3 quarters of the year. Likewise, test costs & other administrative expenses are also likely to increase steadily. However, some additional cost control measures will be introduced during the 4th quarter which will likely control both test costs as well as supplies & admin costs.
Row 3 represents the cash generated from operations during the year. On account of steady additional funds received, and growing patient care business, the firm is expected to generate surplus cash throughout the year.
Row 4 Comprises Other receipts during the quarter. The Sale of Fixed Assets during the month of February was a onetime receipt during the quarter. The Same is not expected to recur during the year. Quarter 2 is likely to see a major fixed assets expansion plan, which is likely to be financed by way of mortgage. The same is a onetime event and is unlikely to recur. The third component in the row is income investment. Since the Cash Budget is expected to remain surplus, this component will remain steady during the successive quarters.
Row 5 considers the Net Gain/(Loss) during various periods. The Net Cash generated is expected to be buoyant during quarter 2, but may again be deficient during quarter 3 on account of higher mortgage payments. Quarter 4 is expected to see above average growth in net gain on account of cost tightening measures, and no major foreseen disbursements.
The firm continues to deploy additional funds at the end of each month towards investment purposes.
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Part 2
During Quarter 1, Receipts from operations comprises of Patient Care Receipts and additional funds received during the first quarter. These elements are expected to continue throughout the year.
Total Disbursements constitute Labor Costs, Test Costs and Supplies & Administrative Costs during the first quarter. These constituents are expected to be recurring in nature throughout the year.
Other Receipts comprised a onetime sale of fixed assets during the month of February. This is not expected to recur during the rest of the quarters. Other one time receipts are additional mortgage payables to be borrowed during the third quarter of the year. This amount will be borrowed to finance the acquisition of fixed assets during the quarter. The Same is not expected to recur during the successive quarter. The Third Component is unrestricted income in the nature of investment income. Additional cash at the end of previous periods will be continued to be deployed by way of investments. This income will be recurring throughout the year.
Other Disbursements include Funded Depreciation, which is a recurring cost throughout the year. Quarter 3 will likely witness repayments of previous mortgages outstanding, excluding the parts already paid back during the month of March. Other than these, a major fixed asset purchase is expected to be made during the third quarter of the year.
The year is expected to see a net cash gain despite mortgage repayments and fixed asset purchases. The Business is expected to depict strong growth during the year.
Conclusion:
The Patient Care business is likely to witness strong growth during the next year. The firm will endeavor to grow its position in the health care business. The Strong Cash Flow position will also put us in a position to cover the mortgage payments expected to be in the next year. The Additional cash flow generated will likely be used for investment purposes or retained as such to cover any contingency payables during the period. The Current focus of the firm is towards patient care and the business is expected to show strong growth during the next year. The Cost Control measures to be introduced during the last quarter will likely prove fruitful and give the firm more flexibility to increase profitability in the segment. The Savings should likely be used towards increasing the investment income as major capacity expansion has already been made during the current year. Demand cannot be expected to remain high as to warrant any further expansion.
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