submit a draft proposal for Sections II and III. You will provide financial statement analyses, profitability ratios, and ratio analyses to support the capital budget proposal formulated in Milestone Three. You will also use financial calculations to support proposal recommendations and to explain the short- and long-term financial impact for the organization. The format should be a minimum of 2 pages in length. This milestone is graded with the Milestone Four Rubric.
Financial and Budgetary Considerations
Financial Statements: What financial statements will you utilize in making your proposal, and how will you use these statements?
Proposal Impact: What impact will your proposal have on the organization’s financial statements? Articulate the impact using appropriate terminology.
Flexed Versus Fixed: How would your proposal be different if using a flexed budget versus a fixed budget? In other words, how would the use of one type of budget versus the other impact your proposal, and how would your proposal impact the budget? (Evaluate the differences between a fixed and a flexed budget.)
Proposal Justification
Ratio Selection: What ratios will you use to support your proposal and why? Select the ratio or ratios that would be the most appropriate.
- Ratio Results: Calculate the selected ratios and articulate the results using accurate terminology. What do the results tell you about the viability of your proposal?
Short- and Long-Term Impact: Based on your calculations and financial statement analysis, determine the short-term and long-term impact on the organization and the organization’s financials. What is the short-term and long-term financial impact of your proposal for the organization? How can you plan to strategically mitigate the impact on the financials of the company, or how will your proposal help inform strategic planning in the short and long term?
How to solve
HCM 400 Moraine Valley Community College HCA Healthcare Capital Budget Proposal
Introduction:
In order to provide a well-rounded education to medical college students, assignments and examinations should cover a wide range of topics related to their field. This includes evaluating their understanding of medical concepts, their abilities to diagnose and treat patients, and their understanding of medical ethics and professional behavior. Additionally, assignments should also assess students’ abilities to analyze financial and budgetary considerations within the context of a medical organization. This involves analyzing financial statements, calculating ratios, and assessing the short and long-term impacts of proposed initiatives on financials and strategic planning. In this answer, we will discuss the relevant financial statements, the impact of the proposal on the organization’s financial statements, the difference between using a flexed budget versus a fixed budget, the selection of appropriate ratios, the calculation of ratios, and the short and long-term financial impacts of the proposal.
Answer:
Financial Statements:
In making our proposal, we will utilize three main financial statements: the balance sheet, the income statement, and the cash flow statement. These statements provide crucial information about the organization’s financial health and performance. The balance sheet will help us assess the organization’s assets, liabilities, and shareholders’ equity, providing a snapshot of its financial position. The income statement will enable us to evaluate the organization’s revenues, expenses, and net income, giving us insight into its profitability. Lastly, the cash flow statement will help us understand the organization’s cash inflows and outflows, allowing us to assess its liquidity and ability to meet its financial obligations.
Proposal Impact:
Our proposal will have several impacts on the organization’s financial statements. Firstly, it may affect the revenue and expense components of the income statement. If the proposal leads to an increase in revenue or a decrease in expenses, the organization’s net income will likely improve. On the other hand, if the proposal leads to additional expenses or decreases in revenue, the net income may be negatively impacted. Secondly, the proposal may impact the balance sheet. Depending on the nature of the initiative, it may result in an increase or decrease in assets, liabilities, or shareholders’ equity. Lastly, the proposal may affect the cash flow statement by altering the organization’s cash inflows or outflows. For example, if the proposal requires significant upfront investments, it may temporarily decrease the organization’s cash flow from operating activities.
Flexed Versus Fixed:
If we were using a flexed budget instead of a fixed budget, our proposal would have more flexibility in adjusting to changes in actual activity levels. A flexed budget allows for adjustments in revenues and expenses based on actual activity, providing a more accurate representation of the organization’s financial performance. On the other hand, a fixed budget is prepared based on a predetermined level of activity. If we were using a fixed budget, our proposal would need to align with the predetermined activity level, potentially limiting its flexibility and adaptability.
Proposal Justification:
To support our proposal, we will use various financial ratios that are relevant to the organization’s financial health and performance. These ratios will provide insights into profitability, liquidity, efficiency, and solvency, among other aspects. The selection of appropriate ratios will depend on the specific nature of the proposal and the organization’s priorities. For example, if the proposal aims to improve operational efficiency, we may focus on ratios such as return on assets or inventory turnover. If the proposal relates to financial stability, we may analyze ratios such as debt-to-equity ratio or current ratio.
Ratio Results:
After calculating the selected ratios, we can articulate the results using accurate terminology. For example, if the return on assets ratio is calculated to be 8%, we can interpret it as the organization generating 8 cents of profit for every dollar of assets. The results of the ratios will provide valuable insights into the viability of our proposal. If the ratios indicate improvements in profitability, liquidity, or other relevant areas, it suggests that the proposal is financially feasible and can contribute positively to the organization’s financial health.
Short- and Long-Term Impact:
Based on our calculations and financial statement analysis, we can determine the short-term and long-term impact of the proposal on the organization and its financials. In the short-term, the proposal may result in immediate changes in revenue, expenses, or cash flow. These changes may have varying effects on the organization’s financial performance, but the goal should be to achieve positive short-term results. In the long-term, the proposal should ideally lead to sustained improvements in the organization’s financials, such as increased profitability, enhanced liquidity, or strengthened solvency. To mitigate the impact on the financials or inform strategic planning, we can develop strategies to manage costs, optimize revenue streams, or reallocate resources effectively.
In conclusion, analyzing financial and budgetary considerations is an essential skill for medical professionals. By understanding financial statements, evaluating the impact of proposals on the organization’s financial statements, considering flexed versus fixed budgets, selecting appropriate ratios, calculating and interpreting ratio results, and assessing the short and long-term financial impact, medical students can develop a comprehensive understanding of the financial aspects of healthcare organizations.
