Question

7 Test Your Knowledge What are the primary goals of financial management for not-for-profit health care organizations? What are the uses of profit for health care organizations? Finance Provision of analyses, concerning the acquisition and disposition of the organi- zations resources Goals of Financial Management 3. 4. Profitability-A trade-off always exists between maximization of expected profits and the acceptable level of risk Undertaking greater risk requires greater anticipated returns. Viability-A trade-off always exists between viability and profitability. Greater liquidity results in more safety, but lower profits Explain the relationship between finan- a. 5. cial risk and financial return. Why doesn't every person or organiza- 6. tion invest all available funds into the stock market, which has the highest b. expected return? What do accountants mean when they say "short-term" and "long-term"? Explain how an organization's liquidity and solvency are related. 7. 8. Test Your Knowledge Explain the primary functions of finance 1 2. Explain the primary functions of accounting

Answer 1

Ans) 1) Primary functions of Finance:

- FINANCING activities include transactions with lenders and owners.

- INVESTING activities generally include the purchase or disposal of productive assets.

- OPERATING activities relate to earning revenues and incurring expenses.

2) The primary functions of financial accounting are:

- To measure business activities of a company

- To communicate information about those activities to investors and creditors and other outside users for decision-making purposes.

3) The primary goal revolve around maximizing the organization's profit.

- In addition, they have goal to improve the health and well being of their communities, help to provide the highest quality healthcare services and minimize Mortality & morbidity.

- The overriding goals also include: Profitability & Viability.

4) They need profit for the expansion of the services to increase access to health care.

- In addition, they need profit to subsidize those patients who are unable to bear the cost of the services.

- They need new technology and to have money for emergencies.

- Also profits help to replace the old building and equipments.