Premium Essay

Financial Management Practices

In: Business and Management

Submitted By duggansgirl99
Words 713
Pages 3
Financial Management Practices
Good financial management is crucial for the expansion of any business. Successfully placing finances in order means a business can work more efficiently. One of the essential challenges in health care is to manage effectively the finances of the organization. Health care is unique in the way an organization operates based on the finances. This paper will identify effective and ineffective financial management practices that can help to make a company successful. Successfully managing the finances, such as budgeting and cash flow can mean the organization will always have enough money to pay any creditors and also have enough of a profit to operate the business.
Effective and Ineffective Financial Management Practices Too often managers have an understanding of their product but not the financial statements of the organization. The manager must have an understanding of what is happening within the organization. The success of the organization can only be ensured by focusing on the factors that affect the performance of the organization. Having and focusing on a plan is essential for the survival of an organization; more so in the health care world because of the many and different areas of revenue. One major area of concern in health care is the third-party payer system. Health care does not have a single billing system for all customers. Managers have to deal with rules and regulations and payment systems from many government and third-party payers (Gapenski, 2008).
Short-term financial management is mostly concerned with budgeting for one year. According to Gapenski, 2008 "The primary goal of short-term financial management is to support the operations of the business at the lowest possible cost” (p. 523). Long-term planning is generally strategic planning where an organization sets goals for growth and profitability in sales…...

Similar Documents

Premium Essay

Financial Management

...Lesson # 1 Financial Management: Introductory Notes and Words Concepts of Finance and Financial Management Financial Management refers to the proper management of finance functions of an enterprise or organization. In other words, financial management is concerned with the financial decision-making and other financial aspects. Thus, financial management involves financial planning, financial organization, financial coordination and control, financial reporting, financial mergers, combinations and acquisitions, insurance and tax management etc. Financial planning is concerned with the act of deciding in advance the financial activities that are essential if the enterprises are to achieve their financial goals and objectives. These financial activities mainly consist of properly estimating financial needs; selecting the proper sources of finances; procuring the requisite funds; proper utilization of the funds and custody and safekeeping of funds. Financial organization is the grouping of the finance functions into various divisions, departments, sections and sub-sections of the enterprises for their proper and efficient performance. That is, financial organization deals with the proper allocation of the finance functions amongst the various financial executives. Financial coordination and control deal with the proper adjustment of the finance function and evaluation of the same in relation to the predetermined standards. Financial reporting is the proper collection and...

Words: 2347 - Pages: 10

Premium Essay

Financial Management

...Introduction to Portfolio Management Investing in securities such as shares, debentures, and bonds is profitable as well as exciting. It is indeed rewarding, but involves a great deal of risk and calls for scientific knowledge as well artistic skill. In such investments both rationale and emotional responses are involved. Investing in financial securities is now considered to be one of the best avenues for investing one savings while it is acknowledged to be one of the best avenues for investing one saving while it is acknowledged to be one of the most risky avenues of investment. “It is rare to find investors investing their entire savings in a single security. Instead, they tend to invest in a group of securities. Such a group of securities is called portfolio”. Creation of a portfolio helps to reduce risk, without sacrificing returns. Portfolio management deals with the analysis of individual securities as well as with the theory and practice of optimally combining securities into portfolios. An investor who understands the fundamental principles and analytical aspects of portfolio management has a better chance of success. Portfolio Management An investor considering investment in securities is faced with the problem of choosing from among a large number of securities and how to allocate his funds over this group of securities. Again he is faced with problem of deciding which securities to hold and how much to invest in each. The risk and return characteristics...

Words: 1248 - Pages: 5

Premium Essay

Management Practices

...Management Practices at Amazon Fulfillment Center Aneshia Y. Glover MGT330: Management for Organizations Instructor Tracy Green September 30, 2013 Management Practices at Amazon Fulfillment Center No two businesses are run the exact same. Every business has a system that they follow when it comes to planning, leading, organizing, staffing and controlling. With each of these management practices comes different responsibility and the purpose they serve with the ultimate purpose of achieving organizational goals. I currently work at an Amazon fulfillment center which is a multibillion Fortune 100 company founded in 1994 headquartered in Seattle, Washington. Their mission statement is “to be Earth’s most customer-centric company, where customers can find and discover anything they might want to buy online, and endeavors to offer its customers the lowest possible prices” (Amazon, 2013). This particular company is one that works online selling well over thousands of different items from clothing, jewelry, books, shoes, electronics, even grocery items, anything you could possibly imagine! Not only do they sell their particular items, but they also hold an e-commerce platform in which they sell other retailers and individual seller items. One would ask how a company of this magnitude, with more than 45 fulfillment and customer service sites in North America could become so successful, but the answer lies at the beginning and how this establishment is run today. I......

Words: 2330 - Pages: 10

Premium Essay

Financial Mgmt Practice Exam

...PRACTICE FINAL EXAM (Answers provided at practice test’s end) The following questions are worth 3 points each. Provide the single best response. 1. The primary goal of a publicly-owned firm interested in serving its stockholders should be to |a. |Maximize expected total corporate profit. | |b. |Maximize expected EPS. | |c. |Minimize the chances of losses. | |d. |Maximize the stock price per share. | |e. |Maximize expected net income. | 2. Which of the following actions are likely to reduce agency conflicts between stockholders and managers? |a. |Paying managers a large fixed salary. | |b. |Increasing the threat of corporate takeover. | |c. |Placing restrictive covenants in debt agreements. | |d. |All of the statements above are correct. ...

Words: 2707 - Pages: 11

Free Essay

Health Care Financial Management Practices

...Health Care Budget: Financial Management Practices Andrew Ojo HCS/577 University Of Phoenix Health Care Budget: Financial Management Practices Budget involves pulling resources together to achieve a specific goal. According to Gapenski (2006), budgeting is an offshoot in a planning process. A basic managerial accounting tool use in holding planning and control functions together is referred to as set of budgets (p. 255). Most entities and organization create budgets as a guide for controlling its spending, predict how much profit, and it expenditure as they progress toward a set goal. One major setback manager or budget developer encounter is trying to design a future, a process that cannot be created with the precision just right. This article discusses some financial management practices considered most effective in creating and monitoring an operating budget. It also highlights some least effective financial management practices in creating and monitoring an operation budget. Most Effective Financial Management Practices in an Operating Budget Creating and monitoring an operating budget needs a careful consideration of so many factors, one of such factors is managing the finances. To do this, here are some of the most effective practices many organizations adopt in creating and monitoring budgets; * Having a corporate strategy Evaluating the progress of a budget is dependent on expenses and how resources are allocated. Because of this singular fact,......

Words: 1043 - Pages: 5

Premium Essay

Financial Management: Theory & Practice

... Study Guide Financial Management: Theory & Practice Fourteenth Edition Eugene F. Brigham University of Florida Michael C. Ehrhardt University of Tennessee ________________________________________________________________________________ Australia • Brazil • Japan • Korea • Mexico • Singapore • Spain • United Kingdom • United States Copyright 2013 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it. This is an electronic version of the print textbook. Due to electronic rights restrictions, some third party content may be suppressed. Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. The publisher reserves the right to remove content from this title at any time if subsequent rights restrictions require it. For valuable information on pricing, previous editions, changes to current editions, and alternate formats, please visit www.cengage.com/highered to search by ISBN#, author, title, or keyword for materials in your areas of interest. Copyright 2013 Cengage Learning. All Rights Reserved. May not be......

Words: 197028 - Pages: 789

Premium Essay

Financial Management

...and principles 4.1 K 4.2 S 5.1 K 5.2 K 5.3 K 5 6 Understand sustainable values 6.1 K 6.2 K Unit aim(s) The aim of this unit is to ensure that learners can apply the skills of literacy and numeracy in their work and gain skills of self-management and time management. Learners will also gain an appreciation of ethical issues and sustainability. 4 Title (and reference number) Level Credit value Learning outcomes The learner will… 1 Understand the principles of processing financial transactions Processing bookkeeping transactions 2 (Level 5 in Scotland) 9 (3 knowledge and 6 skills) Assessment criteria The learner can… Outline the purpose and content of these business documents:  Petty cash voucher  Invoice  Credit note  Remittance advice  Statement of account Explain the purpose and content of the books of prime entry List the ways in which customers may pay an organisation and an organisation may pay its suppliers Explain the accounting equation and how it relates to a double entry bookkeeping system Outline how the books of prime entry integrate with the double entry bookkeeping system Describe the function of a coding system within a double entry bookkeeping system Describe the processing of financial transactions from the books of prime entry into the double entry bookkeeping system Define capital income and capital expenditure Define revenue income and revenue expenditure Explain the difference between settlement, trade and bulk discount......

Words: 10263 - Pages: 42

Premium Essay

Financial Management

...Financial Management is one of the key disciplines necessary for the successful management of business corporations and other organisations. Studying the theories underlying Financial Management practices allows students to understand and explain the financial behaviours of corporations and other organisations. An understanding of the practices of Financial Management equips students with the knowledge and understanding necessary to apply this knowledge to real-life business situations. In an organisation financial management is split into its two principal roles. These are the accounting function, usually under the direction of the financial controller, and the corporate finance function directed by the treasurer. Accounting is concerned with the provision and interpretation of information for economic decision making. Accounting is itself split between management accounting - the internal facing function - which services the information needs of the organisation’s management and financial accounting - the external facing, highly regulated, function - which provides information for investors, the general public, regulatory bodies etc. The corporate finance function is concerned with managing the finances of the organisation and is involved in cash management, asset allocation, capital structuring and financial risk management in areas such as interest rates, foreign currency exchange rates and commodity trading. The programme is structured so that students......

Words: 271 - Pages: 2

Premium Essay

Management Practice

...MANAGEMENT PRACTICE S.A.I.M. S.A.I.M. CASE-STUDY WORKBOOK Prepared by Dr Norris W Dalton. Copyright 2002 SAIM Management Practice 1 Copyright @ 2002 - South African Institute of Management All rights reserved. No part of this publication may be reproduced or transmitted in any form by any means, electronic or mechanical, including photocopy, recording, or any information storage and retrieval system, without permission in writing from SAIM. Copyright @ 2002 Copyright 2002 SAIM First Edition (2002) Management Practice 2 MANAGEMENT PRACTICE CASE-STUDY WORKBOOK CONTENTS Page 1. Introduction. 5 2. Management in Context. 7 3. Learning to be a manager. 9 4. Case-study analysis. 11 5. Problem-solving and decision-making. 14 6. Caselets: First-line and Middle-management (Tactical/operational levels). 21 7. Case-studies: Executive / Senior management (transitional / strategic level). 119 8. Case-studies: Management failures (Reference studies). 173 9. Lessons: 201 Business {Managerial) Failure. 10. References and Further Reading. Copyright 2002 SAIM 207 Management Practice 3 Copyright 2002 SAIM Management Practice 4 MANAGEMENT PRACTICE Management Principles are easy; Management Practice is difficult. 1. Introduction The Theory of Management (20%) is easy and can be learnt in a classroom setting, since it relates to knowledge acquisition and......

Words: 40484 - Pages: 162

Premium Essay

Chapters 2 and 3 from Financial Management Theory and Practice

...EBITDA of $8 million and net income of $2.4 million. It had $2.0 million of interest expense, and its corporate tax rate was 40%. What was its charge for depreciation and amortization? EBT = Net Income/ (1-T) = 2,400,000/ (1-.40) = $4,000,000 Tax = EBT * T = $4,000,000 * 40% = $1,600,000 Dep. & Amort. = Earning after Interest but before Depreciation – EBT Dep & Amort. = $6,000,000 - $4,000,000 =$2,000,000 (2-5) Kendall Corners Inc. recently reported net income of $3.1 million and depreciation of $500,000. What was its net cash flow? Assume it had no amortization expense. Net cash flow = Net income + Depreciation Net Income = $3,100,000 Depreciation = $500,000 NCF = $3,100,000 + $500,000 NCF = $3,600,000 (2-6) . In its most recent financial statements, Del-Castillo Inc. reported $70 million of net income and $900 million of retained earnings. The previous retained earnings were $855 million. How much in dividends did the firm pay to shareholders during the year? Dividend paid = Beginning retained earnings + Net income of current year – Ending retained earnings=$855,000,000 + $70,000,000 - $900,000,000= $25,000,000 (2-7) The Talley Corporation had a taxable income of $365,000 from operations after all operating costs but before (1) interest charges of $50,000, (2) dividends received of $15,000, (3) dividends paid of $25,000, and (4) income taxes. What are the firm’s income tax liability and its after-tax income? What are the company’s marginal and average tax rates......

Words: 2214 - Pages: 9

Premium Essay

Fin630 – Financial Management Theory and Practice

...American Intercontinental University FIN630 – Financial Management Theory and Practice Unit 1 Individual Project November 12, 2011 Abstract This paper will present an analysis of the United Kingdom (U.K.) and the United Arab Emirates (U.A.B.) to determine both suitability and potential in each of the countries for a Greenfield project. This analysis will compare the financial conditions in each country as well as trade policies, currencies and cultural variables which could affect the project. This paper will also include a recommendation to the steering committee of Acme as to which may be the preferred country for the Greenfield project. Introduction To begin, I will give the definition of a Greenfield Investment: “A term which describes investment in a manufacturing or production plant in an area where little or no physical infrastructure or facilities exists” (Financial Glossary, n.d). In other words, building or establishing a plant or other type facility where there was nothing previously. The opposite would be considered a Brownfield Investment, which is established in or on existing facilities or grounds. Multinational enterprise Acme, is currently considering expanding their business globally by establishing a Greenfield facility in a foreign country. Foreign countries each have their own unique policies in regards to establishing a business, as well as their own cultural proclivities, currencies and laws. This paper will offer analysis......

Words: 1404 - Pages: 6

Premium Essay

Financial Management Theory and Practice

...ethically because any wrong doing on their part may lead to major financial troubles and law suits. Question e. What three aspects of cash flows that affect the value of any investment? The three aspects of cash flows that affect the value of any investment are the price of stock, the timing of cash flow, and their risk. The price of the stock depends on the size of the firm’s cash flow; the size and risk are affected by the financial environment. Question f. What are free cash flows? Free cash flows are cash flows that are readily available for distribution to all of the company’s investors, including creditors and stockholders. Question g. What is the weighted average cost of capital? Weighted average cost of capital (WACC) is the rate that a company is expected to pay on an average to all its security holders to finance its assets. Question h. How do free cash flows and the weighted average cost of capital interact to determine a firm’s value? The relationship between a firm’s value, its free cash flows, and its cost of capital can be determined by using intrinsic value, which is the sum of all future expected free cash flows when converted into present dollars. Question i. Who are the providers (savers) and users (borrowers) of capital? How is capital transferred between savers and borrowers? The providers of capital are Households and U.S. Government; the borrowers of capital are Non-financial corporations and Governments. Transfers of......

Words: 1428 - Pages: 6

Premium Essay

Financial Management: Theory & Practice

...Corporate Finance Problem Set 1 1) Calculate the indicated amounts and financial ratios for Big Apple Enterprises. Please indicate the formula that you used to calculate the amounts or ratios. It may be most efficient to transfer the problem to an Excel spreadsheet and perform the calculations there. | Big Apple Enterprises | | | (1) | ------------------------------------------------- (2) | | | | | ------------------------------------------------- Common Size the Balance Sheet and Income Statement | ------------------------------------------------- | ------------------------------------------------- 2010 | ------------------------------------------------- 2011 | | ------------------------------------------------- 2010 | ------------------------------------------------- 2011 | ------------------------------------------------- Total Assets | ------------------------------------------------- 50000 | ------------------------------------------------- 65000 | | ------------------------------------------------- 100% | ------------------------------------------------- 100% | ------------------------------------------------- Inventories | ------------------------------------------------- 6000 | ------------------------------------------------- 9000 | | ------------------------------------------------- 12.0 | ------------------------------------------------- 13.8 | ------------------------------------------------- Receivables |......

Words: 1213 - Pages: 5

Premium Essay

The Practice of Management

...Assignment THE PRACTICE OF MANAGEMENT BY PETER DRUCKER The introduction is titled “The Nature of Management” and features three chapters. The first chapter is titled “The Role of Management”. The first two sentences in this chapter might be the best definition of a manager anyone has ever written. Drucker states that “the manager is the dynamic, life-giving element in every business. Without his leadership the “resources of production” remain resources and never become production”. To me this sums up what being a manager is all about. Later in the chapter he says “from the peak there is only one easy way to go: downwards. It always requires twice as much effort and skill to stay up as it did to climb up”. A powerful statement, that many do not realize. The second chapter, titled “The Jobs of Management”, Drucker talks about how the jobs of management are usually not known by people within the company. People know who the managers are but aren’t quite sure what they do. He breaks down what a managers’ job involves into a couple of key areas. The first of which is “economic performance”. With this Drucker say that management must always put economic performance first in every decision and action they make because this will justify their existence. Other areas of this chapter focus on management functions which include: their first job is managing a business, managing managers and managing both worker and work. The third chapter is called “The Challenge to Management”.......

Words: 2971 - Pages: 12

Premium Essay

Financial Practices

...Reporting Practices and Ethics Paper HCS405 July 29, 2012 Professor C. Brew Reporting Practices and Ethics Paper Financial accounting and financial management are the basis for health care accounting. The GAAP is a cornerstone of all accounting practices. Financial management aides and guides health care accounting practices in today’s health care settings. These two elements are the building blocks for a solid health care organization. Without the two, there is risk of fraud and unethical practices within health care. In financial accounting there are four elements of financial management. The first element is planning. In the planning element of financial management, the objective is determined and then the steps needed to reach that objective are identified so that the goal of accomplishing the objective can be met. The second element of financial management is controlling. In controlling the goals set in the planning element are monitored to ensure that the goal is on track. In the controlling stage of planning, managers use reports to track the goals, compare information and to gain feedback on the status of the goals. Organizing and directing is the third financial management element. In this element the manager works daily to track the progress of the goals, reviews daily the results of the organizing and is active daily in the progress of the goals. The final element of financial management is decision making. In the decision making element the......

Words: 1271 - Pages: 6