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1. Find below a brief explanation about financial structure, financial policies, and financial management practices.
This list is by no means complete. Financial Policy Guidelines and Examples (https://www.propelnonprofits.org/resources/financial-policy-guidelines-example/) provides a more in-depth review of this subject.
What are some other structures, policies or financial management practices that you can identify in addition to what is provided below?
Financial Structure
Governance,
Tax Status,
Public ownership versus private ownership
Financial Policies
Acceptance of patients without insurance
Adherence to GAAP and/or GAGAS
What is the primary goal of profit maximization
Financial Management Practices
Profit distribution
Distribution of assets upon dissolution
Managerial control
2. Building upon the information discussed during week one, the Balance Sheet shows the organization’s assets, or things of value, and liabilities, or the amount owed against those items of value.
The difference between assets and liabilities is called the net worth or owner’s equity. The simple math or Accounting Equation is Assets = Liabilities + Net Worth.
What does the weekly readings say about this equation being kept in balance.
Explain this “balance concept”. Is there anything that financial managers have to do to maintain this balance?
The Income Statement also called the Profit and Loss Statement or the Statement of Revenue and Expense, states revenue at the amount earned, the expenses incurred to generate those revenues, and the difference between those numbers, which is called the Net Income.
Explain how the Income Statement relates to the operational budget? Are they the same thing?
Health Care Organization Financial Statements: Understanding Best Practices (http://blog.richterhc.com/health-care-organization-financial-statements-understanding-best-practices) is a great explanation of this concept.
