Financial Reports in Healthcare: A Comprehensive Analysis
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Instructions:
Financial Reports in Healthcare: A Comprehensive Analysis
Please describe three financial reports and their uses in healthcare (200 words minimum). On two different give your personal opinion to Kent Acheson and Jacob Grimes with a total of two pages Kent Acheson’s The Hottest Metric in Finance Return on Invested Capital (ROIC) is a metric companies are using to placate the demands of activist investors. ROIC is a quantitative measure of how companies allocate capital. ROIC is a measure “to show how much new cash is generated from capital investments” (Benoit, 2016, para. 6). ROIC= EBIT x (1-tax rate)(Debts+Equity)-(Cash+Cash Equivalents) ROIC is not perfect, in fact, “there are other efficiency metrics, such as return on equity, that are better for certain industries” (Benoit, 2016, para. 9). Some people believe ROIC is untrustworthy. There is no agreement even on how to calculate it. Aswath Damodaran, a finance professor at New York University, says ROIC is a “lazy shortcut for executives” and detailed cash flow from individual projects is needed (para. 11). ROIC is not the end all, be all of metrics; but, only one of many that could be used to evaluate a company’s value. Thank you, Dr Acheson. Reference Benoit, D. (2016). The Hottest Metric in Finance: ROIC General Motors placated activist investors with the help of return on invested capital. The Wall Street Journal. Retrieved from http://www.wsj.com/articles/the-hottest-metric-in-finance-roic-1462267809?mod=djem10point#:Rz4MBQDQhdGx-A Jacob Grimes There are a few different financial reports and they have many good uses in healthcare. The first report I will discuss is the balance sheet. A balance sheet presents a snapshot of the financial position of an organization at a given point in time. The balance sheet is also known as the statement of financial position. Since the balance sheet changes every day as a business increases or decreases its assets or changes the composition of this financing. For the business that have heavy seasonal demand can have balance sheets that look drastically different from month to month. The balance sheet lists, as of the end of the reporting period, the resources of an organization and the claims against those resources. The next report is the statement of cash flow. This report that has only been required since 1989 for for-profit businesses and 1995 for not-for-profit businesses. The report was created to have better information about a company’s cash inflows and outflows. It also details why the account is larger or smaller than that of the previous year in addition to providing detailed information on cashflows. The third report is the income statement and it summarizes the operations of an organization with a focus on its revenues, expenses, and profitability. The income statement is also known as the statement of operations or statement of activities. The income statement reports its operational data over a set period. Gapenski, L. C. (2012). Healthcare Finance : An Introduction to Accounting and Financial Management (Vol. 5th ed). Chicago, Ill: Health Administration Press.
Financial Reports in Healthcare: A Comprehensive Analysis
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Excellent Quality 95-100%
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Introduction
45-41 points The background and significance of the problem and a clear statement of the research purpose is provided. The search history is mentioned. |
Literature Support 91-84 points The background and significance of the problem and a clear statement of the research purpose are provided. The search history is mentioned. |
Methodology 58-53 points Content is well-organized with headings for each slide and bulleted lists to group related material as needed. The use of font, color, graphics, effects, etc. to enhance readability and presentation content is excellent. Length requirements of 10 slides/pages or less is met. |
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Average Score 50-85% |
40-38 points More depth/detail for the background and significance is needed, or the research detail is not clear. No search history information is provided. |
83-76 points Review of relevant theoretical literature is evident, but there is little integration of studies into concepts related to problem. Review is partially focused and organized. Supporting and opposing research are included. Summary of information presented is included. Conclusion may not contain a biblical integration. |
52-49 points Content is somewhat organized, but no structure is apparent. The use of font, color, graphics, effects, etc. is occasionally detracting to the presentation content. Length requirements may not be met. |
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Poor Quality 0-45% |
37-1 points The background and/or significance are missing. No search history information is provided. |
75-1 points Review of relevant theoretical literature is evident, but there is no integration of studies into concepts related to problem. Review is partially focused and organized. Supporting and opposing research are not included in the summary of information presented. Conclusion does not contain a biblical integration. |
48-1 points There is no clear or logical organizational structure. No logical sequence is apparent. The use of font, color, graphics, effects etc. is often detracting to the presentation content. Length requirements may not be met |
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