Chapter 1 Answers:
1. Why is financial management important to the organization?
It helps managers accomplish the purpose of the organization.
2. Distinguish between the purpose of healthcare management and the purpose of
health care financial management.
Module 2 Answers
Chapter 2
A. Questions
1. Explain the meaning of corporate status in relation to healthcare organizations,
and the advantages corporate status provides.
Healthcare organizations represent one, or often more than one corporation.
Corporate
Module 3 Answer Key
Chapter 3
1.
Explain the rationale for granting organizations tax-exempt status.
The government grants tax-exempt status to relieve the government of the
burden of providing the services (health care to charity care patients) or to
rew
Module 5 Answer Key
Chapter 6
1.
Why is it important for the healthcare manager to be able to classify costs a
variety of different ways?
Cost are classified in different ways for cost management, setting charges, and
profitability analysis.
2.
What is th
HAS 3170 Week 6 Answers
Chapter 7
1.
Is there a relationship between cost and price for any given product or service in
healthcare? Should there be?
There no longer exists much relationship between cost and price for any given
product or service in health
. Financial ratios are used to weigh and evaluate the operational performance of the firm.
TRUE
Bloom's: Understand
Difficulty: Intermediate
Learning Objective: 03-02 Ratios can be used to measure profitability; asset utilization; liquidity; and debt util
12. Heavy use of long-term debt can be of benefit to a firm.
TRUE
Bloom's: Understand
Difficulty: Intermediate
Learning Objective: 03-02 Ratios can be used to measure profitability; asset utilization; liquidity; and debt utilization.
13. Return on equity
43. In examining the liquidity ratios, the primary emphasis is the firm's
A. ability to effectively employ its resources.
B. overall debt position.
C. ability to pay short-term obligations on time.
D. ability to earn an adequate return.
Bloom's: Understan
46. Which of the following is not considered to be a profitability ratio?
A. Profit margin
B. Times interest earned
C. Return on equity
D. Return on assets (investment)
Bloom's: Understand
Difficulty: Intermediate
Learning Objective: 03-02 Ratios can be u
91. Refer to the figure above. The firm's debt to total asset ratio is
A. 56.1%
B. 26.7%
C. 33.33%
D. 55.6%
AACSB: Analytic
Bloom's: Apply
Difficulty: Intermediate
Learning Objective: 03-02 Ratios can be used to measure profitability; asset utilization; l
111. Refer to the figure above. The firm's inventory turnover ratio is
A. 10x.
B. 5x.
C. 0.4x.
D. 0.1x.
112. Refer to the figure above. The firm's fixed asset turnover ratio is
A. 3.1x.
B. 1.5x.
C. 2x.
D. 0.1x.
113. Refer to the figure above. What is Marn
116. Refer to the figure above. The firm's debt to asset ratio is
A. 44%.
B. 33%.
C. 19%.
D. 34%.
117. Refer to the figure above. Times interest earned for Marni Company is
A. 3x
B. 5x
C. 80x
D. 6x
118. Refer to the figure above. Fixed Charge coverage for
114. Refer to the figure above. Marni's quick ratio is
A. 0.79:1
B. 0.50:1
C. 1.84:1
D. none of these
AACSB: Analytic
Bloom's: Apply
Difficulty: Intermediate
Learning Objective: 03-02 Ratios can be used to measure profitability; asset utilization; liquidi
Exceptional Leadership
Leading With Conviction
Personal conviction:
is closely linked to vision because it conceptualizes a
leaders role.
How to move the organization from its current world to an ideal
world
derived from several sources and instilled
106. Refer to the figure above. Compute Marni's after tax profit margin.
A. 7.5%
B. 3.75%
C. 50%
D. None of these.
107. Refer to the figure above. Using the DuPont method, return on assets (investment) for
Marni is approximately
A. 200%
B. 7.5%
C. 3.75%
D
101. Refer to the figure above. Tew's quick ratio is
A. 1.5:1
B. 1:1
C. 2:1
D. none of these
AACSB: Analytic
Bloom's: Apply
Difficulty: Intermediate
Learning Objective: 03-02 Ratios can be used to measure profitability; asset utilization; liquidity; and d
99. Refer to the figure above. The firm's fixed asset turnover ratio is
A. 2.0x.
B. 1.6x.
C. 0.5x.
D. 1.3x.
AACSB: Analytic
Bloom's: Apply
Difficulty: Intermediate
Learning Objective: 03-02 Ratios can be used to measure profitability; asset utilization; l
Matching Questions
125. Match the following with the items below:
profits.
patterns.
A system of including inventory into cost of goods
1. DuPont System of
sold in which the items purchased last are written off
ratio analysis
first.
A phantom source of pr
400,000, inventory = $50,000 and current liabilities = $200,000.
A. current ratio = 0.5; quick ratio = 1.25
B. current ratio = 1.0; quick ratio = 2.0
C. current ratio = 1.5; quick ratio = 1.25
D. current ratio = 2.5; quick ratio = 2.0
AACSB: Analytic
Bloo
103. Refer to the figure above. The firm's debt to asset ratio is
A. 58%.
B. 33%.
C. 25%.
D. 48%.
104. Refer to the figure above. Times interest earned for Tew Company is
A. 6.8x
B. 10.5x
C. 25x
D. 11.5x
105. Refer to the figure above. Fixed Charge covera
105. Refer to the figure above. Fixed Charge coverage for Tew Company is
A. 23x
B. 13.6x
C. 1.3x
D. 8.0x
AACSB: Analytic
Bloom's: Apply
Difficulty: Challenge
Learning Objective: 03-02 Ratios can be used to measure profitability; asset utilization; liquidi
10 - 1
CHAPTER 10
Project Cash Flow Estimation
and Risk Analysis
Cash flow estimation
Financial risk basics
Project risk assessment
Project risk incorporation
The capital budgeting process
Copyright 2013 by the Foundation of the American College of H
Running head: FINANCIAL SYSTEM
1
FINANCIAL SYSTEM
Question 1
Financial markets help to efficiently direct the flow of savings and investment in
the economy in ways that facilitate the accumulation of capital and the
production of goods and services. The c
Chapter 13
Asymmetric Information
and Incentives
Copyright 2015 Health Administration Press
After mastering this material,
students will be able to
define asymmetric information and
opportunism,
explain why they are important and
common,
explain why th
CHAPTER 9
Capital Investment Decision Basics
Project classifications
Role of financial analysis
Time value of money
Project evaluation measures
Payback
NPV
IRR
Project scoring
Post audit
Capital Investment Basics
Capital investment decisions (capita
AACSB: Analytic
Bloom's: Apply
Difficulty: Challenge
Learning Objective: 03-02 Ratios can be used to measure profitability; asset utilization; liquidity; and debt utilization.
127. Given the balance sheet and income state for Simmons Maintenance Company,
or a given level of profitability as measured by profit margin, the firm's return on equity will
A. increase as its debt-to-assets ratio decreases.
B. decrease as its current ratio increases.
C. increase as its debt-to assets ratio increases.
D. decrease
128. Follies Bookstore, the only bookstore close to campus, had net income in 2005 of
$90,000. Here are some of the financial ratios from the annual report.
Using these ratios, calculate the following for Follies Bookstore:
a) Sales
b) Total assets
c) Tot
108. Refer to the figure above. The firm's return on equity is
A. 75%
B. 26.8%
C. 13.4%
D. 15%
AACSB: Analytic
Bloom's: Apply
Difficulty: Intermediate
Learning Objective: 03-02 Ratios can be used to measure profitability; asset utilization; liquidity; and
98. Refer to the figure above. The firm's inventory turnover ratio is
A. 10x.
B. 8x.
C. 2.7x.
D. 0.1x.
99. Refer to the figure above. The firm's fixed asset turnover ratio is
A. 2.0x.
B. 1.6x.
C. 0.5x.
D. 1.3x.
100. Refer to the figure above. What is Tew'