1) Aggressive working capital policy

May increase the entity’s return, but it also increases the risk
      
      
      

2) A firm has the following accounts:

Net patient revenue = $1,500,000
Supply expense = $200,000
Depreciation expense = $100,000
Salaries and benefits = $700,000
Other expenses = $200,000
Net accounts receivable = $150,000

3) A hospital issues $20 million in bonds and $60 million in equity to finance a new project. Its targeted debt to equity ratio is:

50%
      
      
      

4) They are both considered current assets
      
      
      
      

5) The breakeven point occurs where:

Total fixed costs and total revenue intersect
      
      
      
      

6) A statement that reports the revenues minus expenses of an entity is called:

Income statement
      
      
      
      

7) An imaging center has the following information:
Revenue per test: $225
Variable cost per test: $150
Total fixed costs: $225,000
Estimated number of tests = 3,500

Calculate the a) Contribution Margin; b) Total dollar contribution margin; and, c) Contribution Margin percentage. Show Formula and Math
                   

8) Your hospital has the following revenue for the months of July-September: July $3,000,000 August $2,500,000 September $4,000,000. If 30% of the month’s revenue is collected in the same month, 40% is collected in the second month and 30% is collected in the third month, how much of July’s revenue is collected in August?                     .Show Formula and Math

9) Accounts receivables can constitute more than 50% of a healthcare organization’s current assets. Managing accounts receivables is critical to the cash flow of the organization. If you were a billing manager what should you consider when implementing credit and collection policies? (Hint: Provide an example of a financial report then explain in detail the steps in the financial analysis process).
                        Show Formula and Math

10) Provide an example of a financial report and then explain in detail the steps in the financial analysis process.  

11) A competitive hospital maintains current equipment and purchases new in order to stay current with the latest technology. If you were evaluating the capital budget performance of a hospital what factors would you consider justifying taking on more debt to purchase new equipment for a surgical unit? 

12) Explain in detail some of the biggest environmental challenges of the future for healthcare financial managers.
                         

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