...Accounts Receivable Crisis Improvement Plan for Marysville General Hospital Accounts Receivable Crisis Improvement Plan for Marysville General Hospital The following information and data will be needed in order to formulate an improvement plan: * Complete list of all credit transactions with dates of issue and maturity * Profile demographics of debtors to include: occupation, sources of income, location and size of family * Documentation of received dates of payments from patients to the accounts receivable office * Documentation of time lapse between payment receipt and posting date The plan details for the process improvement plan for the AR department are as follows: AR MANAGEMENT IMPROVEMENT PLAN The table below outlines the specific objectives, activities assigned to each department, the personnel and offices involved, the resources, expected key result areas and target dates. OBJECTIVE | ACTIVITIES | PERSONNEL/OFFICES INVOLVED | RESOURCES/ KEY RESULT AREAS | WEEK | Classify existing accounts receivable and specify them as to current and outstanding | 1. Preparation of Aging of Accounts Receivable Schedule | Finance department | Finance department recordsFinance department personnel | 1st | Determine the lapse time involved between the receipt of payments from debtor/patient and the actual posting in the hospital’s bank account.To determinecauses of delay/too long average collection period | 2. Determining the details of the Average Collection...
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...As is mentioned in the “The CPA Journal”, “many studies suggest fraud is more likely to occur when someone has an incentive (pressure) to commit fraud, weak controls or oversight provide an opportunity for the person to commit fraud, and the person can rationalize the fraudulent behavior (attitude).” This is known as the fraud triangle. There are two types of fraud: fraudulent financial reporting and misappropriation of assets. For the first one, this kind of frauds came from the top management. Most of the pressures are the decline in earnings, which may influence the financing as well as the stock price. Moreover, the top management is afraid to get fired. At the same time, since the financial statement include many significant judgments or estimates, which maybe the opportunity for the top management to commit frauds. For the attitude, the top management displays a significant disregard for the financial report process. These factors will increase the risk of fraud. Secondly, misappropriation of assets, this kind of frauds came from the employees, such frauds like this may not have a great impact on the company. The employees with much more financial pressures when the economic situation getting bad. Moreover, the weak internal controls are the major source of opportunity to the employees; the examples include the inadequacy of the assignment of responsibility. And for the rationalization, the top management displays a significant disregard for controls and ethical conduct...
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...firms, Toshiba was hammered with the revelation that it has overestimated its operation income for about $1.2 billion during the past seven years. Its CEO and half of the board has resigned. This scandal represented the long-time existed problem with Japanese corporate culture. The management team is highly hierarchical and typical of so-called “autocratic management”. The board are made up of people who are working in the company, resulting in their chasing private interests rather than shareholder value or profitability. The management sees the company as their private field and entertainment expenses are very high. A management style like this exposed its flaw when Japanese economy slowed down and international competition intensified. Crisis brings improvement just like the Sarbanes-Oxley Act after Enron. Hopefully, Toshiba will impetus reform of corporate governance. One thing the author emphasized is that entertainment expenses should be taxed, or it will be bad for profitability when entertainment is still encouraged. (Cited from Bloomberg: http://www.bloombergview.com/articles/2015-07-29/japan-has-an-enron-moment-after-accounting-scandals) Metro: from safety problems to accounting problems Washington Metro has caught attention this January for the malfunction of a track-based electronic equipment, killing one passenger and injured scores of others. Since then it has been faced with multiple inquiries and investigations from outside, thus its financial management problems...
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...Butler Lumber Company Financial Proposal Analysis & Conclusions Based on the analysis on Butler Lumber’s financial statements (Exhibit 1), we conclude that, for sole trader companies like this, it has been growing fast for the past years, as shown in an increase of Sales from 19% in 1989 to 34% in 1990. There is also a slow and steady growth in net income. Butler Lumber uses most of its cash in inventory, occupying 179,000 out of 475,000. Also, stocks’ SAF is positive for 1988-1990 and 1990-1991, indicating that the company has too much inventory. Accounts receivable’s SAF of 1988-1990 and 1990-1991 show a considerable increase, therefore we conclude that the company is giving out a significant amount of credit to its customers. We consider BLC a healthy company with increasing current assets, but due to the fact that it is giving out too much credit to customers, plus too much inventory, Butler Lumber has bad liquidity and turnover. Cash’s SAF shows a negative number brought by decrease in liquidity that avoids its use against contingencies and debt repayment. BLC desires to keep a good relationship with its suppliers. However, right now they have given the company a considerable credit for delayed payment. In order to maintain a solid relationship with its partners, BLC is in great urgency to find other financing sources to pay the credit. This is one of the reasons for Mr. Butler’s desire to borrow money, both to expand his business and to pay the liabilities that...
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...Acknowledgement First of all, I am expressing my sincere great fullness to almighty to prepare this term paper, no noble achievement can be achieve by an individual term paper depends on the contribution of number of people specially their thoughtful guidance and suggestions to complete this term paper. I am indented for their kind recommendation, submission, direction, cooperative and their collaboration. I want to give my special thanks to the Academic Supervisor Professor Md. Didarul Islam, Department of Accounting for his support and enormous help, especially his guidelines throughout the period of preparing this term paper. Declaration I do hereby Solemnly declare that the work submitted in the term paper titled “Sources of Short-Term Financing in Bangladesh” has been carried out by me and has not been previously submitted to any other university, college, organization for an academic purpose or certificate or diploma degree. This work that I have submitted does not break any existing copyright and no portion of this report is copied from any work done earlier for a degree or otherwise. I further undertake to indemnify the department against any loss or damage arising from breach of the forgoing obligations. Md. Golam Kibria BBA(hon’s) Final Year Reg. No. 09101626055 Major: Accounting Supervisor’s Certificate This is to certify that the term paper on “Sources of Short-Term Financing in Bangladesh” submitted for the award of the Degree of Bachelor of Business Administration...
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...Rick Anderson Carlos Aparicio Edlyn Tjhatra Sarah Yoon Executive Summary of Recommendation Nelson Jones is the founder and sole owner of Jones Electrical, a company that supplies electricians and general contractors with electrical components and tools. At present, the company is facing a solvency crisis as the availability of cash has been decreasing. As the supply of cash has not kept up with rising expenses, Jones Electrical has needed to rely on a line of credit at the local bank. However the cash needs have surpassed the current supply as the needed line of credit continues to rise. So far, Jones Electrical’s financial needs have been met by Metropolitan Bank; however, this growing company is considering shifting to Southern Bank and Trust in order to gain access to a larger line of credit. While Metropolitan Bank offers a $250,000 line of credit, Southern Bank and Trust may be willing to extend a $350,000 line of credit. There are several recommendations that Jones Electrical should take action on in order to remain solvent and continue their company growth. Jones Electrical will need to increase its line of credit. Therefore, we would first have Jones Electrical move forward with acquiring the new line of credit from Southern Bank and Trust. We also recommend that Jones Electrical keep the current growth and momentum of the company, reform the compensation model for his salespeople, forgo supplier discounts to retain cash for a longer period, refrain from re-paying...
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...Deutsche Brauerei should best proceed in the future, to achieve optimum financial results. Specifically, Schweitzer needs to consider what her position is on adopting the company’s financial projections for the future, the firm’s dividend policy and the compensation package that should be offered to the leader of international expansion, Oleg Pinchuck. There are other areas of Deutsche Brauerei’s operations however, that it appears worthwhile for Schweitzer to assess. These include Deutsche Brauerei’s practise of taking on excessive short-term debt, and the subsequent effect that has on the firm’s working capital. A further impact on Deutsche Brauerei’s working capital could be as a result of the effect of Pinchuck’s extremely relaxed accounts receivable in Ukraine. Finally, Schweitzer should evaluate the benefits and shortfalls of the firm’s aggressive expansion into Ukraine. Dividends Declaration Policy: Deutsche Brauerei is currently enjoying a high growth rate in sales, for 2001 the projected growth rate is approximately 48%. It is unusual that a firm that is so successful at generating sales is taking on such a large amount of short-term debt. One of the principle reasons Deutsche Brauerei has such a large amount of short term borrowings is the pressure they are put under to provide such a substantial dividend payment to shareholders. The largest financial demand’s the firm is currently facing is that they require EUR 7 million for investment in new plant and equipment in...
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...working capital policy that will address their cash management needs for the long-term. Situation Analysis Issue and Opportunity Identification Lawrence Sports’ principle customer, Mayo Stores, is having a difficult time paying for the products on time. The current payment arrangement is that Mayo will pay 20% on purchases and 80% the following week. Mayo depends principally on this revenue from Mayo and it finds itself not being able to live up to the agreements made to their agreements to both creditors and suppliers. The only viable option detailed in the scenario is borrowing from Central Bank. Their plan is to borrow a daily loan for any amount to keep the account minimum of $50,000. Lawrence has reached the maximum amount that can be borrowed, which is $1.2 million. Lawrence cannot afford to keep using the bank to bail them out during the low peak times of cash conversion usually occurring in the last few weeks of March. Using Central Bank to finance their operations has negative consequences. First, Lawrence has to come up with $1.2 million at 16% interest to bring the total to $1,392,000...
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...covers the following areas: * To Study the working capital policies of the sample company. * To study the structure of working capital. * To measure the utilization of working capital of the sample company. * To examine the impact of working capital on profitability. * To identity the problems facing the sample company. * To suggest the recommendation of measuring working capital Management efficiency. Scope of the Study: In my term paper the sample size was one and M.M. ISPAHANI Ltd. was selected as a sample and my topic was working capital management. For gathering more about my requirements I have scheduled my time in various departments, such as Department | Days | Executive Officer | 07 | Finance & Accounts | 15 | Marketing & Sales | 05 | Purchase | 05 | Import & Export | 05 | Administration | 03 | Methodology of the Study: In order to accomplish the term paper report in the...
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...Chapter 5 REVENUE AND MONETARY ASSETS Changes from Tenth Edition The chapter has been updated. The SEC’s SAB101 Revenue Recognition tests have been added. Approach The sequence of transactions for accounts receivable and bad debts often causes difficulty; indeed, the time that one is sometimes forced to spend on this topic is all out of proportion to its importance. Students often do not understand why an Allowance for Bad Debts account is necessary at all; they do not grasp the notion that although we feel reasonably sure that some accounts will go bad, we do not know which ones they will be. Even when they do understand this, the chain of transactions involved in estimating bad debts, writing off specific accounts, and booking bad debts recovered, is complicated and not easy to follow. If experience is any guide, it is quite likely that at the time this chapter is taught the press will be describing a company that has gotten into trouble for overstating its revenue or understating its bad debt or warranty allowance. Discussion of such a situation would be interesting. Cases Stern Corporation (A) is a straightforward problem in handling accounts receivable and bad debts. MacDonald’s Farm, by contrast, has few technical calculations but provides an excellent opportunity for a realistic discussion of alternative ways of measuring revenue and of valuing assets. Joan Holtz (A) is a different type of case. It is a device for raising several discrete, separable...
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...termpaperwarehouse.com/essay-on/Working-Capital/53803 * http://www.termpaperwarehouse.com/essay-on/Minimizing-Working-Capital/30029 * http://www.ing-wholesalebanking.com/insights/assets/pdf/research/1482.pdf * http://smallbusiness.chron.com/effect-revenue-increase-working-capital-42574.html * Working Capital * In business accounting, working capital is a benchmark measure of your company's ability to meet its short-term obligations. It's calculated by taking your business' current assets and subtracting its current liabilities. Current assets are those that can or will be converted to cash in the next year. The major current assets are cash, accounts receivable and inventory. Current liabilities are obligations that must be fulfilled within the next year. For a typical company, the major current liabilities are accounts payable, accrued liabilities (such as wages earned by workers but not yet paid, or rent expenses incurred but not paid), and debt payments. When current assets exceed current liabilities, a company has positive working capital. That's good. When it's the other way around, the...
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...Operating Revenue: Accounts Receivable Crisis HSM 543 Health Service Finance I have conducted several evaluations into our current issues of improving the financial well-being of our hospital. I have several ideas that would create positive revenue and decrease quality assurance issues. I have a few considerations on how we could improve and reinforce our current accounts receivables issues. It will take the assistance from many of the departments such as admissions/registration, chart documentation, claims processing, payment posting, charge capture, and secondary billing/patient follow up. These areas are critical for the modifications to have sustaining results. A clerk added to the night shift from 11pm to 7 am would drastically reduce errors in registration and admissions. This allows for the emergency room staff to concentrate on their jobs which is taking care of the patients. The proper registration and insurance information allows the registration clerk to bill the right insurance company based on the codes documented for that company and patient. This action would need to be budgeted for and several interviews done to locate two experienced clerks from the current pool or two new hires. Also, adding new management software would create a log of changes, errors, overrides, etc. that a knowledgeable Quality Assurance Manager can use to provide check and balance. These improvements would reduce the errors in admissions and claims processing. The next area...
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...overall economy was in decline, with the Dow Jones Industrial Average decreased by 40% relative to 2007. Besides the competitive market, there was also a collapse in the Auction rate market. Moreover, both Linda and Jon agreed that a wider credit crisis would negatively impact 2009 sales. From the VSI’s data, we could know that if there was 10% growth in revenue for 2009, it would result in revenue of $65743, which is $ 6948 above break-even revenue. In 2008, the revenue is $ 59766, which is $ 971 more than 2009 break-even revenue, $58795. Therefore, if VSI’s 2009 revenues fall more than 2% below 2008’s, the organization will have to begin cutting costs to remain within budget. c. What debt ratio has historically been most important for VSI? What constraint will maintaining or improving this debt ratio places on VSI’s operations in 2009? Management of cash and working capital was a critical issue for this small, rapidly growing company. VSI’s long operating cycle and high growth rate required VSI to finance this growing investment in working capital through short-term borrowing against the value of its accounts receivable and inventories. From 2005-2008, VSI ensured the debt ratio between accounts receivable plus inventories and accounts payable plus notes payable does not exceed 1:1. From 2005 to 2008, VSI’s debt to asset ratio increased from 39% to 44%, and the debt ratio was relative constant after 2006. Jon felt that...
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...12/10/13 Cash and Receivables Print this page ACCOUNTS RECEIVABLE 3. Define receivables and identify the different types of receivables. Receivables are claims held against customers and others for money, goods, or services. For financial statement purposes, companies classify receivables as either current (short-term) or noncurrent (long-term). Companies expect to collect current receivables within a year or during the current operating cycle, whichever is longer. They classify all other receivables as noncurrent. Receivables are further classified in the balance sheet as either trade or nontrade receivables. Customers often owe a company amounts for goods bought or services rendered. A company may subclassify these trade receivables , usually the most significant item it possesses, into accounts receivable and notes receivable. Accounts receivable are oral promises of the purchaser to pay for goods and services sold. They represent “open accounts” resulting from short-term extensions of credit. A company normally collects them within 30 to 60 days. Notes receivable are written promises to pay a certain sum of money on a specified future date. They may arise from sales, financing, or other transactions. Notes may be shortterm or long-term. Nontrade receivables arise from a variety of transactions. Some examples of nontrade receivables are: 1. Advances to officers and employees. 2. Advances to subsidiaries. 3. Deposits paid to cover potential damages or losses. 4. Deposits...
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...profile of the ABC Company based on current economic and industry issues. In order to help out the CEO I prepare reports that will contain the information regarding the project. These statements refer to the accompanying Excel spreadsheet as well as word documents. The statements are; Cash Flow statements, Product Cost, Net present value, Depreciation, Contribution Margins and Break-even Point of sales. In the last conclude the major risk factors in this project, management accountant responsibilities of the project and recommendations. I. An overall risk profile of the company based on current economic and industry issues that it may be facing. It’s a mystifying time to be in the manufacturing industry. After a severe global financial crisis hasten merchandise prices and flounce to the side a year detonation, a promising revival give the industry reason to hope. But the global economy has degenerated into another less severe downturn in 2011, hindering global demand and forcing down merchandise prices once again. The move of the industry focusing on all over the risk based on current economic and industry concerns. Many industry leaders consider that current decline is a predicament of composure added in a catastrophe of basics. Economics and goods prices may be beyond the control of the industry, but an assortment be able to be achieved through good administration have spectator the initial economic predicament. The major risks that management is likely to face in 2012 are...
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