...Making a Financial Case Understanding Financial Concepts Used To Inform Management Decisions 1: Understanding financial concepts used to inform management decisions 1.1: Explain the differences between capital and revenue expenditure, using examples Capital Revenue A capital expenditure is an amount spent to acquire or improve a long-term asset such as equipment or buildings. Usually the cost is recorded in an account classified as Property, Plant and Equipment. The cost (except for the cost of land) will then be charged to depreciation expense over the useful life of the asset. Within the Aneurin Bevan University Health Board we are governed by the ‘Financial Control Procedure – Capital Assets and Charges’ (Appendix 1). Section 4.2 of the procedure states: Capital expenditure is defined as expenditure which creates assets that are capable of being used for more than 1 year and: • Individually cost more than £5,000, or • Collectively cost more than £5,000, where the assets are functionally interdependent, have broadly simultaneous purchase dates and are under single management control, or • Form part of an IT network which collectively cost more than £5,000 and individually cost more than £250, or • Form part on the initial equipping and setting up cost of a new building, ward or unit irrespective of their individual or collective cost. Revenue expenditure is an amount that is expensed immediately—thereby being matched with revenues of the current...
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...ILM Level 5 Diploma in Management Making a Financial Case Gower College Swansea Student ID: CTT8599 Contents Introduction Page 3 Understanding financial concept used to Page 5 inform management decisions Be able to make a financial case to inform Page 19 a management decision Introduction Business and Partnership Unit The Business and Partnership Unit is client liaison team for of all existing and new partnerships with an ambition to deliver efficiencies and improve services. To evidence transparency of the Councils partnerships by implementing an approved monitoring regime. To provide co-ordination, administration and service delivery role of a number of key functions to both customers and staff within the Department of Culture Tourism Leisure and Sport in the City and County of Swansea. Vision Statement To be a functional section that through monitoring and support ensures that the key partner organisations are fulfilling their obligations in respect of the responsibilities identified with legal agreements. Acting as the partnership hub, the unit aims to ensure that all arrangements and public sector funding remain transparent and that key performance and compliance criteria are monitored and reported. To provide administrative and co-ordination and ensure that key assets in the Sport and Leisure portfolio are managed effectively...
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...c | | |1 |Understand financial concepts used to inform management decisions | | |1.1 |Explain the differences between capital and revenue expenditure using examples | | | |Starting up a business involves a considerable amount of research notwithstanding knowledge of the market you wish to compete but | | | |also the necessity to understand different terminology associated with financial management in order to run the business | | | |appropriately. | | | |Capital expenditure is money invested by a company to acquire or upgrade fixed, physical, non consumable assets, such as buildings, | | | |machinery and equipment or a new business. Assets acquired by incurring these expenditures are utilized by the business for a long | | | |time and thereby they earn revenue. Capital expenditure also incurred for the purpose of increasing profit earning capacity or | | | |reducing cost production. Sometimes this expenditure even not resulting in the increase of profit earning capacity but acquires an | | | |asset comparatively permanent in nature. ...
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...Decision-Making Case Study The looming changes in health care are a frequent topic in many meetings with health care providers. Budget cuts are not just a speculation but are a reality. Decision-making to provide quality patient care with less money is a challenge at best. The Informed Decisions Toolbox can assist administrators and managers with evidence-based decisions that will allow patients to receive the quality care they deserve while reducing expenses. The Informed Decisions Toolbox The Informed Decisions Toolbox (IDT) is the result of a research study to aid managers with making evidence-based decisions that improve organizational performance. The IDT has an approach of six steps to decision-making (Rundell, et al, 2007): (1) framing the management question, (2) finding sources of information, (3) assessing the accuracy of the information, (4) assessing the applicability of the information, (5) assessing the actionability of the evidence, and (6) determining if the information is adequate (p. 325). As a facilitator for the use of evidence-based research in decision-making, the IDT assists decision-makers with estimating how operational and strategic decisions will have an effect on the organization. Evidence-based decision-making is not new to the health care industry. Clinicians have incorporated evidence-based research for years when making patient treatment determination. The use of evidence-based research for decision-making in other realms of healthcare...
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...Running head: DECISION MAKING CASE STUDY Decision Making Case Study Lisa Powers HCS 514 University of Phoenix Decision Making Case Study Today’s healthcare organizations have the difficult task of maintaining adequate operations in the economic climate we live in. Budget cuts have hit all organizations in corporate America as well as the healthcare industry. Staying afloat in these economic times requires the implementation of difficult decisions, often including reduction of services. This has never been more prevalent than in the health care industry. Healthcare organizations are being hit hard. Hospitals and outpatient clinics are operating with budget deficits. Many organizations are now required to cut or eliminate clinical services in order to remain operational. Determining which clinical services should be cut requires managerial staff to make the difficult decision. Managers require tools that enable them to best make that difficult decision to best address the health care needs of the community served. The New York State Medicaid program is the largest single payer of healthcare in the state of NY to the tune of about $47 billion dollars (“Advocates,” 2008). New York has the nation’s highest total and per-patient Medicaid spending and must link spending to healthcare priorities. The number of uninsured patients has steadily increased over the past few years. Funding losses and projected increased operating expenses have left...
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...Operation Management Case study Making Hotplates A group of 10 workers were responsible for assembling Hotplates (instruments for heating solutions to a given temperature) for hospital and medical laboratory use. A number of different models of hotplates were being manufactured. Some had a vibrating device so that the solution could be mixed while being heated. Others heated only test tubes. Still others could heat solutions in a variety of different containers. With the appropriate small tools, each worker assembled part of a hotplate. The partially completed hotplate was placed on a moving belt, to be carried from one assembly station to the next. When the hotplate was completed, an inspector would check it over to ensure that it was working properly. Then the last worker would place it in a specially prepared cardboard box for shipping. The assembly line had been carefully balanced by industrial engineers, who had used a time and motion study to break the job down into sub assembly tasks, each requiring about three minutes to accomplish. The amount of time calculated for each sub assembly had also been “balanced” so that the task performed by each worker was supposed to take almost exactly the same amount of time. The workers were paid a straight hourly rate. And also the partially completed hotplate was placed on a moving belt, to be carried from one assembly station to the next. When the hotplate was completed, an inspector would check it over to...
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...Decision-making Case Study Tammy Paramore HCS/514 March 25, 2013 Norma Wright Decision-making Case Study Making decisions in the rapidly changing world of health care is stressful, possessing the correct information is crucial, determining the validity of information even more crucial. In addition, knowing where to obtain accurate information for making informed and reliable determinations will help make these decisions easier. A well informed decision made using the informed decision tool box increases the reliability for producing correct and profitable decisions. These actions will improve the efficiency of provided health care, increase stability, increase production, and decrease the amount spent on health care, in addition, improving the outcomes for both the organization and the patient. The Informed Decision Toolbox The informed decision toolbox (IDT), according to Rundell, et al, (2007), has six major steps to use when approaching difficult decisions. 1) framing the management question, 2) finding sources of information, 3) assessing the accuracy of the information, 4) assessing the applicability of the information, 5) assessing the actionability of the evidence, and 6) determining if the information is adequate (p. 325). The IDT system stems from a formal study to find ways to assist management in an efficient and more scientific approach to decision...
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...Decision Making Effective decision making is a key factor when managing an organization. Managers are often left to have to make crucial decisions every day that influence the operations, quality and success of his or her organization. The health care industry is one of the largest growing industries in the nation. Technology and advanced medical services point to the constant changes that are happening in the health care industry. The nation’s economy continues to change, and with these changes, health care costs have risen. The present state of the economy has had a major effect on health care across the nation. Individuals and families who receive Medicaid services have been especially affected in the health care system with budget cuts and reduced services. Gardner County Clinic has about seven offices located in Northern, California which provides services to low income communities and Medicaid recipients. The clinic provides primary health care and behavioral services which include prevention and education, early intervention and treatment, mental health, advocacy services and is committed to improving the health condition of children, adults and elderly. The Gardner County Clinic is not different when it comes to budgets cuts. The clinic’s budget has been reduced by 15% and this budgets cut have affected the clinic significantly. With the current budget constraint, decisions have to be made in regards to what clinical services should be eliminated or introduced or what...
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...Health care is one of the largest growing industries in the country. Technology and medical advancements attribute to the constant changes in the health care industry. The economy also continues to change, and with the changing economy health care cost continue to rise. Companies across the nation have either closed or moved to other countries. El Paso County Clinic is struggling to keep the doors open. Buduget cuts have affected the clinic tremendously. The El Paso County Clinic’s budget has been cut by 15%. The population affected by the budget cuts are Medicaid recepients. Medicaid recepients have a two-fold problem; reduction of benefits, and the reduction of services at the clinic. El Paso County Clinic’s recent budget cuts will force the administration to reduce and eliminate services. The El Paso County Clinic must address the current budget cuts by reducing, and or eliminating services, and continue to provide quality health care. The El Paso County Clinic has appointed a team to address the budget cut issues. The team will use the Informed Decision Toolbox to decide what is best for the clinic and the clients. The first step is to frame the question. The team will gather necessary information and frame questions regarding which services to eliminate, and which services to reduce. In framing these questions the specifics must be stated. What are the most utilized services in the clinic? How will service cuts and elimination affect the clients? What services can be outsourced...
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...Decision-Making Case Study Analysis Tara Thompson HCS/514 September 27, 2015 Steven Bonnell Decision-Making Case Study Analysis The healthcare industry is one of the largest industries in the country. As the healthcare industry continues to evolve, it continues to undergo many changes. Technology and medical advancements are two of the biggest changes that are consistent. The economy has its ups and downs and continues to change as well. As the economy changes, healthcare cost rises which can have an impact on many organizations. The many organizations either had to move, down sized, lay off staff or close. The Piedmont County Clinic has been struggling to stay in operation. Due to budget cuts the clinic has been affected tremendously. The Piedmont county clinic budget has been cut by 15%. The population that is mainly affected by the budget cuts are the Medicaid recipients. Medicaid recipients are affected in two ways, benefits are reduced and the services they receive at the clinic are reduced as well. The administration at Piedmont County Clinic are being forced to reduce or eliminate services that are provided to Medicaid recipients. In order for Piedmont County Clinic to continue to provide quality health care the administration has to address the budget cuts by either reducing or eliminating services that will unfortunately affect many Medicaid recipients. The Piedmont County Clinic has appointed a team of managers to plan and make decision...
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...Decision-Making Case Study Analysis Tara Thompson HCS/514 September 27, 2015 Steven Bonnell Decision-Making Case Study Analysis The healthcare industry is one of the largest industries in the country. As the healthcare industry continues to evolve, it continues to undergo many changes. Technology and medical advancements are two of the biggest changes that are consistent. The economy has its ups and downs and continues to change as well. As the economy changes, healthcare cost rises which can have an impact on many organizations. The many organizations either had to move, down sized, lay off staff or close. The Piedmont County Clinic has been struggling to stay in operation. Due to budget cuts the clinic has been affected tremendously. The Piedmont county clinic budget has been cut by 15%. The population that is mainly affected by the budget cuts are the Medicaid recipients. Medicaid recipients are affected in two ways, benefits are reduced and the services they receive at the clinic are reduced as well. The administration at Piedmont County Clinic are being forced to reduce or eliminate services that are provided to Medicaid recipients. In order for Piedmont County Clinic to continue to provide quality health care the administration has to address the budget cuts by either reducing or eliminating services that will unfortunately affect many Medicaid recipients. The Piedmont County Clinic has appointed a team of managers to plan and make decision...
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...Decision - Making Case Study Analysis HCS/514 Managing in Today’s Health Care Organizations August 28, 2015 Introduction The Agency for Healthcare Research and Quality (AHRQ) produced a set of developmental tools to aid decision makers in discovering and interpreting evidence related decisions. These developmental tools are to promote the use of evidence-based management within a health care setting. The informed decision toolbox was created to help merge the gap between evidence based research and decision making within an organization (Crump & Spurgeon, n.d.). These tools consist of six steps that will guide managers and decision makers in constructing well informed decisions. The steps are composed of; framing the question behind the decision, finding sources of information, assessing the accuracy of information, assessing the applicability of the information, assessing the actionability of the information and determining if the information is adequate are used by managers to consider if the decision they are making is well informed (Young, 2002). Framing Questions and Locating Sources By framing the question behind the decision, a manager must first identify what the decision is and then determine what information must be obtained in order to make a well informed decision. To properly make a well informed decision, a manager must frame a question that will properly translate what research must be conducted to begin research. The questions will be used...
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...I. Making Connections Case #14-6 1. Succinct statement of the facts: Social Konnections Inc (SKI) is a global internet company that runs a large social media networking web site. The major source of income for the company is from the advertisers who use the advertising space created by Social Konnection Inc. The amount an advertiser pays depends on the number of views or the number of clicks depending on the type of the contract. The company acquired Corporate Collaborations this entity manages private and public social media networks that earn its revenue providing corporate social network development and hosting services. The audit committee of the company has requested the company to hire a new audit firm with a better experience in auditing of public technology companies. 2. Auditing and reporting issues: Miss Kristine Drew is the senior auditor for this company and is responsible for auditing revenue. She should start by asking for reviews from the predecessor audit firm in order to identify any problems they faced and to incorporate appropriate actions in order to minimize those risks. Ms. Drew should start off by initially accessing the controls of the activity reports. If the controls are strong and the data could not be manipulated, then it can be presumed that the data is accurate if this is not the case, then Ms. Drew should take up the services of a professional to figure out a way and if it is still not possible then she should state the facts on the audit...
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...Managerial Decision Making, Case 2, Greetings Inc. Activity Based Costing |Case 2 | | Greetings Inc.: Activity-Based Costing | |This case is from the book: Managerial Accounting: Tools for Business Decision | |Making, 5th Edition | |Jerry J. Weygandt, Paul D. Kimmel, Donald E. Kieso | |©2010 | |And was answered by some students. | | | | | 1. Activity Based Costing benefits businesses that are more complex in nature. In this case, Greetings. INC has added a new product line, Wall Decor, which permits them to grow without expanding their physical stores; however, they have significantly raised their overhead costs by multiplying their cost drivers. Not to mention the fact that they have incorporated a largely automated system into their product line, which we know calls for an ABC system. The main reason to move to ABC though, I’d say, would be because it will allow management to make better decisions and move away from the “cash machine” and “lemonade stand” metaphor simply because overhead costs will be allocated in such a way that corresponds to either framed or unframed prints instead of considering the same overhead for both products. By doing so managers will be able to price the prints competitively while still maintaining a profitable margin. An activity-based costing system may be appropriate for Wall Décor, when overhead allocation based job-order costing provides product cost distortion. Wall Décor should change its costing system for selling its high volume...
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...of custody decision making which includes custody arrangements and visitation rights for the non-custodial party or close relatives of the child. These plans should be arranged in the best interests of the the child. In the case of the 9th scenario, our group agrees with the decision presented in the story of the case. David should receive sole custody with generous visitation for Kathleen. David and Kathleen were married for eight years and have decided to divorce as their understanding of the relationship matured to different directions. Both parents love their two children and respect each other. We believe David and Kathleen should have joint custody, where both parents will share legal...
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