Chapter 13 The Use of Social Media in NursingPitfalls and.docx

Chapter 13
The Use of Social Media in Nursing:
Pitfalls and Opportunities
Copyright © 2016 Wolters Kluwer Health | Lippincott Williams
& Wilkins
Copyright © 2020 Wolters Kluwer • All Rights Reserved
1
Social Media #1
A method to share and transmit information to a far-reaching
audience
Use of social media is on the rise (see Box 13.1)
A method to engage with that audience to:
Improve health outcomes
Enhance knowledge
Affect health care policy
Social Media #2
Promote causes and raise money
Stay connected to other nurses

Participate in professional organizations
Inform patients and caregivers and the public
Communicate with patients and colleagues
Perform research
Types of Social Media
Social Networks
Virtual network, virtual communities, or online communities—
all designated platforms that give others access to groups of
people outside their geographical boundaries
They provide a supportive environment. E.g., Facebook—public
and closed groups
Social Bookmarking Sites
Search, organize, individualize, and comment on Web pages of
interest
Digg.com
Reddit
Stumbleupon
Social News
Similar to Bookmarking, but helps users find top relevant news
articles
Links are organized, posted, and voted upon with the most

popular links at the top of the list.
Media Sharing
A software platform where users share
Photos/videos and other social components. E.g., YouTube
Most utilized form of media sharing
Microblogging
Media platform where users can post short comments and links
to their “wall”
E.g., Twitter
Must have a “handle”
Hashtag
#WeNurses
#HCLDR
Virtual Worlds
Computer-generated simulated settings where users can
Manipulate elements
Interact using an avatar
Purchase goods and services
Nursing has successfully used virtual worlds to educate nursing

students in public health and even a simulated birthing center
Question #1
Is the following statement true or false?
Microblogging is a social media platform where users can post
short comments and links to their “wall.”
Answer to Question #1
True
Microblogging is a social media platform where users can post
short comments and link to their “wall,” where others can view
or follow their comments.
True. Microblogging is a social media platform where users can
post short comments and links to their “wall”.
11
Wikis
Allow multiple users to post Internet-based content, modify
content, and create online communities
E.g., Wikipedia
While it is dynamic, it has open structure that can be modified
or authored by any user

Blogs (Weblogs)
A place where individuals can write comments or forums about
the topic of their choice
Usually focused on one specific topic area that promotes
discussion and engagement
E.g., WordPress
RTConnections
Digital Doorway
Social Media Use by Patients (How Nurses Can Support
Patients)
Empower patients in educating themselves with social media
The rise of the e-patient to seek out:
Current evidence
Engage others
Collaborate
Trustworthy sources of online information
The Nurse’s Role
Understand elements of digital citizenship
Not providing information about patients
Not providing medical advice online
Assess if patients are good candidates to self-educate on social
media (see Box 13.3)

Steer toward the informed sources
Consider if patient has access
Troubleshoot with them
Question #2
Which of the following is a nursing role in social media?
A. Troubleshoot with patients
B. Consider if patient has access
C. Assess good candidates to educate on social media
D. All of the above
16
Answer to Question #2
D
All are within the role of nursing.
Pitfalls of Social Media and Nursing
Can also be unpredictable, dangerous, and harmful at times for
patients and nursing due to:
Breaches of privacy—HIPPA

Anonymity
False “cures”
Nurses “friending” patients
Personal scrutiny (see Boxes 13.4 and 13.5)
Social Media in Nursing Practice Benefits
Enhance practices
Education and research
Promote self-management for patients with chronic illness
Support
Excellent platform for training
Research—nursing and patients
See Box 13.6
End of Presentation
ASSIGNMENT
Finance and Accounting
Senior Accountant Analysis

1
DUE DATE
Week 5
STRAYER UNIVERSITY | COPYRIGHT © 2016. ALL
RIGHTS RESERVED.
SHAUN’S CRITERIA
Hi Team,
I wanted to provide you some guidelines as you determine how
we’ll finance our
expansion. Please give this careful consideration, as we need to
get this right.
1. I estimate we’ll need $150,000 to increase capacity in order
to stock the five
additional pop-up stands
2. We’ll need to make sure we have additional funds available
to increase our
marketing efforts to stimulate demand
3. Cash flow is going to be tight, so I’d like to minimize
interest payments
4. I’d like to maintain or increase our profit margins
5. Since I don’t have a lot of experience with big discount
retailers, I’d like to add a
thought partner with experience in this channel
6. If we’re successful over the next two years, we’ll likely seek

additional capital to
expand into more stores, so I’d like to do all we can now to
enhance our
credibility
We need to move on this quickly, so I’d like an answer by the
end of the week.
-Shaun
RIGHTS RESERVED. 2
FINANCING OPTIONS
Option 1: Equity
Raise $150,000 from a venture capital firm in exchange for 30%
of the company
Option 2: Debt
Secure a loan of $150,000 at a 10% annual interest rate, to be
repaid over 7 years
Option 3: Debt + Self-Financing
Secure a loan of $100,000 at a 7% annual interest rate, to be
repaid over 7 years, and self-
finance the remaining $50,000
JUNIOR ACCOUNTANT EMAIL

Hi,
I’m working on expenses from the last quarter for the revised
income statement, but I’m
unsure of what to do next. I grouped similar transactions to
compile the following list:
How would you like me to proceed given where we are in the
process? Thanks in advance
for your guidance.
Best,
Jenna S.
• automotive maintenance cost
• travel expenses
• training and development costs
• office rent
• raw material purchases
• inventory purchases
• marketing expenses
• payroll expenses
• interest expenses
• technology purchases
• office supplies expenses

RIGHTS RESERVED. 3
SUNSTRUCK SUNGLASSES
INCOME STATEMENT
For Year Ended September 30, 2016
REVENUES
Sales revenues
Other revenue
Total revenue
COST OF GOODS SOLD (COGS)
GROSS PROFIT
EXPENSES
Selling, general and administrative expenses
Marketing and advertising expenses
Total expenses
INCOME FROM OPERATIONS
OTHER EXPENSES
Interest expense

$778,590
$11,000
$789,590
($428,225)
$361,365
($78,959)
($55,271)
($153,050)
$208,314
($51,000)
$157,315
Income tax expense
NET INCOME
PRETAX INCOME
($55,060)
$22,500
Depreciation and amortization ($18,820)
$102,255NET INCOME

4 STRAYER UNIVERSITY | COPYRIGHT © 2016. ALL
RIGHTS RESERVED.
BALANCE SHEET
At September 30, 2016
ASSETS
CURRENT ASSETS
Cash
Accounts receivable
Merchandise inventories
Total current assets
LONG-TERM ASSETS
Property, truck and equipment
TOTAL ASSETS
LIABILITIES
CURRENT LIABILITIES
$145,500
$468,000

$613,500
$37,500
LONG-TERM LIABILITIES
Truck loan
Accounts Payable
$28,000
$55,220
$62,280
$40,000
B+M loan $360,000
Total long-term liabilities
TOTAL LIABILITIES $479,500
SHAREHOLDERS’ EQUITY
CONTRIBUTED CAPITAL $12,000
RETAINED EARNINGS
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY
TOTAL SHAREHOLDERS’ EQUITY
$122,000

$442,000
$134,000
$613,500
Operating loan $42,000
RIGHTS RESERVED. 5
$75,000
STATEMENT OF CASH FLOWS
For Year Ended September 30, 2016
CASH FLOWS FROM OPERATING ACTIVITIES
Cash collected from customers
Cash paid to suppliers and employees
Cash paid for interest
Cash paid for taxes
Net cash provided by operating activities
CASH FLOWS FROM INVESTING ACTIVITIES
Cash paid on truck loans

$99,140
($20,000)
($529,580)
($50,000)
($55,060)
$733,780
Net cash used for investing activities
CASH FLOWS FROM FINANCING ACTIVITIES
Cash received from operating cash loan
($60,000)
$12,000
NET INCREASE IN CASH DURING YEAR
CASH AT BEGINNING OF YEAR
Net cash provided by financing activities
($23,255)
CASH AT THE END OF YEAR TO DATE $27,885
$12,000
$51,140

Cash paid on B+M loans ($40,000)
STRAYER TALKS: FINANCE WITH SUNSTRUCK
SUNGLASSES
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As we learned in this week’s Strayer Talk, businesses like
SunsTruck have a number of options available to them when
they are looking to secure financing in order to grow the
company. It’s important to know that the best option for a
business at any given time can be different based on a number
of factors. Each financing option—whether it’s self-financing,
debt, or equity—comes with certain benefits and drawbacks that
must be carefully considered.
Equity Financing
Have you ever seen Shark Tank? On this hit TV show,
entrepreneurs and small business owners pitch their ideas to a
group of celebrity investors in hopes that they will invest
money to help the businesses grow. Each business owner talks
about their idea, what makes it unique, how the business is
doing so far, and how financially successful it’s been. After the
entrepreneurs’ short presentation, the investors, known as
“sharks,” ask hard questions to see if the idea is worth their
investment.
The really fun part comes at the end. Each company comes in
with an investment amount it is hoping to get—for example,
$150,000. If the sharks are interested in investing in the

business, they will negotiate with the business owner for how
much of the company they will own for that amount of money.
If the business owner thinks the business is worth $1,500,000,
and the shark agrees, then the shark will ask for at least 10% of
the company in exchange for the $150,000. This is because
$150,000 is 10% of a company that is worth $1,500,000.
Shark Tank has shown people across the country how equity
financing works.
Equity is another word for “ownership.” In the real world of
day-to-day business, a business often sells part ownership of the
company in order to raise money. Before a business decides to
give up equity in exchange for financing, it needs to consider
the pros and cons. The table below is a summary of some of the
most important things to consider about equity financing.
EQUITY FINANCING
PROS
CONS
· There is no obligation to pay back the initial investment
money
· There is no interest to pay
· Investments enhance the business’s credibility
· Investors may provide ideas, resources and know-how in
addition to money
· Businesses give up partial ownership
· New owners mean that other people have a say in the
operations of the company
· Equity is expensive relative to borrowing money – you give up
a portion of future profits versus a fixed loan amount
· When profits are shared, there is no tax benefit to the business
because payments or distributions to investors are not
deductible as expenses on the Income Statement (interest
payments on debt, however, are deductible)
Debt Financing
Debt financing is probably very familiar to you. In all
likelihood, you’ve had an experience with debt in your personal

life. You may have taken out a car loan or a mortgage, or
opened up a credit card with a bank.
In each of these cases, you borrow money for a significant
purchase with the guarantee that you’ll pay the money back over
an agreed upon period of time. Typically, you agree to pay back
the money with interest—the cost to you for borrowing the
money.
In the same way, businesses can borrow money to finance their
operations. They can take out a loan from a financial institution,
open a line of credit, or—as in the case of Shaun and Rachel—
get a start-up loan. Start-up loans are typically funded by
community organizations or governments and offer better terms
than what’s available through traditional banks. These groups
offer loans with good terms because they have a specific goal in
mind, such as encouraging the development of new businesses
in a city.
Like equity financing, taking on debt comes with its own
advantages and disadvantages. The table below provides a
snapshot of what to consider when looking at debt financing.
DEBT FINANCING
PROS
CONS
· Business does not give up any ownership of the business
· There are no outside investors who can influence the direction
of the business
· Obtaining debt financing is typically a less expensive process
than equity financing
· A variety of lenders provide debt financing
· There are predictable payments, which can make the budgeting
process easier
· There are tax benefits because interest paid on loans is
deducted from sales revenue. The interest expense lowers pre-
tax income, which lowers the company’s income taxes
· The money has to be returned according to a fixed payment
plan that the business must make until the debt is paid off
· There are interest costs added to the loan debt

· Debt financing does not enhance the company’s credibility or
image if debt gets high or out of control
· Debt may be difficult to secure for young companies with
little credit history
· These arrangements may hinder cash flow because money set
aside for fixed payment obligations is not available for other
purposes
· Debt financing may require a personal guarantee
In order to truly analyze where debt financing is the best
approach, you’ll need to be able to calculate the full amount of
the loan including interest. Let’s run through an example.
A business has taken out a $100,000 loan and is required to
make 50 monthly payments with an annual interest rate of 12%.
To determine how much this loan will actually cost, the loan
amount plus interest, you will need to calculate the amount of
each monthly payment. To do so, you will need to continually
factor in the reduced balance on each subsequent payment.
You can either calculate this by hand (which we’ll show you) or
you can use a financial calculator, like those on
calculatorsoup.com. If you’d like to follow along on
the calculatorsoup.com website, go to Financial - Loans > Loans
> Loan Calculator > Choose a Calculation: Find the Monthly
Payment. Then, input the values from our example.
The equation used to calculate the monthly payment is as
follows:
PMT=
PVi(1+i)n
(1+i)n-1
· PV = Present Value, or principal of the loan
· i = Interest rate
· n = Number of payments

First, we need to calculate the correct interest rate to use. Most
interest rates are annual rates, as in this example. But, typically
payments are made more frequently than once a year. In our
example, payments are made monthly, so we need to divide the
annual interest rate by 12.
· i = .12/12
· i = .01
Now we have all the numbers we need to calculate the amount
of our monthly payment.
· PV = 100,000
· i = .01
· n = 50
·
PMT =
100,000 x .01(1 + .01)50
(1 + i)50 -1
· PMT = $2,551.27
Now that we have calculated the value of our monthly payment,
we can multiply it by our 50 required payments to calculate the
total amount of all loan payments, the true cost of the loan.
· Total Amount = $2,551.27 x 50
· Total Amount = $127,563.72
As we’ll see, even though the business in our example is only
borrowing $100,000, they are paying $27,563.72 in interest.
Self-Financing (or Internal-Financing)
Instead of looking for lenders or investors outside of the
company, business leaders can use internal financing to fund

growth and expansion. Typically, a business distributes or
shares the money it makes—its profits—to the business’s
owners, investors, or both. In the case of self-financing growth,
a business chooses to fund new projects with its profits instead
of sharing them. This arrangement works best when everyone
expects that the investment will create more growth. Like the
external financing options discussed above, internal financing
has important pros and cons to consider.
SELF-FINANCING (OR INTERNAL FINANCING)
PROS
CONS
· Money is immediately available
· There are no payments to investors or lenders, so this option
avoids the risks of owing money to outside parties
· This is the most flexible option
· Business owners retain control of decision making
· Self-financing signals strong financial health
· Self-financing is expensive because it does not involve tax-
deductible interest expense
· This option does not immediately increase the amount of
money in a business because it does not take advantage of
outside money; it simply uses the money already in the business
· Available internal funds for new projects are often limited
because cash is still needed to fund current ongoing projects
and operations
· Losses due to a poor investment have a more significant
impact on the business
Understanding the unique benefits and challenges of each of
these approaches to securing financing is important to making
good business decisions. When a business decides that it needs
to look for money to help it grow, it’s important to consider
various facts that relate to each of the pros and cons. For
example, if a business makes more money during particular
seasons, it may need to figure out whether it will make enough
money each month to meet the monthly payments on its debt
during an off-season. This level of attention to detail separates

the great businesses from the good businesses.
Budgeting
In order to determine how much money a business may need in
the future, or how much it will cost to finance a special project,
it’s important to create financial plans that estimate how much
money the business both earns and spends in the foreseeable
future. This type of planning requires that businesses build
budgets that look ahead. Budgets don’t just play a role in
financial management when additional funding is needed,
though. They are commonly used in businesses to manage day-
to-day planning as well.
Budgeting is a five-step process: (1) preparation, (2) approval,
(3) consolidation, (4) comparison, and (5) revision. Each of
these steps is important to the financial health of the business.
1. Preparation: Each business unit has its own budget. The
manager of the unit develops the individual budget based on her
knowledge about the department, guidance from supervisors,
and targets for the year.
2. Approval: Supervisors review unit budgets. Satisfactory
budgets are approved. Unacceptable budgets must be revised
and approved before they are submitted to the next step.
3. Consolidation: The budgets of the individual business units
are combined into a master budget for the entire organization
for the year. The master budget includes a profit-and-loss
statement, a projected balance sheet, and a budgeted cash-flow
statement.
4. Comparison: As the year progresses, actual numbers are
compared to budgeted targets.
5. Revision: When the business does not achieve its budgeted
numbers, the business may change its expenses, projects or
programs in order to reach the targets.
By following each of these five steps, a business ensures that it
has a clear, updated picture of where it stands financially and
where it can expect to be at the end of the fiscal year. This
prevents surprises and allows a business to make smart choices
about how to spend money. When a business finds it has a

shortfall, people need to make careful decisions about what
programs or projects to cut. On the other hand, in the event of a
surplus, the business can choose where to spend that extra
money. Accurate budgeting allows a business to see into the
future and make choices that will ensure its short-term and
long-term financial health.
Financial Decision-Making
Making tough decisions is a natural part of business. Effective
leaders face difficult choices every day. In order to deal with
each of the decisions that come up, leaders need reliable
frameworks to help them make informed decisions about how to
best move forward. A framework is a tool that helps to organize
thinking about a particular topic. A financial decision-making
framework, then, is a way of analyzing choices about finances
to help make the best decision based on the information
available.
There are many frameworks to use to make decisions. The trick
is to find the one that works best for you or to develop one that
you’re comfortable with. However, there are some basic steps
that you can use to inform your thinking.
1. Identify the Decision. This first step may seem obvious, but
it’s important to be very clear about what the decision is.
Sometimes there are complicating factors that may get in the
way of the most important thing that needs to be decided. In
those cases, it’s important to clearly define the decision you’re
making.
2. Do Research. In this phase, you focus on gathering all of the
information that could help you to make the best decision. This
may include conducting online research, talking to customers,
or interviewing team members or employees. It’s important to
get a broad perspective to help you weigh the decision without
bias.
3. Create a List of Alternative Decisions. Looking for numerous
courses of action will help you to leave no stone unturned, as
the saying goes. Every decision can be solved in multiple ways.
It’s important to get all the possibilities out there and consider

each of them on their own merits.
4. Weigh the Information. Once you have all of the possible
options on the table and you’ve done your homework, you can
now look at which of the alternatives makes the most sense
given what you know.
5. Choose a Direction and Take Action. Having considered all
of the facts, it’s time to make a decision. Be resolved and trust
the work you’ve done to make the decision. This will encourage
others around you to support the decision, which gives it a
higher likelihood of succeeding.
6. Review the Outcomes. After you’ve moved forward, it’s
important to reflect on how the decision turned out. This will
provide insights about what to do next or surface lessons
learned that can help you to make better decisions in the future.
It’s helpful to get feedback from the people involved in the
decision-making process as well.
By applying these simple steps, you’ll be able to improve the
quality of your decision-making over time, repeat success,
avoid making the same mistakes, and learn from past decisions.
GETTING EVERYTHING IN ITS PLACE
As we learned in this week’s Strayer Talk, the steps of the
accounting cycle give businesses a reliable way to make sense
of all of their financial information. Let’s take a quick look
again to remind ourselves of the steps in this important process:
1. Record: Capture each financial transaction.
2. Classify: Group similar transactions.
3. Summarize: Add up similar transactions to make them easy to
understand.
4. Report: Create easy-to-read reports that provide an overall
look at key parts of the business.
5. Analyze: Use the information to make informed decisions
about the business.
In this week’s Deep Dive, we’ll take a closer look at the last
two steps of this process: Report and Analyze. During the
Report phase, three main financial statements are created: the
income statement, balance sheet, and statement of cash flows.

Each financial statement has a specific purpose and reveals
something unique about how well the business is doing. By
understanding these financial reports in more detail, we’ll be
able to explore how businesses use them to support their
decision-making.
Income Statement
One of the most important things for a business to understand is
its profitability—literally, its ability to make a profit from the
products it creates or sells. There are two key factors in
determining profitability: (1) how much revenue the sales of the
products generate; and (2) how much it costs to make and
deliver those products. The simplest way to think about the
income statement is with the simple equation below:
Total Revenues - Total Expenses = Profit(or Loss)
In essence, subtract the amount everything cost the business
from the amount of revenue (or income) the business earned to
see the profit. If things cost the business more than it earned in
revenue, the company will see a loss.
Of course, it’s not really that simple. There are different ways a
business can make money, such as selling equipment. And there
are also many expenses a business might incur during that same
period of time. The income statement goes one step further,
adding more detail so that people can understand where the key
sources of income and expenses are.
To help us better understand this statement, let’s look at an
example from SunsTruck. Note that when a number is negative,
it appears in parentheses.
At the top of the statement, you’ll see that it clearly identifies
three things: (1) the name of the company, (2) the title of the
financial statement, and (3) the period of time the statement is
summarizing. For this example, we’re looking at the income
statement for SunsTruck for the Third Quarter (“Q3”), or the
three months ending September 30, 2016.

The first category of numbers at the top is called revenues. This
is the total amount of income that the company earned during
this time period. You can see that there are two main sources of
revenue, or income for SunsTruck: (1) sales revenue, which is
the money the business earned from selling its main product,
sunglasses; and (2) other revenue, which is the money the
business made from other sources, such as selling old
equipment. For this quarter, SunsTruck made $80,000, which is
shown as total revenues.
The second area of revenue is related to the cost of earning that
revenue. If you are in the service industry like a hospital or
software design, this is called cost of revenues. In our example,
SunsTruck sells a physical product, sunglasses, so it is
called cost of goods sold (COGS). This number represents the
direct cost of either making the products or purchasing them
from the supplier. In the case of SunsTruck, this number is the
amount of money the company spent to buy the sunglasses from
brands like Oakley or RayBan that were then sold in their truck.
In the third quarter, SunsTruck spent $40,000 on sunglasses to
sell in their truck.
The third area of revenue shows gross profit-—total revenue
minus the cost of goods sold. The amount of gross profit that
SunsTruck earned this quarter is $40,000. It is the total revenue
minus the total COGS ($80,000 revenue - $40,000 COGS =
$40,000 gross profit). Gross profit is a very important number
to know, because it is what’s left over to cover all of the
business’s other expenses. If gross profit is not high enough, the
company is losing money and (eventually) will go out of
business. In our SunsTruck example, the business has $40,000
in gross profit to cover its remaining expenses.
Our second category on the income statement includes all of the
other types of expenses that a business has. You can see two

expense groupings: (1) selling, general and administrative
expenses and (2) marketing and advertising. Remember,
expenses are the costs it takes to keep a business going. Each
group includes a number of different but related costs. Selling,
general, and administrative expenses often refer to costs
associated with selling a product, such as sales commissions
and shipping costs, and/or administrative needs such as rent or
office supplies. Marketing and advertising expenses refers to
the spend on promotional activities for the product. While there
are many other expense categories that businesses use, these are
two of the most common.
The next area of expenses is income from operations. In this
line, all expenses are subtracted from the gross profit ($40,000
gross profit - $10,000 expenses = $30,000 income from
operations). This, too, is an important figure to watch because it
tells us whether or not a company’s core business is profitable.
For SunsTruck, its expenses were less than its gross profit so
there is a positive amount of income from its operations of
selling sunglasses.
The next area of expenses is other expenses. You’ll see interest
expense under this category, which refers to the total amount of
money spent on interest for outstanding loans the company
owes. During the third quarter, SunsTruck had $500 in interest
expense on its outstanding loans.
Our third category is pretax income. In this line we subtract
other expenses from the income from operations to get our
pretax income ($30,000 income from operations - $500 other
expenses = $29,500 pretax income). We then need to account
for the amount of taxes paid on this income, which in our
SunsTruck example was $7,000.
Our final category in the income statement is net income. Net
income shows how much money a business makes after all

expenses are paid. To calculate net income, we subtract the
income tax expense from the pretax income ($29,500 pretax
income - $7,000 income tax expense = $22,500 net income). In
the case of SunsTruck, net income is $22,500! It’s important to
know that net income can be positive (a profit) if revenues are
higher than the total of all expenses, or negative (a loss) if all
of the expenses are higher than revenues. But watch out! Net
income does not mean that you have this much in your checking
account. Remember, some revenues were done on credit and the
business has to wait to see its cash. Likewise, some expenses
have not yet been paid, only recorded.
WHEN TO USE THE INCOME STATEMENT
The income statement is useful when you want to understand
how profitable a business is. Generally speaking, a sign of a
successful and growing company is a steady increase in
revenue, with the difference between income and expenses
getting wider and wider. This indicates that the business is
making more money while controlling or even decreasing
expenses.
The Balance Sheet
It’s often helpful to have a quick summary of where things
stand, especially for your personal finances. Knowing what you
own compared to what you owe to other people gives you a
helpful snapshot of your current financial health. The balance
sheet, also known as the statement of financial position, is
unique because instead of looking at a business over a period of
time, it shows where the business stands at that moment.
The balance sheet gets its name from the fact that both sides of
the balance sheet have to be equal. There is a common equation
that summarizes the balance sheet:
Assets = Liabilities + Shareholders' Equity
If you think about it, this makes sense. If assets are the items a

business owns or controls, the business has to have the money
to pay for those things either by borrowing money (liabilities)
or getting money from investors or from retained earnings
(shareholder’s equity).
One thing to note about this statement is that individual
accounts are shown on the left and the summary accounts are
shown in the column on the right. Let’s look at a sample
balance sheet from SunsTruck:
The first category of the balance sheet is assets, which includes
all of the things the business owns or controls. You’ll notice
there are two groups of assets: current and long-term. Current
assets are expected to be used up and replaced over and over
during the current twelve months. Long-term assets are items
expected to last longer than one year. There can be many types
in both groups, but we’ll just focus on a few of the most
common ones.
In the current assets category, you have cash, accounts
receivable, and merchandise inventory.
· Cash is pretty simple—it’s the amount of money a business
currently has in the bank.
· Accounts receivable is the money that the business is owed
from customers who have already purchased products on credit.
· Merchandise inventories is the value of all of the merchandise
products the company has on hand but has not yet sold.
In the long-term assets category, you have SunsTruck’s truck
and equipment, the total value of vehicles or other large
equipment that the business owns. Many businesses also have
other long-term assets like land, buildings, machinery, and
patents.
Adding together a business’s current assets and long-term assets
gives us our total assets ($32,000 total current assets + $68,000
long-term assets = $100,000 total assets). As you can see, the

total of all of SunsTruck’s assets as of September 30, 2016 is
$100,000.
The next section of the balance sheet is liabilities. This is the
money that the business owes to other parties. Like assets,
liabilities are divided into current and long-term groups. This
lets everyone know what has to be paid over the upcoming
twelve months versus what’s not due for more than a year from
now.
In the current liabilities group, the first item is accounts
payable. This is the total of all of the money the business owes
for things it has purchased on credit from suppliers related to
the creation of its products. For example, SunsTruck may
purchase all the sunglasses it expects to sell in the next month
from a sunglasses supplier with an agreement to pay the
supplier back in 30 or 60 days.
In the long-term liabilities group , you'll find loan categories:
· Truck Loan (the money SunsTruck owes for its mobile store)
and
· Operating Loan (the money SunsTruck borrowed from a lender
to provide cash for expenses, such as meeting payroll).
Between current and long-term liabilities, the total of all the
money the business owes as of the given date is shown as total
liabilities ($10,000 current liabilities + $60,000 long-term
liabilities = $70,000 total liabilities).
Finally, in addition to loan liabilities, a business can get money
from investors. This money is shown in the shareholders’
equity section. Contributed capital shows the total amount of
money given by outside investors. Retained earnings is the
amount of profit that the business has kept to use to grow the
company instead of giving it back to the owners of the business.
As of September 30, 2016, SunsTruck had total shareholders’
equity of $30,000.

Remember how we said both sides of the balance sheet have to
equal? To see that the SunsTruck balance sheet is “in balance”
at this moment of time, you can compare the total assets of the
business ($100,000) to the sum of total liabilities plus
shareholders’ equity ($70,000 total liabilities + $30,000 total
shareholders’ equity = $100,000 total liabilities and
shareholders’ equity), the last line of the balance sheet. As of
September 30, 2016, SunsTruck had $100,000 for both
“sides”—demonstrating that the balance sheet is balanced.
WHEN TO USE THE BALANCE SHEET
The balance sheet is useful to see how healthy a business is at
any particular time. It’s important to ensure that the business’s
debt, its liabilities, is a reasonable size relative to assets and
shareholders’ equity. If debt is growing, it may be a sign that
the business is not effectively converting its investments into
profits for the company’s owners.
Statement of Cash Flows
Many business leaders will tell you that the statement of cash
flows is the most important statement of them all—and that may
very well be true. In reality, if the business doesn’t have cash
on hand to purchase products or pay employees, it can’t keep its
doors open. Cash is the lifeblood of a business, and knowing
how much of it is available is vital for success.
As we’ve learned multiple times in this course, you can pick up
a lot about business from your personal life. Creating a
statement of cash flows is almost identical to balancing a
checkbook. You start off with a certain amount of cash and,
during a period of time, money comes in and money goes out.
Then, at the end of the time period, you have an ending cash
balance that is either higher, lower, or the same as the cash you
had when you started.
The statement of cash flows shows all of the cash entering and
leaving a company during a given period of time. It’s important

to know that cash is different from revenue! The revenue
number from the income statement includes both sales paid with
cash and sales made on credit. This second type of sale, where
the business has not yet received its cash, shows up indirectly
on the statement of cash flows as either an increase or decrease
in accounts receivable. A decrease in accounts receivable
indicates that more cash has been received than new sales made
on credit. An increase in accounts receivable indicates more
new sales were made on credit than cash received.
Let’s walk through a sample statement of cash flows for
SunsTruck. Note that when a number is negative, it appears in
parentheses.
The statement of cash flows focuses on three main …
NAME:
INSTRUCTOR:
DATE:
Assignment 2
FINANCE & ACCOUNTING – SENIOR ACCOUNTANT
Analysis
Due Date: Week 5
Note: While representative of possible situations faced by
SunsTruck Sunglasses, all scenarios in this assignment are
fictional.
Real Business
Large discount retailers like Target and Walmart employ large
teams of Finance and Accounting professionals to help measure
and understand the financial health of the business. Financial
and accounting information helps these businesses make
educated financial decisions, such as whether or not to continue

partnering with a retail supplier. While often smaller
businesses, it is equally important for these retail suppliers to
use financial and accounting data to make educated decisions,
such as the best approach to gaining additional funding.
Your Role
This week, you’ll assume the role of Senior Accountant with
SunsTruck Sunglasses.
What Is a SENIOR ACCOUNTANT?
Senior accountants take ownership of reporting costs,
profitability, margins and expenditures for a given business.
They use the principles of accounting to analyze sales
information, create financial reports, make recommendations
about the financial health of the company, and more. They are
also responsible for training junior accounting staff.
For the last six months, SunsTruck has partnered with the
discount retail store to run a pop-up sunglasses stand in their
stores for a big summer promotion. Due to the high customer
purchase rate, the store has requested stock for five additional
stores. SunsTruck needs to increase its capacity to meet the
additional demand. In order to do so, SunsTruck needs
additional money.
In this assignment, you will need to help determine which type
of financing option is best for your company and train your
junior accountants on the accounting cycle and financial
statements.
Instructions
Step 1: FINANCING
The junior accounting team has assembled a Financing Report
that (a) offers three options for securing the additional funds
required to meet the new order; and (b) details the criteria
Shaun, the owner of SunsTruck, would like you to consider
when choosing one of the three options. Based on this report:

· Identify which financing option you think is the best option
for SunsTruck to pursue given Shaun’s constraints. Underline
your selection:
Option 1: Equity
Option 2: Debt
Option 3: Debt + Self-Financing
Please explain the rationale for your decision.
Note: You should complete Steps 2 & 3 after reading the
material in Week 5.
Step 2: ACCOUNTING CYCLE
A junior accountant is working to get everything in order for the
new financing and has come to you with a question about what
do next in the accounting cycle.
· Read the email the junior accountant sent you and identify the
best next step to take in the accounting cycle. Please explain
your reasoning.
Step 3: FINANCIAL STATEMENTS
A potential investor has been identified, but before it is willing
to commit, it has requested information about SunsTruck’s
current debt from the junior accountants.
Identify the correct financial statement for your junior
accountants that will provide the investor with the information
it has requested. Underline your selection:
Income Statement
Balance Sheet
Cash Flow Statement
Please explain to your junior accountants why you are giving
them this financial statement and where the debt information is

located.
1 BUS100: INTRODUCTION TO BUSINESS
FINANCE & ACCOUNTING - SENIOR ACCOUNTANT
ANALYSIS
Due Date
Week 5
Note: While representative of possible situations faced by
SunsTruck Sunglasses, all scenarios in this assignment are
fictional.
Real Business
Large discount retailers like Target and Walmart employ large
teams of Finance and Accounting professionals to help measure
and understand the financial health of the business. Financial
and accounting information helps these businesses make
educated financial decisions, such as whether or not to continue
partnering with a retail supplier. While often smaller
businesses, it is equally important for these retail suppliers to
use financial and accounting data to make educated decisions,
such as the best approach to gaining additional funding.
Your Role
This week, you’ll assume the role of Senior Accountant with
SunsTruck Sunglasses.
Senior accountants take ownership of reporting costs,
profitability, margins and expenditures for a given business.
They use the principles of accounting to analyze sales
information, create financial reports, make recommendations
about the financial health of the company, and more. They are
also responsible for training junior accounting staff.

For the last six months, SunsTruck has partnered with the
discount retail store to run a pop-up sunglasses stand in their
stores for a big summer promotion. Due to the high customer
purchase rate, the store has requested stock for five additional
stores. SunsTruck needs to increase its capacity to meet the
additional demand. In order to do so, SunsTruck needs
additional money.
In this assignment, you will need to help determine which type
of financing option is best for your company and train your
junior accountants on the accounting cycle and financial
statements.
INSTRUCTIONS
Step 1: Financing
The junior accounting team has assembled a Financing Report
that (a) offers three options for securing the additional funds
required to meet the new order; and (b) details the criteria
Shaun, the owner of SunsTruck, would like you to consider
when choosing one of the three options. Based on this report:
· Identify which financing option you think is the best option
for SunsTruck to pursue given Shaun’s constraints. Please
explain the rationale for your decision.
Note: You should complete Steps 2 & 3 after reading the
material in Week 5.
Step 2: Accounting Cycle
A junior accountant is working to get everything in order for the
new financing and has come to you with a question about what
do next in the accounting cycle.
· Read the email the junior accountant sent you and identify the
best next step to take in the accounting cycle. Please explain
your reasoning.
Step 3: Financial Statements
A potential investor has been identified, but before it is willing

to commit, it has requested information about SunsTruck’s
current debt from the junior accountants.
· Identify the correct financial statement for your junior
accountants that will provide the investor with the information
it has requested. Please explain to your junior accountants why
you are giving them this financial statement and where the debt
information is located.
Name: BUS100 Week 5 Assignment 2: Finance & Accounting –
Description: BUS100 Week 5 Assignment 2: Finance &
Accounting – Senior Accountant Analysis
Unacceptable 0- 59% F
Meets Minimum Expectations 60-69% D
Fair 70-79% C
Proficient 80-89% B
Exemplary 90-100% A
BUS100-A2-1
1. Identify the best financing option and explain your reasoning.
Points Range:0 (0.00%) - 22.125 (17.70%)
Does not accurately identify financing option; explanation lacks
logic and supporting information. Demonstrates no
understanding of finance.
Points Range:22.5 (18.00%) - 25.875 (20.70%)
Accurately identifies financing option; explanation lacks logic
and/or supporting information. Demonstrates minimal
Points Range:26.25 (21.00%) - 29.625 (23.70%)
Accurately identifies financing option; minimally supports
answer with logical explanation and information from the
Financing Report and/or course material; OR Does not
accurately identify financing option; adequately supports
answers with information from the Financing Report and/or
course material. Demonstrates adequate understanding of
finance.
Points Range:30 (24.00%) - 33.375 (26.70%)

Accurately identifies financing option; adequately supports
answer with logical explanation and information from the
Financing Report and/or course material. Demonstrates good
Points Range:33.75 (27.00%) - 37.5 (30.00%)
Accurately identifies financing option; thoroughly supports
answer with logical explanation and specific information from
the Financing Report and course material. Demonstrates
excellent understanding of finance.
BUS100-A2-2
2. Identify the next step in the accounting cycle for the junior
accountant to complete and explain your reasoning.
Points Range:0 (0.00%) - 22.125 (17.70%)
Does not accurately identify accounting cycle step; explanation
is missing or lacks logic and supporting information.
Demonstrates no understanding of accounting.
Points Range:22.5 (18.00%) - 25.875 (20.70%)
Accurately identifies accounting cycle step; explanation lacks
logic and/or supporting information. Demonstrates minimal
understanding of accounting.
Points Range:26.25 (21.00%) - 29.625 (23.70%)
Accurately identifies accounting cycle step; minimally supports
answer with logical explanation and information from course
material; OR Does not accurately identify financing option;
adequately supports answers with information from course
material. Demonstrates adequate understanding of accounting.
Points Range:30 (24.00%) - 33.375 (26.70%)
Accurately identifies accounting cycle step; adequately supports
answer with logical explanation and information from course
material. Demonstrates good understanding of accounting.
Points Range:33.75 (27.00%) - 37.5 (30.00%)
Accurately identifies accounting cycle step; thoroughly supports
course material. Demonstrates excellent understanding of
accounting.
BUS100-A2-3

3. Identify the best financial statement to provide to the
potential investor and explain your reasoning.
Points Range:0 (0.00%) - 22.125 (17.70%)
Does not accurately identify financial statement; explanation is
missing or lacks logic and supporting information.
Demonstrates no understanding of financial statements.
Points Range:22.5 (18.00%) - 25.875 (20.70%)
Accurately identifies financial statement; explanation lacks
logic and/or supporting information. Demonstrates minimal
understanding of financial statements.
Points Range:26.25 (21.00%) - 29.625 (23.70%)
Accurately identifies financial statement; minimally supports
answer with logical explanation and information from financial
statements and/or course material; OR Does not accurately
identify financial statement; adequately supports answers with
information from financial statements and/or course material.
Demonstrates adequate understanding of financial statements.
Points Range:30 (24.00%) - 33.375 (26.70%)
Accurately identifies the financial statement; adequately
supports answer with logical explanation and information from
financial statements and course material. Demonstrates good
understanding of financial statements.
Points Range:33.75 (27.00%) - 37.5 (30.00%)
Accurately identifies financial statement; thoroughly supports
financial statements and course material. Demonstrates
excellent understanding of financial statements.
BUS100-A2-4
4. Write in a professional manner using proper grammar and
spelling.
Points Range:0 (0.00%) - 7.375 (5.90%)
Writing does not meet minimal standards. Tone is not
professional. Wholly lacking in logic, clarity, and/or consistent
formatting. Contains many spelling and/or grammatical errors.
Points Range:7.5 (6.00%) - 8.625 (6.90%)
Writing meets minimal standards. Tone is not professional.

Lacking one or more of logic, clarity, and/or consistent
formatting. May contain more than 8 spelling and/or
grammatical errors.
Points Range:8.75 (7.00%) - 9.875 (7.90%)
Writing is satisfactory. Professional tone is developing. Shows
moderate logic, clarity, and/or consistent formatting. May
contain more than 2-4 spelling and/or grammatical errors.
Points Range:10 (8.00%) - 11.125 (8.90%)
Writing is mostly good. Tone is professional. Shows logic,
clarity, and consistent formatting. May contain few or no
spelling and/or grammatical errors.
Points Range:11.25 (9.00%) - 12.5 (10.00%)
Writing is excellent. Tone is professional and sophisticated.
Shows logic, clarity, and consistent formatting. Contains no
spelling or grammatical errors.
Name:BUS100 Week 5 Assignment 2: Finance & Accounting –
Description:BUS100 Week 5 Assignment 2: Finance &
Accounting – Senior Accountant Analysis

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