ASSIGNMENTPurpose of AssignmentThe purpose of this assignmen.docx

ASSIGNMENT
Purpose of Assignment
The purpose of this assignment is to help students gain a better
understanding of the financial statements used for corporate
financial reporting and the key ratios used to make business
decisions.
Assignment Steps
1) Select a Fortune 500 Company from one of the following
industries:
· Pharmaceutical
· Energy
· Retail
· Automotive
· Computer Hardware
2) Reviewthe balance sheet and income statement in the
company’s 2015 Annual Report.
3) Calculate the following ratios using Microsoft® Excel®:
· Current Ratio
· Quick Ratio
· Debt Equity Ratio
· Inventory Turnover Ratio
· Receivables Turnover Ratio
· Total Assets Turnover Ratio
· Profit Margin (Net Margin) Ratio
· Return on Assets Ratio
4) Analyze in 1,050 words why each ratio is important for
financial decision making.
Each type of ratio should have its own section in the paper:
Section headings are required by APA.

Look at the ratios and make sure that they’re appropriate. For
example, a service company (e.g. FedEx, Yahoo) doesn't
produce a product, so there is no inventory, thus an inventory
turnover ratio would be meaningless, so that is why the list
above is restricted. A company with little or no debt would have
a debt-to-equity ratio that might not change much from year to
year.
Put small tables for each category in the paper and discuss each
set.
Like this:
Ratios
2015
X ratio
1.6
1.6
y ratio
1.94
1.94
z ratio
2.55
2.55
1.57
1.57
1.91
1.91

Or this:
Liquidity ratios
2015
Current ratio
Current Assets / Current liabilities
1.43
Quick ratio
Current asset - inventories / Current liabilities
1.37
DO NOT put huge tables in your paper as it is too hard to read
and will cause you to lose points.
Here's a list of the ratios from the textbook:

SHORT-TERM SOLVENCY RATIOS
Current ratio = Current assets ÷ Current liabilities
Quick ratio = (Current assets - Inventory) ÷ Current liabilities
Cash ratio = Cash ÷ Current liabilities
FINANCIAL LEVERAGE RATIOS
Total debt ratio = Total debt ÷ Total assets = (Total assets -
Total equity) ÷ Total assets
Debt-equity ratio = Total debt ÷ Total equity
Equity multiplier = Total assets ÷ Total equity = 1 + debt-equity
ratio
Times interest earned = Earnings before interest and taxes ÷
Interest
Cash coverage = (Earnings before interest and taxes +
depreciation + amortization) ÷ Interest
TURNOVER RATIOS
Inventory turnover = Cost of goods sold ÷ Inventory
Days sales in inventory = 365 ÷ Inventory turnover
Receivables turnover = Sales ÷ Receivables
Days' sales in receivables= 365 ÷ Receivables turnover
Total asset turnover = Sales ÷ Total assets
Days in inventory = Days in period ÷ Inventory turnover
PROFITABILITY MEASURES
Profit margin = Net income ÷ Sales
Return on assets = Net income ÷ Total assets
Return on equity = Net income ÷ Total equity
EBITDA margin = EBITDA ÷ Sales
MARKET VALUE RATIOS
Price-to-earnings ratio = Market price per share ÷ Earnings per
share
Market-to-book ratio = Market price per share ÷ Book value per
share
Market capitalization = Market price per share x Shares
Outstanding
Enterprise Value (EV) = Market capitalization + Market value

of interest bearing debt - cash
EV Multiple = EV ÷ EBITDA
Grading RubricResources Required
Microsoft® Excel®
Content
Met
Partially Met
Not Met
Comments:
Selected a Fortune 500 Company from one of the following
industries:
· Pharmaceutical
· Energy
· Retail
· Automotive
· Computer Hardware
Reviewedthe balance sheet and income statement in the
company’s 2015 Annual Report.

Calculated the following ratios using Microsoft® Excel®:
· Current Ratio
· Quick Ratio
· Debt Equity Ratio
· Inventory Turnover Ratio
· Receivables Turnover Ratio
· Total Assets Turnover Ratio
· Profit Margin (Net Margin) Ratio
· Return on Assets Ratio
Analyzed in 1,050 words why each ratio is important for
financial decision making.
Total Available
Total Earned
5
#/5
Writing Guidelines

Met
Partially Met
Not Met
Comments:
The paper—including tables and graphs, headings, title page,
and reference page—is consistent with APA formatting
guidelines and meets course-level requirements.
Intellectual property is recognized with in-text citations and a
reference page.
Paragraph and sentence transitions are present, logical, and
maintain the flow throughout the paper.
Sentences are complete, clear, and concise.
Rules of grammar and usage are followed including spelling and
punctuation.

Total Available
Total Earned
3
#/3
Assignment Total
#
8
#/8
Additional comments:
CCH Risk Management System
By Amanda McCauley, Katie Block, Brittany Barrett
Risk Policy
What is Risk Management? The process of identifying,
analyzing, and accepting or mitigating any uncertainty for
investment decisions.

Risk Management Reference - Investopedia. (2014, October 02).
Risk Management. Retrieved February 03, 2017, from
http://www.investopedia.com/terms/r/riskmanagement.asp
2
Risk Policy Continued
Risk policy continued
Risks Identified
Risks identified - Heat Map
Plan outline
Use table
Job Duties with Risk Management

Job Descriptions with Risk Management
Rasmussen College
Katie Block, Brittany Barrett, and Amanda McCauley
Author Note
This paper is being submitted on January 15, 2017 for
William Tipton’s ACG3205 Risk Management for Accountants
course. Amanda McCauley completed CEO, Katie Block
completed CFO, and Brittany Barrett completed CRO.
Job Duties for the CEO
The CEO to the City Community Hospital is tasked with the
responsibilities of serving the hospital in full-time basis, and
also ensuring that he works in close collaboration with the
related institutions (Heart of the Rockies Regional Medical
Center. 2017). In faith, industriousness and to the best ability
possible, the CEO should work with the aim of overseeing the
duties entrusted to the CEO as outlined by the legislations to
the Hospitals, its contractual obligations and regulations as
outlined by the Board of Directors (Heart of the Rockies
Regional Medical Center. 2017). As much as the CEO continues
exhibiting his/her commitments to providing the best possible
leadership of being the leading administrative officer, directing
operations, and ensuring proper coordinateon of the Hospital’s
activities so as to help achieve the goals, missions, and
strategies of the organizations, he/she should be wary of the
possible risks and how they can be managed.
The CEO of the City Community Hospital has the following ten
key duties and responsibilities in line with risk management.
The first duty is administration of the board and provision of
adequate support. He needs to have adequate maintenance of the

members of the Board and the organizational Medical Staff
(Heart of the Rockies Regional Medical Cent er. 2017). This
will help with ensuring that the Board remains updated with the
board’s operations. He/she will be tasked with ensuring that
there is good relationship between the physicians by facilitating
proper medical staff liaison. This will help mitigate the risk of
employee wrangles and misunderstandings in the course of them
exercising. Third, the CEO will be tasked with the duty of
facilitating healthy relations with both the public and
community (Heart of the Rockies Regional Medical Center.
2017). This should be exhibited through proper communication
and social skills. With this, the Hospital will be able to build a
strong relation with the members of the public hence a wide
consumer bases. Other significant duties include cases like
proper strategic planning and transparent financial management.
Both of these are key in proper operations by the hospital and
can leave the hospital wreathing if not handled well by the
CEO.
In conclusion, the CEO should be aware of the following when
it comes to risk management. The first is the necessity of
realising whether risk management has become an integral part
of the business planning tactic used by the hospital. Second, the
CEO should ensure a continuous check of whether the
organization as a whole is actually walking the talk (Things
every CEO should know about risk management. 2017). Finally,
the CEO should figure out if the organization is taking enough
risks in the course of its operations.
Job Duties for the CFO
A chief financial officer (CFO) is the senior executive
responsible for managing the financial actions of a company.
The CFO's duties include tracking cash flow and financial
planning as well as analyzing the company's financial strengths
and weaknesses and proposing corrective actions. The CFO is
similar to a treasurer or controller because he is responsible for
managing the finance and accounting divisions and for ensuring
that the company’s financial reports are accurate and completed

in a timely manner (Investopedia, 2017).
Duties and responsibilities of a chief financial officer are very
important because they are the second in command when it
comes to a business. One essential duty or responsibility is the
financial accounting and reporting, procedures and internal
controls of the department. These duties are important because
they oversee all the financial records and reports. When it
comes to risk management, as a CFO, you want to make sure the
control of risk is being adapted into the job duties. In order to
keep the risk control in place, there needs to be guide of
operations and how things are going to be accounted for and
reported. Therefore, organization is key to being a CFO.
Preparation of annual organization budget as well as individual
grant budgets; coordinate all department budgets; work with all
department heads throughout the year to ensure that
expenditures adhere to legal and budgetary requirements are
another job duty of an CFO. These duties are important from a
few different aspects. One reason that it is important is because
of the communication. Communication between departments
and working well with others should come easy to the CFO.
There are also more risk management duties to cover as a chief
financial officer and those are: Understand and mitigate key
elements of the company's risk profile, monitor all open legal
issues involving the company, and legal issues affecting the
industry, construct and monitor reliable control systems,
maintain appropriate insurance coverage, ensure that the
company complies with all legal and regulatory requirements,
ensure that record keeping meets the requirements of auditors
and government agencies, report risk issues to the audit
committee of the board of directors, and maintain relations with
external auditors and investigate their findings and
recommendations (Accounting Tools, 2016).
Job Duties for the CRO
The CRO of the City Community Hospital is tasked with
modeling, promoting, and ensuring that the Hospital’s Mission,
Vision, and Core Values are evident and present in the

provision of health care at CCH. The CRO is tasked with the
following responsibilities:
· Create an integrated risk framework for entire organization
· Assess risk throughout the organization
· Quantify risk limits
· Develop plans to mitigate risks
· Advise on directing capital to projects based on risk
· Assist functional managers in obtaining risk mitigation
funding
· Monitor the progress of risk mitigation activities
· Create and disseminate risk measurements and reports
· Communicate to key stakeholders regarding the risk profile of
the business (AccountingTools, 2016)
The CRO also must oversee insurance and decide upon the types
and specifics of the various insurance policies that the
organization should buy. The CRO will be the contact person
for the insurance providers. They will also recommend
insurance alternatives and any alternative insurance features
that are not currently in place or even suggest insurance
products that would be entirely new to the company. The will
manage the claims and supervise the filling of insurance claims,
monitor their progress with insurers, and verify that payments
have been received. CRO will need to investigate the risks
inherent in a target company that may be acquired, as well as
the state of its risk management practices.
Other responsibilities that the CRO is tasked with is the ability
to work in a fast-paced environment, with high levels of activity
and frequent interruptions. The CRO must be willing to work
beyond normal hours. CRO will also be a representative of CCH
and will travel and serve on state level boards. The most
important duty of a CRO is confidentiality. They must maintain
patient, employee, and hospital confidentiality at all times.
References
Accounting Tools. Chief Financial Officer (CFO) Job
Description.(2016). Retrieved on January 15, 2017 from

http://www.accountingtools.com/job-description-cfo
AccountingTools. (2016). Chief Risk Officer (CRO) Job
Description. Retrieved from AccountingTools:
http://www.accountingtools.com/cro-job-description
Investopedia. Chief Financial Officer – CFO. (2017). Retrieved
on January 14, 2017 from
http://www.investopedia.com/terms/c/cfo.asp
Heart of the Rockies Regional Medical Center.
(2017). Webcache.googleusercontent.com. Retrieved 15 January
2017, from
http://webcache.googleusercontent.com/search?q=cache:er7JQt
wNvvMJ:salidacitizen.com/wp/media/CEO-Job-Description-
1.13.doc+&cd=1&hl=en&ct=clnk
Things every CEO should know about risk management.
(2017). Webcache.googleusercontent.com. Retrieved 15 January
2017, from
http://webcache.googleusercontent.com/search?q=cache:CUKtY
eKUlr4J:www.grantthornton.cn/upload/10%2520things%2520ev
ery%2520CEO%2520should%2520know%2520about%2520risk
%2520management.pdf+&cd=1&hl=en&ct=clnk
Financial and Operational Risk
Risk Management System
Rasmussen College
Katie Block, Brittany Barrett, and Amanda McCauley

Module 4 Course Project
Risk Area
Level of Risk
Strategy (Assume, Mitigate, or Transfer)
Identify, Measure, Monitor, Report
Who is Responsible
Ensuring privacy/identity management security
High
Mitigate the resources we should to protect privacy of the
company
Security is identified within the company; Measure the amount
of security we need to protect the reports of the company;
Monitor the security and run tests on the computers for
protection; Report with the security reports and discuss if there
needs to be any more security implemented
The person responsible for the reporting is the head of the
security department of CCH
Resistance to change
Low
Mitigate the adjustments needed to make the change more
natural and productive
Change is identified; Measure the amount of change that is
happening; Monitor the change with reports, research into new
programs, and feedback; Report back company with findings
and acknowledgement to change and adjusting
The person responsible for reporting the resistance to change
risk should be supervisor/manager of the team that is in charge
of doing research into changing of society
Use of estimates
Medium
Assume the preparation are based on GAAP and reported
properly in the period
Estimates are identified and are in line with U.S. GAAP;
Measuring the estimates per the financial statements; Monitor
the estimates and the assets and liabilities; Report the estimates

in the financial statements and report revenue and expenses
The person responsible for estimates reporting risk is the CFO
Medicare programs
Low
Transfer because of reimbursements from Medicare and
Medicaid
Identify the program benefits and reimbursements for the
company; Measure the reimbursements and keep track of the
cost reports; Monitor the clinical diagnosis and reimbursements
with the patients by having a team considering the documents
and diagnosis of patients; Report all the reimbursements and
finalize settlements and adjust revenue when needed
The person responsible for Medicare risk reporting is the
insurance/Medicare department manager/supervisor
Human Capital
High
Assume employee turnover, employee qualifications,
recruitment, retention and termination
Report all complacency, turnover, occupational fraud,
catastrophic workplace events, and negligent hiring or retention
(Lower Risk Group, 2013). Monitor by using a checks and
balance system and doing audits. Hire outside consultants that
specialize Compliance and Ethics (C&E) programs. Invest
developing an internal C&E program. Reports on hiring, wages
and hours, benefits, employee relations, employee rights, and
employee benefits (Floyd, 2011)
The person responsible for reporting is the department head of
Human Resources
Operational
Medium
Assume insurances of the delivery of care that is safe, timely
effective, efficient, and patient-centered within diverse
population
Operational is identified within the company. Measured by
failure to diagnosis, failure to identify and follow EBM, failure
to give timely care. Report with equipment maintenance,

business cost and discipline reports, patient feedback cards, and
number of referrals (Carroll, 2014)
The person responsible for reporting in the head of each
different department and reporting to HR.
Hazards (Natural/Business Interruptions)
Medium
Transfer because of reimbursements from insurance policies.
Hazards are identified, within the company, need to monitor for
natural disasters, failure to plan/act time. Report the system
backup plans and report employee knowledge of how to handle
hazard situation (Carroll, 2014)
The person responsible for reporting the potential natural and
business hazards are the Board of Directors/CEO.
Legal/Regulatory
Medium
Assume the correct steps are in place to ensure all legal areas
are being covered
Legal compliance is identified within the company’s law
department. Measuring the amount of fraud, theft,
embezzlement, HIPAA Privacy and Security. Report back with
employment practices, compliance and oversight issues, and
level of fraud and theft found to be occurring (Carroll, 2014)
The person responsible for reporting is the CEO, Board of
Directors, and legal department.
Medical Errors
High
Medical errors includes wrong dosage, deaths of patients due to
poor handling or treatment as well as using wrong method of
treating patients that lead to another medical conditions
(Highland Risk Services, 2014). The medical errors cannot be
mitigated by ensuring that error made by personnel is reduced.
It entail employing competent personnel in the healthcare
facilities.
Expect calls from other human services proficient laborers if
orders/medicines are obscured. Actualize a doctor arrange
passage PC framework, in inpatient & outpatient settings. The

modernized framework have printed duplicates of
pharmaceutical requests/remedies and alarms that help screen
for dosage limits, medicate collaborations and sensitivities.
Board of Directors, Legal Department, Top Patient Care
Executive, HR Executive, CNO
Board Composition
Low
The composition of the Board matters since they help to over
the operations of the organizations. Therefore, the composition
should have personnel from other related industries to help
make multi-disciplinary decisions (Sullivan, 2013). Therefore,
the risk can be transferred by selecting a competent and
qualified board.
Basic measures of value normally incorporate the qualities of
the assets in the social insurance framework, including forte
board, singular specialists, and a team of professionals,
associations and frameworks of care, geographic area, and
openness of administrations. They are measures of the assumed
limit of the expert or supplier to convey quality medicinal
services.
Board of Directors and CEO
Transportation- shortage of ambulances and other emergency
vehicles
High
Transportation is cornerstone of the healthcare facilities as it
can be a life saver. Therefore, the risks of shortage of
emergency vehicles like ambulance should be mitigated as soon
as possible to avoid deaths of patients caused by lack of
transportations (Sullivan, 2013). Therefore, the strategy would
be to mitigate it by buying or leasing enough vehicles for any
emergency purposes.
Using a framework of wellbeing based multidisciplinary
approach - tending to the patient, supplier & open security with
far reaching information catch, key roadway security arranging
mix, ergonomic and car wellbeing points of view in conjunction
with the vehicle and armada security norms advancement - is

important to guarantee enhanced results in EMS transport
wellbeing.
Manager/Supervisor of Departments, COO, Top Ambulatory
Services Executive,
High Inflation Rate
High
Health care facilities are expected to deliver health services
regardless of the cost. The norm makes health care services to
have high expenses that might outweigh the revenue (Highland
Risk Services, 2014). The risk can be transferred by ensuring
that there is sufficient revenue from patients, services, grants
and donors.
A slack economy that left buyers with less extra cash likewise
debilitated many individuals from looking for therapeutic care.
Chance administration plan ought to concentrate on essentially
keeping the human services feasible through the diminishment
of money related dangers. Strong arrangements ought to
likewise concentrate on securing workers, clients and the
overall population from antagonistic or cataclysmic occasions,
for example, on account of human services associations,
mistakes in pharmaceuticals, conclusion or treatment.
CFO and CEO
There are many important reasons that reporting on risk is
beneficial. It improves the decision making of the team and the
company. It reduces the probability and severity of losses
resulting from risk management weaknesses. Reporting helps to
ensure opportunities for growth are taken up, reduce
procrastination as decision makers can be more confident if
more information is available, aid strategic and operational
planning and strategy setting, and if reported in the right way
good risk reporting will reduce information overload (Risk
Reporting, n.d.) Reporting is a process of risk management that
helps resolve some issues and looks over the monitoring process
and see the results of that process. Reporting gives the
company a perspective and helps improve in any areas that they

felt like they needed to improve in. I think that reporting this to
the shareholders in meetings is a good idea so that way you
have the appropriate information in front of you and the
additional evidence and reports.[footnoteRef:1] [1: Completed
by Katie Block]
When considering different reporting techniques, I found
some interesting steps to help achieve reporting risk. These are
more directed to the more IT side of the company but I think
that they could also be used in CCH.
· Resolution - A risk is resolved, completing the risk action
plan.
· Consistency - Risk actions are consistent with the risk
management plan, in which case the risk plan actions continue
as planned.
· Variance - Some risk actions are at variance with the risk
management plan, in which case corrective measures should be
defined and implemented.
· Changeability - The situation has changed significantly with
respect to one or more risks and will usually involve re-
analyzing the risks or re-planning an activity (Microsoft,
2017).[footnoteRef:2] [2: Completed by Katie Block]
Risk tracking and reporting is important in the risk management
process. Tracking is essential to implementing action plans
effectively. Having an effective action plans ensures that things
are getting done and if things don’t get done then the company
isn’t making progress (O'Donnellan, 2016). Regular reporting
enable the company to evaluate and refine cutoff strategies to
meet business objectives. It allows the company to measure
delinquency of accounts and predict future losses. The reports
also help to optimize opportunities for the company (Fair Issac
Corporation, 2011).[footnoteRef:3] [3: Completed by Brittany
Barrett]
In order to be successful with reporting risk, the

management of risks is a partner in ensuring all these areas are
covered. Specifically for CCH and any hospital, there are four
great practices to uses when monitoring and managing risks.
1. Proactively Perform Risk Assessments: Risk assessments
assist to identify risks that are seen to prevent the issues from
actually occurring versus reacting to the event that occurs.
2. Hardware Risk-Mitigating Practices: In order to maintain a
low-risk environment, risk managers are required to standardize
suitable practices throughout the organization. This helps to
educate the staff to incorporate this into their daily workflow.
3. Prioritize Tasks: Assessment of the risks of all tasks in
management and in staff and personnel will help coordinate and
organize the reporting process for the organization.
4. Establish a Just Culture: Setting up the culture within the
hospital to educate and ensure that not only managers recognize
and report risks, but ensure that staff, providers, and leaders
learn to recognize and report seen risks as well. (Rodak, 2013)
The organization as a whole needs to take a part in ensuring that
all risks or potential risks are reported and managed in an
appropriate way. It is an imperative part to risk reporting to
ensure that the management in place is acting and reporting
accordingly to policies set in place by the organization.
[footnoteRef:4] [4: Completed by Amanda McCauley
]
References
Microsoft. Step 4 - Tracking and Reporting Risk. (2017).
Retrieve on January 29, 2017 from
https://technet.microsoft.com/en-us/library/cc546839.aspx
Risk Reporting. Benefits of risk reporting. (n.d.) Retrieved on
January 29, 2017 from
http://www.positiveriskmanagement.com/Pages/risk_reporting.a
spx
Rodak, S. (2013, April 01). 4 Best Practices for Hospital Risk
Management. Retrieved January 29, 2017, from

http://www.beckershospitalreview.com/quality/4-best-practices-
for-hospital-risk-management.html

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