The document provides information about a final exam for a nonprofit financial management course. It consists of 3 parts worth a total of 100 points: Part I is an essay question worth 30 points, Part II consists of short answer questions worth 40 total points by answering 4 out of 6 questions, and Part III contains 2 problem/application questions worth 15 points each for a total of 30 points. The exam tests concepts covered in the course and requires students to integrate readings, cases, and analyses in their responses.
Abstract: Financial is the result of an organized process that is commonly referred to as money management
or financial planning and control. Financial planning is the process of managing money to achieve economic
satisfaction. This planning process allows for controlling financial situation. Every organisation has a unique
financial position, and any financial activity therefore must also be carefully planned to meet specific needs and
goals. A comprehensive financial plan can enhance the quality of organisational life and increase future needs
and resources. The specific advantages of personal financial planning include Increased effectiveness in
obtaining, using, and protecting your financial resources throughout your lifetime The objective of the present
study was to study the financial planning and to analyze the financial control. The tools applied for this study
are Additional Fund Needed, Breakeven Analysis, Index analysis etc, findings reveals that the additional fund
needed was increased during the study period. The company has to reduce the additional fund needed, dividend
payout ratio, plant capacity and in order to increase the retained earnings and profit margin. For most
companies, planning and controlling is a necessary but painful process. Unfortunately, it is often a prolonged
exercise that takes so long that the starting assumptions are virtually meaningless by the time the process is
complete. Add to that the rapidly increasing need for reporting and controls, both from investors and to meet
regulatory requirements. As per the above observations and analysis the company will have to improve its
financial planning and control for the upcoming years.
This document provides an introduction to ratio analysis and financial management. It discusses key topics including the importance of finance, definitions of financial management, types of financial analysis including horizontal and vertical analysis, the objectives and functions of financial management such as investment, financing, and dividend decisions. The document aims to give an overview of ratio analysis and various aspects of financial management.
Correlation between financial leverage and firm valueAlexander Decker
This document summarizes a research study on the correlation between financial leverage and firm value for companies listed on the Tehran Stock Exchange. The study analyzed 153 accepted companies over a 5-year period from 2005 to 2010. The main findings were:
1) There is a negative significant correlation between financial leverage and other variables like earnings per share, price earnings ratio, return on equity, return on assets, and operating profit.
2) According to the correlations, it is suggested shareholders consider these variables when making financial decisions to achieve an optimal capital structure, and managers decrease debt proportions to increase firm value.
3) Managers should help shareholders choose influential resources to increase wealth through strategic planning.
A tool for measuring organization performance using ratio analysisAlexander Decker
This document discusses using ratio analysis to measure organizational performance. It begins by defining ratio analysis and outlining its importance for monitoring and improving performance. The study aims to examine how ratio analysis can be used as a tool for measuring organizational performance. It reviews relevant literature on ratio analysis and discusses various types of ratios and their classification. The methodology section outlines the survey approach used to collect data from employees of a company. Hypothesis testing is used to analyze the relationship between ratio analysis and organizational performance. The results support the hypothesis that ratio analysis highlights the importance of effective management.
- Cost accounting evolved from financial accounting to meet the needs of industry for more accurate product costing and managerial decision making. It grew with industrialization in the late 19th century and further developed due to wars and increased competition.
- In India, the profession was established with the Cost and Works Accountants Act of 1959 which set up the Institute of Cost Accountants of India. Cost audit further strengthened the profession.
- Cost accounting involves classifying, recording and allocating costs to determine accurate product costs and provide management information. Costing is the process and techniques of ascertaining costs, while cost accountancy applies costing principles for cost control and profitability analysis to aid management decisions.
The document provides an overview of the telecommunications industry in India. It discusses the evolution of the industry from a state-run monopoly to a liberalized sector with private participation. Key points include:
- India has the second largest telecommunications network in the world, with over 895 million connections as of December 2015.
- The industry has grown rapidly since the 1990s after economic liberalization opened the sector to private companies.
- Telecom has become a major driver of India's economic growth and development, contributing over 2% to GDP.
Financial management ....the millieum financial management part 2 of 3raufik tajuddin
The document outlines the key responsibilities and activities of a financial manager. As a financial manager, one would be expected to prepare financial statements and reports, analyze market trends for expansion opportunities, ensure legal and regulatory compliance, and advise senior management on profit-maximizing strategies. Financial managers oversee budgeting, accounting, investments, and financing to achieve the long-term financial goals of the organization. They must have strong analytical, communication, and detail-oriented skills to perform capital budgeting and make optimal investment and financing decisions.
A stuy on interpretation and analysis of ratio analysis and performance evalu...Projects Kart
The document discusses performance evaluation on financial statements. It begins with an introduction on the importance of financial management in businesses. It then discusses the meaning of key terms like financial management, financial statements, and financial analysis and interpretation. It outlines the objectives, scope, and importance of financial statement analysis. Finally, it discusses the methodology, sources of data, types of analysis and the objectives of the study. The key points are:
1. Financial management is important for efficient use of capital funds and raising funds at lower costs.
2. Financial statements include the balance sheet and profit/loss statement and provide information on financial position and performance.
3. Financial analysis and interpretation involves studying relationships in financial data to evaluate profit
Abstract: Financial is the result of an organized process that is commonly referred to as money management
or financial planning and control. Financial planning is the process of managing money to achieve economic
satisfaction. This planning process allows for controlling financial situation. Every organisation has a unique
financial position, and any financial activity therefore must also be carefully planned to meet specific needs and
goals. A comprehensive financial plan can enhance the quality of organisational life and increase future needs
and resources. The specific advantages of personal financial planning include Increased effectiveness in
obtaining, using, and protecting your financial resources throughout your lifetime The objective of the present
study was to study the financial planning and to analyze the financial control. The tools applied for this study
are Additional Fund Needed, Breakeven Analysis, Index analysis etc, findings reveals that the additional fund
needed was increased during the study period. The company has to reduce the additional fund needed, dividend
payout ratio, plant capacity and in order to increase the retained earnings and profit margin. For most
companies, planning and controlling is a necessary but painful process. Unfortunately, it is often a prolonged
exercise that takes so long that the starting assumptions are virtually meaningless by the time the process is
complete. Add to that the rapidly increasing need for reporting and controls, both from investors and to meet
regulatory requirements. As per the above observations and analysis the company will have to improve its
financial planning and control for the upcoming years.
This document provides an introduction to ratio analysis and financial management. It discusses key topics including the importance of finance, definitions of financial management, types of financial analysis including horizontal and vertical analysis, the objectives and functions of financial management such as investment, financing, and dividend decisions. The document aims to give an overview of ratio analysis and various aspects of financial management.
Correlation between financial leverage and firm valueAlexander Decker
This document summarizes a research study on the correlation between financial leverage and firm value for companies listed on the Tehran Stock Exchange. The study analyzed 153 accepted companies over a 5-year period from 2005 to 2010. The main findings were:
1) There is a negative significant correlation between financial leverage and other variables like earnings per share, price earnings ratio, return on equity, return on assets, and operating profit.
2) According to the correlations, it is suggested shareholders consider these variables when making financial decisions to achieve an optimal capital structure, and managers decrease debt proportions to increase firm value.
3) Managers should help shareholders choose influential resources to increase wealth through strategic planning.
A tool for measuring organization performance using ratio analysisAlexander Decker
This document discusses using ratio analysis to measure organizational performance. It begins by defining ratio analysis and outlining its importance for monitoring and improving performance. The study aims to examine how ratio analysis can be used as a tool for measuring organizational performance. It reviews relevant literature on ratio analysis and discusses various types of ratios and their classification. The methodology section outlines the survey approach used to collect data from employees of a company. Hypothesis testing is used to analyze the relationship between ratio analysis and organizational performance. The results support the hypothesis that ratio analysis highlights the importance of effective management.
- Cost accounting evolved from financial accounting to meet the needs of industry for more accurate product costing and managerial decision making. It grew with industrialization in the late 19th century and further developed due to wars and increased competition.
- In India, the profession was established with the Cost and Works Accountants Act of 1959 which set up the Institute of Cost Accountants of India. Cost audit further strengthened the profession.
- Cost accounting involves classifying, recording and allocating costs to determine accurate product costs and provide management information. Costing is the process and techniques of ascertaining costs, while cost accountancy applies costing principles for cost control and profitability analysis to aid management decisions.
The document provides an overview of the telecommunications industry in India. It discusses the evolution of the industry from a state-run monopoly to a liberalized sector with private participation. Key points include:
- India has the second largest telecommunications network in the world, with over 895 million connections as of December 2015.
- The industry has grown rapidly since the 1990s after economic liberalization opened the sector to private companies.
- Telecom has become a major driver of India's economic growth and development, contributing over 2% to GDP.
Financial management ....the millieum financial management part 2 of 3raufik tajuddin
The document outlines the key responsibilities and activities of a financial manager. As a financial manager, one would be expected to prepare financial statements and reports, analyze market trends for expansion opportunities, ensure legal and regulatory compliance, and advise senior management on profit-maximizing strategies. Financial managers oversee budgeting, accounting, investments, and financing to achieve the long-term financial goals of the organization. They must have strong analytical, communication, and detail-oriented skills to perform capital budgeting and make optimal investment and financing decisions.
A stuy on interpretation and analysis of ratio analysis and performance evalu...Projects Kart
The document discusses performance evaluation on financial statements. It begins with an introduction on the importance of financial management in businesses. It then discusses the meaning of key terms like financial management, financial statements, and financial analysis and interpretation. It outlines the objectives, scope, and importance of financial statement analysis. Finally, it discusses the methodology, sources of data, types of analysis and the objectives of the study. The key points are:
1. Financial management is important for efficient use of capital funds and raising funds at lower costs.
2. Financial statements include the balance sheet and profit/loss statement and provide information on financial position and performance.
3. Financial analysis and interpretation involves studying relationships in financial data to evaluate profit
Measuring performance of microfinance institutions a framework for reportin...snb9899
This document provides an overview and summary of the "Measuring Performance of Microfinance Institutions: A Framework for Reporting, Analysis, and Monitoring" framework developed by the SEEP Network Financial Services Working Group. The framework aims to standardize financial terms, ratios, and adjustments for microfinance performance monitoring. It includes chapters on financial statements, analytical adjustments, financial ratios and indicators, and promoting adoption of the framework. The summary highlights key aspects of each chapter, including recommended financial reports, adjustments, and standardized ratios for analyzing and benchmarking microfinance institution performance.
An Empirical Analysis on the Nature of Relationship between Capital Structure...iosrjce
The financing decision with regard to capital structure theory of finance has been a topic of many
theories and their conflicting output for past many years. This paper aims to analyse the nature of relationship
between the capital structure of a firm and its performance. The data of 40 firms excluding financial services
firms listed on Nifty indices on National Stock Exchange is studied (The composition of 50 firms on Nifty
represents a well branch out index reflecting precisely the overall market conditions). Financial services firms
have been excluded from purview of this paper, as they are in the business of collecting money and investing in
financial assets rather than producing goods, hence follow a unique business valuation model. Further financial
services sector being one of the most sensitive sectors. This paper analyzes a period of 13 years (2001-2014)
covering the phases of a business cycle starting from boom (2001/02-2006/07), recession (2007/08-2008/09)
and then recovery (2009/10-2013/14). The complete business cycle will aid to demonstrate the results more
accurately. This paper also surveys the topical developments in the empirical capital structure research. The
data for a period of 13 years is analysed using descriptive statistics, correlation and multiple regression
techniques. For research purpose, the ratios such as debt-equity ratio, debt-asset ratio and long term debt are
taken as independent variables whereas Net Profit, Net Profit Margin, ROCE, ROE and ROA are the ratios
taken as dependent variables.
A Study on Performance Analysis of Nestle India Limited with Specific Referen...paperpublications3
Abstract: “Finance is the blood of the organization” Finance is used by individuals (personal finance), by government (public finance), by business (corporate finance), as well as by a wide variety of organization including school and non-profit organizations. Finance is one of the most important aspects of business management. Financial management is two way process in which finances manager obtain funds and money at low cost and risk and use it in higher earning project at minimum risk.
Financial performance analysis is the process of identifying the financial strengths and weaknesses of the firm by properly establishing the relationship between the items of balance sheet and profit and loss account. It also helps in short-term and long term forecasting and growth.
This study has aimed in identifying the financial performance of Nestle India Limited through DuPont analysis using the three factors, viz., profit margin, asset turnover and financial leverage.
This study very clearly implies through DuPont analysis, the Nestle India Limited profit is fluctuating and was stagnant consecutively for three years.
Tips and Tools for Great Financial ManagementGreenlights
The document provides tips and tools for effective financial management. It discusses assessing critical areas for improvement, identifying key resources like accounting staff and leadership, establishing policies and procedures, creating routines like a finance calendar and checklists, and developing an effective budgeting process. It emphasizes the importance of internal reporting to provide financial facts and measurements to help leadership make decisions.
This document provides an overview of financial statement analysis. It begins by defining business analysis as the process of evaluating a company's prospects and risks, which includes analyzing its environment, strategies, and financial position. Financial statement analysis is then introduced as applying analytical tools to financial statements to derive useful estimates for business analysis. The chapter outlines the major components of business analysis and the role of financial statements. It previews various tools for financial statement analysis, including comparative analysis, ratio analysis, and cash flow analysis. The objectives are to explain the relationship between financial statement analysis and business analysis, describe how financial statements reflect business activities, and introduce basic analysis techniques.
This document provides an overview of key concepts in financial reporting and US Generally Accepted Accounting Principles (GAAP). It discusses the major standards-setting bodies that establish GAAP, including the SEC, FASB, and AICPA. It also summarizes the conceptual framework underlying financial reporting, including assumptions, principles, elements of financial statements, and recognition and measurement guidelines.
This document discusses liquidity ratios and how they can change based on a company's financial decisions. It defines two key liquidity ratios: the current ratio and acid test ratio. The current ratio measures current assets available to cover current liabilities, while the acid test only considers more liquid current assets. The document then demonstrates how taking on short-term debt or increasing capital can impact these ratios, making liquidity stronger by applying long-term resources to current assets but weaker by using short-term debt for fixed assets.
Financial management involves raising funds, using funds profitably based on risk levels, planning operations and controlling performance. It guides investment decisions, judges operations and projects, and aims for adequate returns. Financial management is concerned with efficient use of capital funds and management decisions regarding asset acquisition and financing. Its goals are to maximize profits and shareholder wealth while maintaining adequate liquidity and ensuring operational efficiency and financial discipline.
Chapter 1 - Overview of Financial Statement Analysis
Solution Manual Wild
Financial Statement Analysis -
f i n a n c i a l
s tat e m e n t
a n a l y s i s
TENTH EDITION
K. R.
SUBRAMANYAM
JOHN J. WILD
Financial Management is seeing to it that schools have the funds it requires to meet its goals in its quest to becoming a sustainable and viable institution and that value for money is gained for such funds expended.
Management accounting involves partnering with management in decision making, planning and performance management. It provides managers with financial and non-financial information to make informed business decisions and better manage and control operations. Some key aspects of management accounting include arranging financial accounting information, using cost accounting techniques, measuring performance, assessing risks, allocating resources, and supplying information to management for planning and decision making.
The document provides an introduction to management accounting, including definitions, objectives, nature, and scope. It defines management accounting as partnering in management decision making and providing financial reporting expertise to assist with strategy formulation. The objectives of management accounting are to modify and rearrange financial data for analysis, interpretation, organizing resources, communication, planning, decision making, and coordination. It also discusses the differences between cost accounting, financial accounting, and management accounting.
Financial management involves planning, organizing, directing and controlling the financial activities of a business or organization. It includes procuring and allocating financial resources efficiently to achieve the goals of the entity. The key elements of financial management are investment decisions, financial decisions regarding sources of financing, and decisions around dividend distribution. The objectives of financial management are to ensure regular funding, returns for shareholders, optimal fund utilization, safety of investments, and a sound capital structure.
This document discusses short-term financial management and managing the cash conversion cycle. It covers key aspects like the operating cycle, cash conversion cycle, inventory management techniques like EOQ and JIT. It also discusses accounts receivable management including credit policies, collection policies, and receipts and disbursements management to reduce float. Current liabilities management concerning accounts payable and payment periods is also summarized. The overall goal of short-term financial management is to balance profitability and risk related to working capital management.
Financial statement analysis involves calculating ratios to evaluate a company's profitability, liquidity, asset use, financial stability, and market performance over time. It is more than just analyzing numbers - it requires understanding a company's industry, strategy, annual reports, economic conditions and more. For the Quorum Group, the investor should calculate relevant ratios such as profit margins, asset turnover, debt-to-equity, and compare trends over time to evaluate the company's financial performance and position for investment purposes.
El documento describe los animales nativos de diferentes regiones del Perú, incluyendo la costa, sierra y selva, así como algunos animales foráneos que llegaron al país. En la costa se encuentran el pelícano, pingüino de Humboldt, lobo marino y camarón. En la sierra habitan la vicuña, cuy, y condor andino. La selva es el hábitat del paiche, anaconda, loro, sajino y gallito de las rocas. Animales foráneos como la vaca, perro y caballo también se describ
This document certifies that Karoon Oxin Sanat Trading Company is the authorized agent of Darling Muesco Pvt. Ltd. for their products in Iran from October 1, 2013 to September 30, 2015. Darling Muesco Pvt. Ltd. is an ISO 9001 registered company located in Ahmedabad, India that manufactures pneumatic control valves, safety relief valves, and automatic control valves.
The document provides a 30-day starter plan for email marketing. It includes a 10-step checklist for setting up and implementing an email marketing campaign over 30 days. The plan recommends setting goals, auditing resources, setting up email marketing accounts, building contact lists, designing email templates, writing email content, scheduling emails, analyzing reports, creating autoresponders, and testing campaigns. Each step includes guidance and best practices for email marketing.
Measuring performance of microfinance institutions a framework for reportin...snb9899
This document provides an overview and summary of the "Measuring Performance of Microfinance Institutions: A Framework for Reporting, Analysis, and Monitoring" framework developed by the SEEP Network Financial Services Working Group. The framework aims to standardize financial terms, ratios, and adjustments for microfinance performance monitoring. It includes chapters on financial statements, analytical adjustments, financial ratios and indicators, and promoting adoption of the framework. The summary highlights key aspects of each chapter, including recommended financial reports, adjustments, and standardized ratios for analyzing and benchmarking microfinance institution performance.
An Empirical Analysis on the Nature of Relationship between Capital Structure...iosrjce
The financing decision with regard to capital structure theory of finance has been a topic of many
theories and their conflicting output for past many years. This paper aims to analyse the nature of relationship
between the capital structure of a firm and its performance. The data of 40 firms excluding financial services
firms listed on Nifty indices on National Stock Exchange is studied (The composition of 50 firms on Nifty
represents a well branch out index reflecting precisely the overall market conditions). Financial services firms
have been excluded from purview of this paper, as they are in the business of collecting money and investing in
financial assets rather than producing goods, hence follow a unique business valuation model. Further financial
services sector being one of the most sensitive sectors. This paper analyzes a period of 13 years (2001-2014)
covering the phases of a business cycle starting from boom (2001/02-2006/07), recession (2007/08-2008/09)
and then recovery (2009/10-2013/14). The complete business cycle will aid to demonstrate the results more
accurately. This paper also surveys the topical developments in the empirical capital structure research. The
data for a period of 13 years is analysed using descriptive statistics, correlation and multiple regression
techniques. For research purpose, the ratios such as debt-equity ratio, debt-asset ratio and long term debt are
taken as independent variables whereas Net Profit, Net Profit Margin, ROCE, ROE and ROA are the ratios
taken as dependent variables.
A Study on Performance Analysis of Nestle India Limited with Specific Referen...paperpublications3
Abstract: “Finance is the blood of the organization” Finance is used by individuals (personal finance), by government (public finance), by business (corporate finance), as well as by a wide variety of organization including school and non-profit organizations. Finance is one of the most important aspects of business management. Financial management is two way process in which finances manager obtain funds and money at low cost and risk and use it in higher earning project at minimum risk.
Financial performance analysis is the process of identifying the financial strengths and weaknesses of the firm by properly establishing the relationship between the items of balance sheet and profit and loss account. It also helps in short-term and long term forecasting and growth.
This study has aimed in identifying the financial performance of Nestle India Limited through DuPont analysis using the three factors, viz., profit margin, asset turnover and financial leverage.
This study very clearly implies through DuPont analysis, the Nestle India Limited profit is fluctuating and was stagnant consecutively for three years.
Tips and Tools for Great Financial ManagementGreenlights
The document provides tips and tools for effective financial management. It discusses assessing critical areas for improvement, identifying key resources like accounting staff and leadership, establishing policies and procedures, creating routines like a finance calendar and checklists, and developing an effective budgeting process. It emphasizes the importance of internal reporting to provide financial facts and measurements to help leadership make decisions.
This document provides an overview of financial statement analysis. It begins by defining business analysis as the process of evaluating a company's prospects and risks, which includes analyzing its environment, strategies, and financial position. Financial statement analysis is then introduced as applying analytical tools to financial statements to derive useful estimates for business analysis. The chapter outlines the major components of business analysis and the role of financial statements. It previews various tools for financial statement analysis, including comparative analysis, ratio analysis, and cash flow analysis. The objectives are to explain the relationship between financial statement analysis and business analysis, describe how financial statements reflect business activities, and introduce basic analysis techniques.
This document provides an overview of key concepts in financial reporting and US Generally Accepted Accounting Principles (GAAP). It discusses the major standards-setting bodies that establish GAAP, including the SEC, FASB, and AICPA. It also summarizes the conceptual framework underlying financial reporting, including assumptions, principles, elements of financial statements, and recognition and measurement guidelines.
This document discusses liquidity ratios and how they can change based on a company's financial decisions. It defines two key liquidity ratios: the current ratio and acid test ratio. The current ratio measures current assets available to cover current liabilities, while the acid test only considers more liquid current assets. The document then demonstrates how taking on short-term debt or increasing capital can impact these ratios, making liquidity stronger by applying long-term resources to current assets but weaker by using short-term debt for fixed assets.
Financial management involves raising funds, using funds profitably based on risk levels, planning operations and controlling performance. It guides investment decisions, judges operations and projects, and aims for adequate returns. Financial management is concerned with efficient use of capital funds and management decisions regarding asset acquisition and financing. Its goals are to maximize profits and shareholder wealth while maintaining adequate liquidity and ensuring operational efficiency and financial discipline.
Chapter 1 - Overview of Financial Statement Analysis
Solution Manual Wild
Financial Statement Analysis -
f i n a n c i a l
s tat e m e n t
a n a l y s i s
TENTH EDITION
K. R.
SUBRAMANYAM
JOHN J. WILD
Financial Management is seeing to it that schools have the funds it requires to meet its goals in its quest to becoming a sustainable and viable institution and that value for money is gained for such funds expended.
Management accounting involves partnering with management in decision making, planning and performance management. It provides managers with financial and non-financial information to make informed business decisions and better manage and control operations. Some key aspects of management accounting include arranging financial accounting information, using cost accounting techniques, measuring performance, assessing risks, allocating resources, and supplying information to management for planning and decision making.
The document provides an introduction to management accounting, including definitions, objectives, nature, and scope. It defines management accounting as partnering in management decision making and providing financial reporting expertise to assist with strategy formulation. The objectives of management accounting are to modify and rearrange financial data for analysis, interpretation, organizing resources, communication, planning, decision making, and coordination. It also discusses the differences between cost accounting, financial accounting, and management accounting.
Financial management involves planning, organizing, directing and controlling the financial activities of a business or organization. It includes procuring and allocating financial resources efficiently to achieve the goals of the entity. The key elements of financial management are investment decisions, financial decisions regarding sources of financing, and decisions around dividend distribution. The objectives of financial management are to ensure regular funding, returns for shareholders, optimal fund utilization, safety of investments, and a sound capital structure.
This document discusses short-term financial management and managing the cash conversion cycle. It covers key aspects like the operating cycle, cash conversion cycle, inventory management techniques like EOQ and JIT. It also discusses accounts receivable management including credit policies, collection policies, and receipts and disbursements management to reduce float. Current liabilities management concerning accounts payable and payment periods is also summarized. The overall goal of short-term financial management is to balance profitability and risk related to working capital management.
Financial statement analysis involves calculating ratios to evaluate a company's profitability, liquidity, asset use, financial stability, and market performance over time. It is more than just analyzing numbers - it requires understanding a company's industry, strategy, annual reports, economic conditions and more. For the Quorum Group, the investor should calculate relevant ratios such as profit margins, asset turnover, debt-to-equity, and compare trends over time to evaluate the company's financial performance and position for investment purposes.
El documento describe los animales nativos de diferentes regiones del Perú, incluyendo la costa, sierra y selva, así como algunos animales foráneos que llegaron al país. En la costa se encuentran el pelícano, pingüino de Humboldt, lobo marino y camarón. En la sierra habitan la vicuña, cuy, y condor andino. La selva es el hábitat del paiche, anaconda, loro, sajino y gallito de las rocas. Animales foráneos como la vaca, perro y caballo también se describ
This document certifies that Karoon Oxin Sanat Trading Company is the authorized agent of Darling Muesco Pvt. Ltd. for their products in Iran from October 1, 2013 to September 30, 2015. Darling Muesco Pvt. Ltd. is an ISO 9001 registered company located in Ahmedabad, India that manufactures pneumatic control valves, safety relief valves, and automatic control valves.
The document provides a 30-day starter plan for email marketing. It includes a 10-step checklist for setting up and implementing an email marketing campaign over 30 days. The plan recommends setting goals, auditing resources, setting up email marketing accounts, building contact lists, designing email templates, writing email content, scheduling emails, analyzing reports, creating autoresponders, and testing campaigns. Each step includes guidance and best practices for email marketing.
Instruments used in biopharmaceutical applications are generally classified as either critical or non-critical, with some also allowing a third classification of diagnostic or reference. Critical instruments are calibrated quarterly as their failure or incorrect calibration could immediately impact product quality, while non-critical instruments are calibrated annually as they may impact secondary systems or non-quality parameters. The definitions of these classifications require some judgment in application and allow for flexibility, as not all systems can be defined exactly. Every instrument must be identified with one of these classifications and have a unique identification that remains with it for scheduling and record keeping.
- Atanu Acharya is seeking a challenging position in an organization that provides opportunities to contribute his 3+ years of experience in plant biotechnology, including marker assisted breeding, transgenic plants, and regulatory science.
- He has a M.Sc. in Biotechnology from Bangalore University and is currently working as a Research Associate at JK Agri genetics LTD in Hyderabad, having previously worked at Dow Agro-Sciences India PVT. Ltd. in Noida.
- His responsibilities have included marker assisted selection for disease resistance, working with transgenic plants, conducting experiments, and assisting with genetic purity analysis.
Financial is the result of an organized process that is commonly referred to as money management or financial planning and control. Financial planning is the process of managing money to achieve economic satisfaction. This planning process allows for controlling financial situation. Every organisation has a unique financial position, and any financial activity therefore must also be carefully planned to meet specific needs and goals. A comprehensive financial plan can enhance the quality of organisation life and increase future needs and resources. The specific advantages of personal financial planning include Increased effectiveness in obtaining, using, and protecting your financial resources throughout your lifetime The objective of the present study was to study the financial planning and to analyze the financial control. The tools applied for this study are Additional Fund Needed, Breakeven Analysis, Index analysis etc, findings reveals that the additional fund needed was increased during the study period. The company has to reduce the additional fund needed, dividend payout ratio, plant capacity and in order to increase the retained earnings and profit margin. For most companies, planning and controlling is a necessary but painful process. Unfortunately, it is often a prolonged exercise that takes so long that the starting assumptions are virtually meaningless by the time the process is complete. Add to that the rapidly increasing need for reporting and controls, both from investors and to meet regulatory requirements. As per the above observations and analysis the company will have to improve its financial planning and control for the upcoming years.
A study on financial performance analysis at cee veeAKHILHARIDAS
This document provides an overview of the global and Indian footwear industry. It discusses the history of footwear dating back to ancient civilizations. India has a large livestock population and is one of the largest producers and exporters of footwear globally, especially leather footwear. The key products exported are leather footwear, footwear components, leather garments, and leather goods. The footwear industry is concentrated in certain regions and states of India like Tamil Nadu, Delhi, Agra and Kanpur. The document also provides statistics on India's annual footwear production capacity and imports.
This document provides an introduction to financial management and ratio analysis. It discusses how financial management is important for resource allocation and profit maximization. Ratio analysis is also introduced as an important tool to study the financial position of companies by examining relationships between financial data points. The objectives, significance and methodology of ratio analysis are outlined. Limitations of ratio analysis for the study are also noted.
This document discusses financial management and provides an overview of funds flow statements. It defines financial management as dealing with the management of money matters. It also defines funds flow statements as statements that show the movement of funds and the sources and applications of funds for a business over a period of time. Funds flow statements are important as they help business owners and investors understand the incoming and outgoing cash flows of a business and assess its financial standing over time. The objectives of preparing funds flow statements are to analyze the movement of funds between balance sheet dates and identify changes in working capital elements.
minor project on ratio analysis of "......"Kh Corporate
This document is a project report submitted by [NAME] to Guru Gobind Singh Indraprastha University in partial fulfillment of the requirements for a Bachelor of Business Administration degree. The report focuses on ratio analysis of a particular industry and includes chapters on the introduction, research methodology, industry overview, company profile, theoretical perspective on ratio analysis, findings and analysis, and conclusions and recommendations. The introduction provides an overview of the study and its objectives, scope, significance and limitations. The research methodology chapter outlines the statement of the research problem, data collection process, presentation tools used, and research tools.
Nmp 650 e portfolio #1 gbwhite 11 7-2013Trudiwhite
The document discusses key elements of proper financial decision making for nonprofits. It outlines important financial management tools like budgets, financial reports, and diagnostic tools. It emphasizes the importance of accurate financial information, appropriate reports, and accountability. The overall goal of financial decision making is to use resources and funds designated for the mission, while also ensuring flexibility to address unforeseen issues and maintaining the financial health of the organization.
FINANCIAL PERFORMANCE ANALYSIS OF BHARTI AIRTEL LIMITEDyashmin khatun
This document discusses financial statement analysis and ratio analysis. It provides background on analyzing a company's financial stability, profitability, and performance over time using various ratios and comparisons. The objectives are to analyze the financial position, liquidity, and profitability of Bharti Airtel over a five year period and identify its financial strengths and weaknesses. Limitations include a lack of structured data from the company and a limited three year study period relying on secondary data. A literature review found previous research analyzing the relationship between working capital management, cash conversion cycles, and company profitability.
financial management project- ratio analysisyogita varma
This document is a project report submitted by Miss Yogita Savarmal Varma to the University of Mumbai for an M.Com degree. The report analyzes the financial ratios of Idea Cellular Ltd for the academic year 2016-2017 under the guidance of Prof. Karim. The report includes a declaration by the student, acknowledgements, a table of contents, an introduction to financial management and ratio analysis, an introduction to Idea Cellular Ltd, financial statements of Idea Cellular Ltd, calculations of various financial ratios, and a conclusion.
1. Financial statements are prepared primarily for decision making and play a dominant role in setting the framework for management decisions. They provide information on a company's financial position, performance, and cash flows.
2. Financial statement analysis is the process of evaluating relationships between different components of financial statements to better understand a firm's financial position and performance. It helps identify trends and relationships to evaluate profitability, liquidity, and solvency.
3. Key methods of financial statement analysis include comparative analysis, common size analysis, ratio analysis, and trend analysis, which allow comparison of financial results to historical data and industry benchmarks.
1 4. Describe the financial approach to strategic healthca.docxhoney725342
This document discusses unique financial accounting rules that apply to not-for-profit and healthcare organizations. It explains that not-for-profits must disclose donor-imposed restrictions and provide statements of functional expenses. Healthcare organizations must report revenues net of contractual allowances and charity care. The document also discusses rules around charity care, noting that hospitals must provide free or reduced-cost care to those below certain income thresholds defined by states in order to maintain not-for-profit status. Examples of charity care rules from Washington, New Jersey, and California are provided.
This document summarizes a study on internal controls of local governments. It discusses that internal controls are important for local governments to achieve objectives like accurate financial reporting and compliance with regulations. The study defines internal controls as processes put in place by management to reasonably ensure objectives are met in areas like operations, financial reporting reliability, and compliance. It also discusses management's responsibility for internal controls and financial statements like the balance sheet, income statement, and cash flow statement. The study concludes that while the local government under review has an effective internal control system, there are challenges in fully implementing controls across all locations.
ALL THE DETAILS ARE MENTIONED IN THE DOCUMENT RELATED TO ALL 4 PERSPECTIVES OF BSC.
-REFERRED MAINLY FOR STRATEGIC COST MANAGEMENT.
-INCLUDES ALL THE EXPLANATION WITH APPROPRIATE EXAMPLES & CASE STUDY
Management Accounting Unit - 4. B.Com(Hons)/B.Com/BBA/MBApdfUmakantAnnand
Management Accounting
B.Com (Hons) Semester - 4th
Unit -4
University of Lucknow, Lucknow
Financial Statement Analysis:
The term ‘financial analysis’, also known as analysis and interpretation of financial statements’, refers to the process of determining financial strengths and weaknesses of the firm by establishing strategic relationship between the items of the balance sheet, profit and loss account and other operative data. “Analyzing financial statements,” according to Metcalf and Titard, “is a process of evaluating the relationship between component parts of a financial statement to obtain a better understanding of a firm’s position and performance.”
In the words of Myers, “Financial statement analysis is largely a study of relationship among the various financial factors in a business as disclosed by a single set-of statements and a study of the trend of these factors as shown in a series of statements.”
Objectives and Importance of Financial Statement Analysis:
The primary objective of financial statement analysis is to understand and diagnose the information contained in financial statement with a view to judge the profitability and financial soundness of the firm, and to make forecast about future prospects of the firm. The purpose of analysis depends upon the person interested in such analysis and his object.
However, the following purposes or objectives of financial statements analysis may be stated to bring out the significance of such analysis:
1) To assess the earning capacity or profitability of the firm.
2) To assess the operational efficiency and managerial effectiveness.
3) To assess the short term as well as long term solvency position of the firm.
4) To identify the reasons for change in profitability and financial position of the firm.
5) To make inter-firm comparison.
6) To make forecasts about future prospects of the firm.
7) To assess the progress of the firm over a period of time.
8) To help in decision making and control.
9) To guide or determine the dividend action.
10) To provide important information for granting credit.
Parties Interested in Financial Analysis:
The following parties are interested in the analysis of financial statements:
1) Investors or potential investors.
2) Management.
3) Creditors or suppliers.
4) Bankers and financial institutions.
5) Employees.
6) Government.
7) Trade associations.
8) Stock exchanges.
9) Economists and researchers.
10) Taxation authorities
Limitations of Financial Statement Analysis:
Some of the important limitations of financial analysis are, however, summed up as below:
1) It is only a study of interim reports
2) Financial analysis is based upon only monetary information and non-monetary factors are ignored.
3) It does not consider changes in price levels.
4) As the financial statements are prepared on the basis of a going concern, it does not give exact position. Thus accounting concepts and conventions cause a serious limitation to financial analysis.
The document discusses evaluating the financial performance of healthcare organizations. It describes three key steps: 1) selecting performance measures like profitability, liquidity, leverage, and activity from financial statements; 2) setting standards by comparing to past performance, budgets, or industry benchmarks; 3) calculating measures, comparing to standards, and interpreting results. The document provides examples of financial statements and calculates profitability measures like operating margin for a sample hospital.
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The document provides definitions of management accounting from three sources and discusses the differences between financial accounting and management accounting. It also lists different types of costs.
For question one, definitions of management accounting are given from three authors/sources. Question two outlines seven key differences between financial accounting and management accounting, such as users, emphasis on the future, flexibility of data, and adherence to GAAP. Question three lists variable costs, which change proportionally with activity levels, and fixed costs, which remain constant regardless of activity levels.
Finance is the lifeblood and lifeline of any business entity either commercial or non-commercial. The
Survival, Stability and Sustainability of a firm is highly associated with its financial wellness. It can be observed through its ability to pay(re) short-term as well as long term liabilities, meeting the regular financial obligations, to increase the value of firm and ability to generate profit. Financial analysis, evaluation, and assessment help in determines the financial position and financial strength of a firm. Among the plenty of methods and tolls available for financial performance, ratio analysis is more useful and meaningful. These ratios make it possible to analyze the evolution of the financial situation of a firm (trend analysis), cross-sectional analysis and comparative analysis.
1. PA 645 NON-PROFIT FINANCIAL MANAGEMENT AND BUDGETING
FINAL EXAMINATION - SPRING 2014
This examination should represent your own work and not that of others or the product of group work. If you
have questions about the exam, you should contact the instructor and not others in the class. This examination
consists of three parts: Part I is worth 30 points toward the grade on the examination; Part II is worth 40 points;
and Part III is worth 30 points.
PART I. -- ESSAY QUESTION (30 points). Answer only one of the following essay questions. The essay
question should be able to be answered in 2-3 typed, double-spaced pages. Your response to the question
should integrate concepts covered in the course, be well organized, and indicate a logical development of
your arguments. Be sure to cite examples from the readings, articles, cases and analyses discussed in the
course to support points raised in your response.
1. Discuss the usefulness of management control concepts discussed in the course for financial management
in nonprofit organizations. Be sure to discuss how planning and budgeting fit into the management
control process to create a more integrated financial management system.
As the nonprofit sector has developed, professionalization within the field has created an
opportunity to capitalize on the momentum driven by increased support from both public and
private donors. In keeping step with this development, the demand on management of nonprofit
organizations and good stewardship of donated funds, has increased. Meeting this demand has
highlighted the importance of healthy, accountable systems within management control
processes, motivated by the organization's mission and guided by both the professionals and
volunteers within the organization.
One of the most important systems extant in management control process is the budget cycle
as outlined by Finkler (2010): budget preparation, budget review and adoption, budget
implementation and evaluation of results/feedback. As was noted in the analysis of Hamilton
Hospital (Case Study 1), the budget cycle can guide the necessary changes in administrative and
communication processes. Taking the necessary time to use the cycle as an organizational
process allows managers to garner relevant financial data from units and departments as well as
anecdotal and qualitative data from employees, clients and community constituents. Each phase
of the cycle allows for an eye toward strategic planning--assessing the efficacy of current
strategies, identifying emergent strategies and relating the information to the current and future
2. financial state of the organization.
As the budget is implemented, the working capital management cycle, defined in Finkler
(2010) as collecting cash, paying for supplies, paying workers and issuing invoices, begins to
govern daily operations. This increases the necessity for management control processes focused
on accountability and security as mentioned in Gallagher & Radcliffe (2002); such procedures
include background checks, separation of duties and systems of authorizations. These controls
maintain the integrity of the capital management cycle as it serves two purposes: actualizing the
mission and maintaining daily operations.
While there are a plethora of considerations within the budget implementation phase,
including grappling with capital investments as in the Yoland Research Institute (Case Study 5),
operating reserves and liquidity management (McLaughlin, 2009; Calabrese, 2012; Mundy,
1990) and cost allocation as in Harbor City Children's Center (Case Study 4), the primary focus
centers around program administration. The stewardship of funds continues to play a large role,
examining how revenue moves through the organization as a function of operations; this function
relates back to the budget review and feedback phase, which, in a healthy organization, runs
concurrent to operations prior to moving into the planning phase for the upcoming fiscal year.
Utilizing the budget cycle as a framework provides an effective manager and leader with
important checkpoints to maintain organizational health. As the organization circles around to
planning the budget for the upcoming year, Finkler's (2010) variance analysis can be used to
evaluate performance of specific programs, units, departments and even managers. While not
encouraging micromanagement, this focus on what went well and what could be improved can
guide decisions across the entire organization.
This sets the stage for implementing additional processes designed to mediate problems like
ratio analysis or increase outputs and outcomes like breakeven analyses. While a complete focus
on management control processes cannot be the only focus an effective manager and leader
3. utilizes, an integrated financial management process--one which serves as a guide and
culmination of other important organizational efforts--is pivotal to maintain the health and
viability of organizations driven to provide valued and necessary public services.
2. Based on your experience performing a financial statement analysis of your group’s nonprofit agency and
discussing another group’s financial statement analysis, what role can ratio analysis play in assessing the
financial situation of a nonprofit organization? Be sure to explain how such reviews are accomplished
through the use of ratio analysis and its value in formulating a financial assessment of a nonprofit
organization.
PART II. -- SHORT ANSWER QUESTIONS (ANSWER ONLY 4 OUT OF THE FOLLOWING 6
QUESTIONS!!!!) Choose 4 of 6 short answer questions at 10 points each--40 points total on short answer
questions. The short answer questions should be able to be answered in one typed, double-spaced page or
less. Indicate clearly the question to which you are responding. Be sure to cite readings, articles, cases,
and analyses discussed in the course to support points raised in your response.
1. Describe how the process of recording financial transactions and generating financial statements works
with respect to the fundamental accounting equation and GAAP requirements for nonprofit organizations.
2. Discuss the purpose and use of required financial statements and how they result from the process of
recording financial information for nonprofit organizations.
3. Identify at least two aspects of accounting for nonprofit organizations that are unique and discuss why
they are an issue.
While it can be argued that nonprofit organizations and for-profit organizations share
many best practices, accounting within the nonprofit sector differs slightly to that of for-profits.
There are unique restrictions and requirements based upon the makeup of nonprofit revenue--a
conglomeration of publicly donated funds, granted funds and so on. This revenue stream requires
nonprofits to account for funds in a more specific manner than that of the for-profit sector. In
doing this, nonprofit organizations generally use fund accounting to track revenue categories,
particularly those which are donor-generated.
In addition to the recording of transactions and fund balances, nonprofits are required to
provide financial statements of financial position, statements of activities, and statements of cash
flows (Finkler, 2010); these are much more specific statements than the for-profit statements of
profits & losses (P&L's). These statements track the relationship of direct and indirect costs, cash
4. inflows and outflows as well as specific activities performed by the organization. Within these
statements, nonprofit organizations facilitate an understanding of how the organization is
meeting its mission and maintaining solvency.
4. What is the purpose of working capital management and how should it be accomplished in nonprofit
organizations?
Working capital management as outlined by Finkler (2010) is the process by which an organization's
current assets and liabilities are used to maximum financial effect. Incorporated into the process is the
acquisition of liquid assets, paying for supplies and inventory, paying employees and invoicing for
services--a cycle of inflows and outflows in an organization. To manage this process effectively,
consideration must be given to investing and collections in both the long-range and short-term health of
the organization.
Mundy (1990) suggests a ladder-step structure to short-term investing; managers should create a
calendar which allows access to short-term resources; comfortable windows of time can be established,
based upon revenue inflows, with short-term investments that release according to a staggered timeline.
An organization might look at CD's that release in 6-month increments with short-term mutual fund
investments occurring between major release times. Working with these marketable securities allows an
organization to make its money work while it waits to be used. As Finkler (2010) points out, an eye
toward legality, risk, yield and liquidity are important factors to consider, but there is a larger push for
organizations to activate working capital beyond daily operations.
While it is important that working capital management include an understanding of operating
reserves (Calabrese, 2012) and necessary cash for daily operations (Finkler, 2010), maximizing the
impact of liquid assets is a matter of understanding when to apply heat to assets (McLaughlin, 2009);
investment can be an action which includes renewing capital assets or even eliminating such assets if the
need is there. In managing this liquidity, accounts receivable plays a large role in keeping cash flowing
into the organization. In this regard, additional control processes are activated; managing both the billing
and collections process are vital to the organization. If these processes are disjointed and inefficient, the
5. organization risks depleting its working capital and its operating reserves in such a manner that business
can no longer be done. All of these components play an important role in managing the working capital of
an organization.
5. Explain how variance analysis fits into the context of management control to achieve accountability and
control in nonprofit organizations.
Variance analysis is used to understand the results of processes within the organization; Finkler
(2010) identifies that variance analysis serves to assist in improving the budgeting process, implementing
appropriate control measures in the current year and evaluating the performance of departments and
managers. With these pieces of information, an executive officer and the board can begin to implement
strategies which contribute to the overall health of the organization, particularly as pertains to the
financial bottom line.
Finkler (2010) and McLuaughlin (2009) identify multiple areas where variance can occur: total
output, departmental, and within a single line-item. Once identified, the reason for the variance can be
connected to the result and rationale can be evaluated. In some cases, variance can be a positive value,
due to effective cost analysis or improved administrative processes. Variance can also intimate
organizational challenges in production or over-spending on particular line-items.
Maintaining an eye toward understanding variance analyses allows for managers to pinpoint
specific problems and highlight opportunities, a powerful theme in the study of financial management;
with an understanding of how to interpret variance, managers can be more effective in managing the
relationship between inputs and outputs. While nonprofits differ from for-profit organizations, the
principle of efficiency still plays a large role in the success of the organization.
6. What cautions should apply to the use of ratio analysis and why?
In utilizing ratio analysis to interpret data from nonprofit organizations, there are several
considerations which must be made: how the organization produced the financial statements
used as the basis for comparison, the scope of the comparison and whether it will include
mimetic organizations or industry standard ratios and, finally, the value of ratios used to assess
6. the organization.
Though each nonprofit organization is required to supply statements of financial position,
activities and cash flows, these statements may be specific to the organization or industry; it is
important to include financial statement notes in compiling ratios as well as interpreting them.
These attachments to financial statements serve to supplement the information presented in
efforts to clarify the method and rationale for reporting. This is a critical consideration to
facilitate the understanding of the values to be used to compute the initial ratios.
Once ratios have been calculated, an agreement should be made regarding the scope of the
comparison: will the comparison simply focus on industry standard ratio behavior? Will the
comparison sample include organizations with similar size, scope and purpose? Without this in
place, ratio analysis is confined to the historical behaviors of the organization which may not
serve the purpose of the analysis. Additionally, allowing the organization to self-select its sister
organizations may skew results of any analysis.
Though there are commonly used classes of ratios, outlined in Finkler (2010) like common
ratios or leverage ratios, it is important to identify ratios which actually reflect the life and
purpose of the organization being analyzed. While asset turnover ratios might be important for
working capital management in an inventory-driven organization, intangible service providers
like cultural or educational organizations may not find much value in focusing on that class of
ratios. Additionally, there are other ratios from various sources including the Urban Institute
and researchers in various fields which may need to be considered or possibly create more
accurate depictions of organizations.
While ratio analysis can be a valuable internal and external tool when considering the
financial health of an organization, it is important to understand how the organization sees what
it does, the methodology behind the comparison and areas of focus within the analysis itself. As
these areas are addressed, the ratio analysis moves toward being an accurate reflection of the
7. organization as it is positioned within itself, its industry and the nonprofit sector.
III. -- Problem and Application Questions (15 points each, Total of 30 points). Answer only two of
the following three problems. Clearly show all of your calculations. Label your work
appropriately.
1. Breakeven Analysis
The Children’s Museum is considering catering birthday parties for members as a way to
generate revenue. The costs are as follows:
Staff $90
Cake and Food $60
Decorations $30
In addition, party favors have a variable cost of $5 per child.
a. Find the break-even price per child assuming that 12 children (the break-even quantity)
attend
each party.
b. If the Museum expects to make a profit of $300 on every party (treat profit as an additional
fixed cost), find the price per child to break even and produce the $300 profit on every party
(again assume 12 children attend each party).
c. Discuss managerial implications and other considerations of the break-even analysis results.
For components 1a & 1b, please see table below:
Expenses
Fixed Cost
Staff $90
Cake and Food $60
Decorations $30
$180
Variable Cost
Favors $5
# of Attendees 12
$60
Breakeven
Cost/child $20
Breakeven + $300 profit $45
Cost/child
1c. Narrative Response:
Breakeven analysis as a function provides managers information regarding when or at what
8. point, an investment will be returned. According to Finkler (2010), organizations utilizing breakeven
analysis gain valuable insight into necessary price point, investment turnover and cost opportunities.
Breakeven analyses can be used to determine an appropriate price for services rendered to reduce
or eliminate risk in service-based programming. Inversely, breakeven analysis can be used to determine
the maximum units of service to be provided while avoiding additional costs to the organization. This
indicates that breakeven analysis can be utilized to establish limits or maximums for price of service to
the consumer, cost of service to the organization and the volume of services rendered, positive or
negative. In the example provided, The Children’s Museum is given an idea of what fixed costs are as a
specific category, what variable costs are and the end results; this information then becomes malleable
as program needs and goals are discussed.
Breakeven analysis can also be tied to investment or asset turnover timelines, providing a longer
view of organizational function; the analysis nominally predicts cash flow as relates to volume.
Understanding when and how a breakeven point exists, allows for managers to make determinations
regarding both volume and price as controllable qualities in organizational work flow (Finkler, 2010).
The example analysis provides insight into budgeted amounts, guiding the event planning process and at
what price point the desired 12 guests will return the initial investment to the Museum.
Utilizing this knowledge, managers can realize cost opportunities: can this program support
itself? Are program goals realistic (e.g. can the necessary volume be achieved?) and is the organization
in a financial position to zero out its obligations? While there are additional considerations in financial
decision-making like contribution margin (Finkler, 2010), breakeven analysis is a starting point for
determining the financial capacity of an organization and its ability to keep its feet on the ground.
2. Cost Accounting Problem
The table below provides the costs associated with running community health clinics by a
nonprofit agency. The agency has two mission centers (primary activities) and two general
service (supporting) departments. Assume the nonprofit agency is attempting to determine the
full costs of providing the services in the two primary activities. The direct expenses charged
9. to the centers are as indicated in the table. The floor space in square feet occupied by the centers,
the number of client visits, and the number of billing and payment documents processed per
center are indicated in the table. Centers should be allocated based on data provided in the
table. Determine the full costs of the primary mission centers by using the step-down method.
Calculate and indicate the full costs and the unit costs for each primary mission center. Show
the complete step-down analysis and associated calculations.
Required narrative comments: What might the agency do with the information obtained? What
price should the agency charge in reimbursement billing for the two services provided based on
this analysis. Why? What other considerations might enter into the pricing decision? Show
all calculations and clearly mark your work for reference.
Sq. Ft. Facility Space Client Visits Documents Processed
Adult Clinic 35,000 (43.75%) 9,000 75,000
Children’s Clinic 30,000 (37.5%) 6,000 50,000
Doc. Processing 15,000 (18.75%)
80,000 15,000 125,000
Mission Centers Service Centers
_______________________________________________________________________________________
Adult Clinic Children’s Clinic Maintenance Document Total
Processing
Direct Costs $920,000 $890,000 $700,000 $800,000 $3,310,000
Step-down Cost Distribution of Healthcare Nonprofit Agency
Support Maint Subtotal Processing Total
Maintenance $700,000 -$700,000 $0 $0 $0
Processing $800,000 $131,250 $931,250 -$931,250 $0
Mission
Adult Clinic $920,000 $306,250 $1,226,250 $558,750 $1,785,000
Children's Clinic $890,000 $262,500 $1,152,500 $372,500 $1,525,000
$3,310,000 $0 $3,310,000 $0 $3,310,000
Allocation Ratios Space (sq. ft.) % Client Visits % Processing %
Adult Clinic 35000 43.75% 9000 60.00% 75000 60.00%
Children's Clinic 30000 37.50% 6000 40.00% 50000 40.00%
Processing 15000 18.75% 0 0
Maintenance 0 0 0
80000 15000 125000
Fee Structure (in avg cost per visit)
Utilizing Step-Down Cost Distribution Utilizing Client Volume Ratio
Direct Cost Per Visit
10. Adult Clinic $198.33 Adult Clinic $1,986,000 $220.67
Children's Clinic $254.17 Children's Clinic $1,324,000 $220.67
$3,310,000
Narrative Response:
The information obtained from the step-down cost distribution analysis of this healthcare
organization can be used in several ways, alluding to the fluid nature of cost allocation Finkler (2010)
and McLaughlin (2009) use to guide their discussion of financial reporting. The information garnered
helps to determine strategies for enhancing noted opportunities and diminishing demonstrated
deficiencies within the organizational programming; this is particularly important when considering
direct and indirect costs associated with accomplishing the mission of an organization.
In the case of this healthcare agency, step-down distribution is achieved through allocating
maintenance expenses experienced by both mission and support centers, followed by allocating
processing center costs which serve to support the two mission centers—the Adult Clinic and the
Children’s Clinic. In this process, the organization understands what actual costs (in aggregate) the
mission centers are incurring. This process can provide valuable information for financial statements
and Form 990 reporting.
Some of the value of the knowledge ties directly to for-fee services rendered in mission centers;
with the knowledge gained from evaluating the step-down cost distribution, accurate prices for break
even points can be established. Utilizing the step-down method, it has been determined that the Adult
Clinic should charge, on average, $198.33 per visit and the Children’s Clinic should be around $254.17
per visit, based upon current volume and costs within the organization. Using a ratio determined by
client volume, all visits should be priced at an average $220.67. While both numbers are accurate, they
illustrate the power of the lens utilized to analyze financial figures. These prices can then be used for
upcoming budget projections and estimates for grant writing. Depending upon how the information
11. needs to be used, managers have standing with all three prices. This may impact how pricing is
determined, but may also influence decisions surrounding where to aim program development; if
children’s visits can be justifiably scaled higher than adult visits as exhibited in step-down distribution,
it would be reasonable to aim marketing and outreach efforts toward that targeted population. If the
organization were writing for sponsorship or grants, the higher price could be utilized to justify
increased support to defray client cost and potentially increase liquidity and profit ratios in the
organization.
3. Net Present Value/Cost-Benefit Analysis Problem.
The following table contains data prepared for two capital investment projects. (a) Use these data
to compute for each project the Net Present Value at discount rates of 10 and 4 percent. Clearly
show your calculations and how you arrived at your answers; (b) Describe the facts about the
projects that determine which project is preferable under each circumstance and why. What other
considerations might enter into a decision?
Project Year Capital Costs
($)
Maint. Costs
($)
Benefits ($)
0 2,000,000 0 0
1 1,000,000 10,000 0
2 500,000 70,000 120,000
3 90,000 600,000
A 4 90,000 800,000
5 90,000 800,000
6 90,000 800,000
7 90,000 800,000
8 90,000 800,000
9 100,000 800,000
10 100,000 500,000
0 2,500,000 0 0
1 500,000 50,000 750,000
2 100,000 750,000