6) Fiscal Management

Question 1

Budget

Answer 1

Mechanism to assess an organization’s/department’s success and progress

• Helps the manager control the implementation of a program

Question 2

Planning-Programming-Budgeting System (PPBS)

Answer 2

Plan for a new program developed from the mission and objectives

• Look at all programs for duplicates
• Evals cost and revenue against projections

Question 3

Zero-Base Budgeting

Answer 3

Takes a fresh look at each program at the beginning of the budget period and calculates the cost of running the program from as if it never existed

Question 4

Break-Even Budgeting

Answer 4

Traditional type of PT budget where the goal is to break even at the end of the year

• Based on incremental incr/decr from the prior year

Question 5

Productivity-Based Budgeting

Answer 5

Relies on manager’s decisions regarding staffing levels

• # of PT’s needed to provide services

Question 6

Cost Analysis

Answer 6

Determines expenses related to the production of a product/service

• Cost info is used to manage expenses and set prices

Question 7

Financial Management

Answer 7

Art of obtaining needed funds in the most economical manner and making optimal use of those funds

Question 8

Financial Professional

Answer 8

Studies business administration, accounting, or economics

Question 9

What does being financially savvy do and why?

Answer 9

It protects the income generated by your practice/dept bc you’ll understand where your dept stands

Question 10

Financial Statements

Answer 10

Reports that describe the financial position and operating results of an organization for a specified time period

Question 11

Balance Sheet

Answer 11

Summarizes the financial position of an organization as of a particular date

Question 12

Assets

Answer 12

Economic resources owned by an organization

• Liabilities + Owner’s Equity

Question 13

Liquid Assets

Answer 13

Can quickly be converted to cash

Question 14

Fixed Assets

Answer 14

Can’t be converted to cash

Question 15

What are some liabilities?

Answer 15

Debt & Accounts Payable

Question 16

Current Liabilities

Answer 16

Must be paid in the short-term (w/in 1yr)

Question 17

Long-Term Liabilities

Answer 17

Paid over the long-term

Question 18

Owner’s Equity

Answer 18

Portion of the assets that’s owned by the organization’s owners; Earnings from profitable operations

• Can incr through investment of resources by the owner

Question 19

Income Statement

Answer 19

Demonstrates an organizations profit (net income)/loss(net loss) from operations from a specific time period; Evals the organization’s performance comparing expenses vs revenue for a specific time period

Question 20

Formula for net income/loss

Answer 20

Revenue + Expenses

Question 21

Revenue

Answer 21

Income received for services sold during a specific period of time

Question 22

Operating Revenue

Answer 22

Revenue from sale of services

Question 23

Non-Operating Revenue

Answer 23

Revenue from other services

Question 24

Accrual Basis of Accounting

Answer 24

Revenue is recorded in the period that the revenue was made

Question 25

Cash Basis of Accounting

Answer 25

Revenue is recorded when $ is received

Question 26

Can income come from the assumption of risk and how?

Answer 26

Yes → Occurs in a capitated payment agreement

Question 27

Expenses

Answer 27

Money spent to produce goods/services during a specific period of time

Question 28

Capital Intensive

Answer 28

Money spent on equipment

Question 29

Labor Intensive Expenses

Answer 29

Money spent on salary and benefits

Question 30

Statement of Operations

Answer 30

Compares the projected income statement w/the actual income statement for a period of time * Looks at (+)/(-) variance

Question 31

Ratio Analysis

Answer 31

Financial statements that allow you to make comparisons btwn one piece of financial info and another

Question 32

Current Ratio

Answer 32

Compares current assets w/current liabilities * The higher the ratio, the better the organization's ability to pay its bills * Important to creditors and investors

Question 33

Quick Ratio

Answer 33

Compares liquid assets w/current liabilities

Question 34

Debt Ratio

Answer 34

Compares total liabilities to total assets; Gives the % of the assets that are financed by borrowing & determines if the organization is a good credit risk * A lower percent means less money is being borrowed

Question 35

Receivable Turnover Ratio

Answer 35

Avg # of days it takes to convert accounts receivable into cash * The older the debt, the less likely it is to be collected

Question 36

Revenue Productivity Ratio

Answer 36

Amount of revenue generated for each dollar of salary expense (Total Revenue/Salary Expenses) * An indicator of salary expense

Question 37

Return-on-Assets

Answer 37

Used to eval an organization's ability to earn a return on funds supplied from all sources (Net Income + Interest Expenses/Total Assets) * Justifies purchase of equipment * Higher Return = Higher Performance

Question 38

Cash Flow Statement

Answer 38

Demonstrates how an organization's cash balance changes over a specific period of time * Ultimately impacts an organization's ability to grow

Question 39

What is the most important use of financial info for an organization?

Answer 39

Financial Planning

Question 40

Operating Budget

Answer 40

Guides the operation by outlining tupes and levels of expenditures * Typically for a year, and then subdivided into quarters and months

Question 41

Chart of Accounts

Answer 41

Collect info about how money is spent and earned

Question 42

Fee Schedule

Answer 42

Listing of services and products provided by the practice

Question 43

What is revenue a function of?

Answer 43

Reimbursement Type

Question 44

Non-Operating Revenue

Answer 44

Incoming revenue that refers to the incoming money that adds value to the business but does not result directly from the sale of a product of or service

Question 45

Accounts Payable

Answer 45

Recording and payment of money owed by the business to its creditors

Question 46

Operating Costs

Answer 46

Cost of resources needed to produce the product or servuce

Question 47

Capital

Answer 47

Purchase of equipment and facilities that contribute to the production of goods and services

Question 48

Direct Expenses

Answer 48

Directly associated w/production * Salary, benefits, supplies, depreciation of equipment

Question 49

Indirect Expenses

Answer 49

Incurred but not directly related to service delivery * Administrative salaries, financial services, grounds/buildings, cafeteria

Question 50

Fixed Cost

Answer 50

Cost that's unchanged regardless of volume

Question 51

Variable Cost

Answer 51

Incr/decr relative to volume * Salaries, linen, and medical supplies

Question 52

Semi-Variable Cost

Answer 52

Basic cost is fixed, but per-use is variable

Question 53

Total Cost

Answer 53

Sum of fixed, variable, and semivariable cost