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Master In Hospital Management > Financial Management > Flashcards

Financial Management Flashcards

1
Q

measures the ability to meet short term obligations

A

Current ratio

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2
Q

Measures immediate liquidity

A

Quick ratio

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3
Q

Measures the average number of days it takes to collect cash from credit sales

A

Average collection period

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4
Q

Measures the average number of days the company holds its inventory before selling it.

A

Days sale period or days inventory held

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5
Q

Measures the average number of days it takes a company to pay its suppliers

A

Days payable outstanding

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6
Q

Metric that shows the amount of time it takes a company to convert its investment in inventory and other resource inputs into cash

A

Cash conversion cycle

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7
Q

Measures the ability of the firm to pay its short term obligations

A

Liquidity ratios

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8
Q

Measures the firms ability to use its assets and manage its liabilities effectively. Measures the speed at which accounts are converted into cash or revenue

A

Efficiency ratios /activity ratios

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9
Q

Measures the ability of the business to generate profits

A

Profitability ratios

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10
Q

Measures the degree to which assets are finance by debt or suppliers credit; measures the effectiveness of the company’s financing decisions and risk taking

A

Leverage ratios

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11
Q

Used by investors to determine whether or not to purchase stock in the company

A

Market ratios

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12
Q

Measures how many times the firms accounts receivable had been turned into cash during the year

A

Accounts receivable turn over

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13
Q

Measures how many times a firms inventory has been sold during the year

A

Inventory turnover

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14
Q

Measures how many times payables are paid during the year

A

Accounts payable turnover

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15
Q

Measures the effectiveness of management in generating revenues from investments in plant, property and equipment

A

Fixed asset turnover

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16
Q

Measures management’s effectiveness in generating sales from all of the firms assets

A

Total assets turnover

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17
Q

Shows the percentage of sales revenue after it covers all direct costs

A

Gross profit margin

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18
Q

Performance ratio that reflects the percentage of profit from operations, prior to subtracting interest charges and taxes

A

Operating profit margin

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19
Q

Measures how much profit is generated as a percentage of revenue

A

Net profit margin

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20
Q

Shows the percentage of how profitable company’s assets are in generating revenue

A

Return on assets

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21
Q

A performance measure used to evaluate the efficiency of an investment or compare the efficiency of a number of different investments

A

Return on investment

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22
Q

Measures the proportion of all assets that are financed with debt

A

Debt ratio

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23
Q

Indicates the relative proportion if shareholders equity and the funds supplied by creditors

A

Debt to equity ratio

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24
Q

Measures the amount of net income that is available for payment to the holders of its common stock

A

Earnings per share

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25
Q

The ratio of the company’s share price to the company’s earnings per share

A

Price-earnings ratio

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26
Q

Shows how much a company pays out in dividends each year relative its stock price

A

Dividend yield

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27
Q

Is the ratio of equity available to common shareholders dividend by the number of shares outstanding

A

Book value per share

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28
Q

The ratio of the total amount of dividends paid out to shareholders relative to the net income

A

Dividend payout ratio

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29
Q

Measures the average number of days that a patient stays in the hospital

A

Average length of stay

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30
Q

A measure of utilisation of the available bed capacity. Measures the percentage of beds occupied by patients for a given period of time (usually per year)

A

Bed occupancy rate

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31
Q

It is the number of times there is change in the occupant for a bed during a given time period

A

Bed turn over rate

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32
Q

Are written records that convey the business activities and the financial performance of a company

A

Financial statements

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33
Q

The three main financial statement reports are

A

Balance sheet
Income statement
Statement of cash flows

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34
Q

Shows the firms assets, liabilities and equity

A

Balance sheet

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35
Q

Are economic resources that are owned by Organizational and are expected to benefit future operations

A

Assets

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36
Q

Refers to cash and other assets that will be converted to cash or consumed once year from date of balance sheet

A

Current assets

37
Q

Refers to assets that have anticipated useful life that is considerably longer that 1 year

A

Non-current assets

38
Q

Are amounts due from customers for goods or services performed in normal course of business

A

Accounts receivable

39
Q

Assets held for sale in ordinary course to business

A

Inventory

40
Q

Tangible assets that are held for use by the firm for more that one period

A

Fixed assets

41
Q

Examples of fixed assets are ?

A

Land
Building
Equipments vehicles
Furniture

42
Q

Economic obligations that are owed by the firm and are expected to be paid in the future

A

Liabilities

43
Q

Obligations that are due to be settled within months from balance sheet date

A

Current liabilities

44
Q

Long term financial obligations that are after a year or more

A

Non current liabilities

45
Q

Are amounts due to vendors or supplies for goods and services received that have not been paid for

A

Accounts payable

46
Q

Principal on a bank loan that si due within the year

A

Current portion of long term debt

47
Q

Income tax due to the government

A

Income tax payable

48
Q

Unpaid expenses like payroll, utilities, government contributions, interest on bank loan, taxes and permits, etc

A

Accrued expenses

49
Q

Debt that matures in more than one year. Can be secured or unsecured and generally have maturities of more that 5 years

A

Long term debt/ term loans

50
Q

Generally issued to the general public and payable over the course of several years

A

Bonds

51
Q

Debt instruments issues to individual investors. Payment terms may vary from note to note

A

Individual notes payable

52
Q

Are bonds with feature that allows to redeem them for shares of common stock

A

Convertible bonds

53
Q

Leases that extend beyond 12 months period

A

Lease obligations or contracts

54
Q

Capital contributed by the owner

A

Equity or capital

55
Q

Accumulated earnings or surplus, net of dividends paid to shareholders

A

Retained earnings

56
Q

Summarises revenues, expenses and resulting net income for net loss for a given period

A

Income statement

57
Q

The price of goods sold or services rendered

A

Revenue

58
Q

Any cost of doing business resulting from revenue generating activities during a given period

A

Cost and expenses

59
Q

Direct cost incurred in producing a product or delivering service

A

Cost of sales or cost of service

60
Q

Expenses that the business incurs through its normal operations

A

Operating expenses (OPEX)

61
Q

Excess of revenue over cost

A

Net income

62
Q

Summarises the sources and uses of finds for a given period

A

Statement of cash flow

63
Q

Cash inflow clues

A

Proceeds, receipts from customers, collection of

64
Q

Clues for cash outflow

A

Payment, purchase of , building construction or renovation, cash paid , repurchase of, repayment of , dividends paid to shareholders

65
Q

Refers to the efficient and effective management of finds in such a manner as to accomplish the objectives of the organisation

A

Financial management

66
Q

Financial management concept that states that a peso today is worth more that a peso you will receive in the future

A

Time value of money

67
Q

Five components of time value

A

Present value
Fitire value
Rate
Time period
Payments

68
Q

Possibility that the investment will lose money

A

Risk

69
Q

The profit expressed as a percentage of the initial investment

A

Return

70
Q

Is an investment principle that indicates the higher the risk, the higher the potential reward

A

Risk-return tradeoff

71
Q

Is any technique involving use of debt rather that fresh equity in purchase of an asset, with the expectation that the after tax profit to the shareholders from the transactions will exceed the cost of borrowed capital

A

Leverage

72
Q

Refers to the sustained increase in price of goods and services which can ve translated as the decline in purchasing power over time

A

Inflation

73
Q

The potential benefits an individual, investor or business missed out when choosing one alternative over the other

A

Opportunity cost

74
Q

Perfers to profits earned by the company during a period of time which calculated as difference between revenue and expense

A

Profitability

75
Q

The ability of an equity to pay its liabilities in a timely manner, as they fall due under the original payment terms

A

Liquidity

76
Q

Involves significant commitment of funds to generate future returns or benefits

A

Capital investment

77
Q

Refers to the mix of long term sources of fund used by firm. It usually is composed of long term debt, preferred stock and common stockholders equity

A

Capital structure

78
Q

Refers to the best mix of debt, and equity financing to be used for operations and expansion

A

Optimal capital structure

79
Q

Money invested by the shareholders

A

Equity capital

80
Q

2 sources of equity capital

A

Money invested in business
Retained earnings or accumulated profits less dividends paid

81
Q

Referrs to borrowed capital/money

A

Debt capital

82
Q

It is the minimum rate of return or rate of earnings that the firm requires as a condition for undertaking an investment

A

Cost of capital/weighted cost of capital/ interest rate /hurdle rate

83
Q

Calculation of the firms cost of capital in which each category of capital if proportionately weighed

A

Weighted average cost of capital (WACC)

84
Q

The process by which management identifies, evaluates and make decisions on capital investment

A

Capital budgeting

85
Q

It is the value future cash flows (inflow and outflows) over entire life of the investment discounted to the present

A

Net present value (positive NPV should be accepted)

86
Q

Indicates whether an investment will create or destroy the company value

A

Profitability index or profitability investment ratio (>1 is acceptable )

87
Q

Estimates the profitability of potential investments. It is a discount rate that makes NPV of all cash flows from a particular project equal to zero

A

Internal rate of return ( if IRR is < WACC, then accept the project )

88
Q

Gives the number of years to recoup the funds invested in a project

A

Discounted payback period (shortest payback period is considered most profitable)

Master In Hospital Management (3 decks)

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