Financial Management Flashcards
management of the finances of a business or organization in order to achieve financial objectives
Financial Management
elements of financial management
- Financial planning
- Financial control
- Financial decision making
supply, labor, and overhead money spent on a
product or service
Cost
system of measuring and reporting information about costs
Cost Accounting
expenses that can easily be traced directly to an end
product
Direct cost
not directly related to a billable test but are necessary
for its production
Indirect costs
change proportionately with the volume of tests performed
Variable costs
does not change with the volume of tests performed
Fixed costs
fixed costs that change with increments of volume
Step costs
need to be looked differently from non-salary costs because salary costs have fringe benefits.
Salary costs
fringe benefits
- Social Security
- Health insurance
- Tuition reimbursement
- Pension plans
- Life insurance
expenses incurred to produce a product or service
Operating costs
reagents, electricity, disposable pipettes, salary expense in the production of a test
One-time operating costs
expenses incurred in analytic equipment, computers and physical plant
Capital costs
time, price, purpose
3 criteria for capital costs
means by which a laboratory documents its costs or performing a particular procedure then establishes based on direct and indirect costs
Cost Finding
- the total price of services rendered or products sold
- the money of a business is entitled to receive for the services and products it produces.
Revenue
consists of the total charges at a facility’s full-established rates for provision of inpatient and outpatient care before deductions from revenue are applied.
Gross patient revenue
process of planning, forecasting, controlling, and monitoring the financial resources of an organization
Budgeting
provides a target of day-to-day revenues and expenditures that are to be achieved in the forthcoming year
Operational budget
also known as “predetermined set form”
-uses actual costs, ratios and percent calculations to extrapolate from historical data what the new budget will be
Pro forma budget
-has no baseline
-requires management to annually evaluate all services
and products
Zero-based budget
used to fund large capital projects
Capital budget
difference between the projected budget and actual revenue and expenses
Variance analysis
- statement of an organization’s financial position at a specific point in time
- Generated at the end of an organization’s fiscal year or at the end of the calendar year
Balance sheet
Assets = Liabilities + Equity (net worth)
- known as the statement of profit and loss
- summarizes the organization’s revenues and expenses usually quarterly or annually
Income statement
shows the amount of cash generated by an organizationover a period of time
Statements of cashflow
Cash paid out - Cash received = net change
