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PT Admin > Lecture 10: Fiscal Management > Flashcards

Lecture 10: Fiscal Management Flashcards

1
Q

In the “good ole days,” ____ ____ prepared budget anually.
Based budget on ____ ____ plus an ____ factor.
Monitored budget throughout the ______.

A

PT Manager
Previous year, inflationary
Year

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2
Q

21st century fiscal management:
Budget _____
Budget _____
Meeting fiscal goals of ___ ___
Assuring ____ for services
Estimating ____ of levels of patient population being served
Appealing ____decisions to third party reimburses

A 
Planning
Projection
Market management
Payment
Reimbursement
Reimbursement
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3
Q

What is a fiscal year?

A

Time frame for when business year starts (Ex: July 1-June 30)

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4
Q

The Budget:

Mechanism to assess the ____ and the ____ of the organization or department

A

Success, progress

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5
Q

The Budget:
Budget projections are derived from-
Known facts from ____ ____.
Estimates are made about ____ costs and then ____.
Assumptions that the _____ makes about the year to come.

A

Previous year
labor, progress
Manager

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6
Q

The Budget:
Budgets help the manager control the ______ of a ______.
Budgets express anticipated _____ and _____.

A

Implementation, program

Revenue, expenditures

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7
Q

What does PPBS stand for?

A

Planning-Programming-Budgeting Systems

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8
Q

Planning-Programming-Budgeting Systems (PPBS):
Plan for a new program is developed from the _____ and _____.
Budget builds upon the _____.
Looks at all of the programs in the organization to make sure there is no _____. Evaluate costs and revenues against _____.

A

Mission, objectives
Plan
Duplications
Projections

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9
Q

What is Zero-Base Budgeting?

A

Takes a fresh look at each program at the beginning of the budget period. Cost of running the program is then computed for a zero are as if the program never existed.

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10
Q

Is zero-base budgeting usually used in PT?

A

No

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11
Q

What is the traditional type of PT budget?

A

Break-Even Budgeting

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12
Q

Break-even budgeting:
______ budgeting.
Goal is to ____ ____ at the end of the year.
Based on certain ____ and ____ from previous year.

A

Incremental
Break even
Increases, decreases

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13
Q

What type of budgeting relies on the manager’s decisions regarding staffing levels?

A

Productivity based budgeting

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14
Q

Using Financial Information:

____ ____ determines the expense related to the production of a product or a service.

A

Cost analysis

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15
Q

Using Financial Information:

Cost information is used to manage ____ and ___ ___.

A

Expenses

Set prices

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16
Q

Look at the bottom line: If brackets or red, it’s ____ ____. If black or not bracketed, it’s ____.

A

Not good

Ok

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17
Q

Use of the Organization’s Financial Information:
_____ agencies
Potential _____
Stockholders
______ analysts
______ (need to make sure you have a realistic plan)

A

Government
Investors
Industry
Creditors

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18
Q

Financial Management:

Encompass more than just ______.

A

Accounting

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19
Q

____ ____ is the “art of both obtaining the funds that the enterprise needs in the most economic manner and of making optimal use of those funds once obtained.”

A

Financial management

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20
Q 
The Financial Professional:
Study in \_\_\_\_ \_\_\_\_, \_\_\_\_ or \_\_\_\_.
Advanced certification \_\_\_\_\_.
Adhere to Guidelines established by the Accounting Principles Board and Financial Accounting Standards Board.
Hospitals: \_\_\_\_ \_\_\_\_ or \_\_\_\_\_.
Private Practice: \_\_\_\_ \_\_\_\_.
A

Business administration, accounting, economics
CPA
Private Accountant, CFO
Public accountant

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21
Q

Finance Terminology:
Need to become familiar with terminology to protect the ___ generated by your practice or department by understanding where your department stands.

A

Income

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22
Q

Financial Statements:
Reports that describe the ____ ____ and ____ ____ results of an organization.
Specified ___ ___.

A

Financial position, operating results

Time period

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23
Q

Financial Statements:
Written reports ___ or ___.
Fiscal year (DOES/DOES NOT) have to follow calendar year.

A

Quarterly, annually

Does not

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24
Q

Major Financial Statements:

What summarizes the financial position of an organization as of a particular date?

A

Balance sheet

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25
Q

Major Financial Statements:

What demonstrates an organization’s profit or loss from operations for a specific time period?

A

Income statement

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26
Q

Is the income statement the same at all times of the year for PTs?

A

NO.

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27
Q

Major Financial Statements:
What demonstrates what has happened to make available cash increase and decrease during a period of time?? If there is very little __ __ at a particular time of year, may not be able to manage staff/pay off bills.

A

Cash flow statement

Cash flow

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28
Q

The Balance Sheet:

__ __ of the organization’s ___ position as of a certain date.

A

Financial statement, financial

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29
Q

The Balance Sheet:

What is the assets equation?

A

Assets = liabilities + owner’s equity

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30
Q

Assets:
____ resources owned by an organization.
Generally assets include: (6)

A

Economic

  1. Cash
  2. Investments
  3. Buildings
  4. Fixtures
  5. Furniture
  6. Equipment
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31
Q

What are liquid assets?

A

Assets that can be quickly converted to cash

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32
Q

What are fixed assets?

A

Those assets which cannot be quickly converted to cash

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33
Q

What is debt considered?

A

A liability

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34
Q

Liabilities:

That which is owed by the organization is ___ ___.

A

Accounts payable

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35
Q

Liabilities:

___ ___: that which must be paid in the short term, usually within 1 year.

A

Current liabilities

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36
Q

Liabilities:

? = that which is paid over the long term

A

Long term liabilities

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37
Q

Liabilities:

Electric, water bills are what type of liabilities?

A

Current liability

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38
Q

Liabilities:

Mortgage is this type of liability…

A

Long term liability

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39
Q

Owner’s Equity:
Portion of the assets that is owned by the _____.
Can increase through _____ of _____ by the owner.
Earnings from ____ _____.

A

owners
Investment, resources
Profitable operations

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40
Q

Using the Balance Sheet:
Valuable when used to do ___ ___.
Common size statement- entries are in _____. Do ___ ___.

A

Comparative analysis

Percentages, vertical analysis

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41
Q

Using the Balance Sheet:

Comparative balance sheet- compare the organization’s ____ ____ at different points in time.

A

Financial position

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42
Q

The Income Statement:
Evaluates the performance of the organization comparing money ___ (____) to money ___ (____) for a specified period of time.
Demonstrates net ____or net ____ for the period.

A

Spent (expenses), earned (revenue)

Income, loss

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43
Q

The Income Statement:

Revenue + ______ = Net income (____)

A

Expenses, loss

44
Q

Revenue:

_____ _____ for services sold during specific period of time.

A

Income received

45
Q

Revenue:
_____ revenue: revenue from sale of services
_____ revenue: revenue from other services

A

Operating

Non-operating

46
Q

Revenue:
____ ___ of Accounting (most common)
Revenue is recorded from the period that the revenue is made.

A

Accrual Basis

47
Q

Revenue:

__ __ of accounting: revenue should be recorded when money is received

A

Cash basis

48
Q

Income from the Assumption of Risk:
Relatively ____ source of income.
Occurs in _____ payment agreement.
Payment is _____, volume is ____.

A

New
Capitated
Guaranteed, not

49
Q

Expenses:
Money spent to produce the goods/services
What is capital intensive?

A

Money spent on equipment

50
Q

Expenses:

What is labor intensive expenses?

A

Money spent on salary and benefits

51
Q

Using the Financial Statement:

Income Statements can be set up for the ___, the ___, and the ___.

A

Past, present, future

52
Q

Financial Statement for the past:

Examine past history what was ___ and what ___.

A

projected, occurred

53
Q

Financial statement for the present:

Look at ___ ___ areas

A

Under performing

54
Q

Financial statement for the future:

___ ___ statement: very helpful as part of business plan

A

Pro for a

55
Q

Statement of Operation:
A ______ income statement.
Compares the _____ income statement with the _____ income statement for a period of operation.

A

Comparative

Projected, actual

56
Q

Statement of Operation:
Look at ___ and ___ variance.
What does it cost to produce a ____?

A

Positive, negative

Service

57
Q

___ analysis:

Financial statements that allow you to make comparisons between one piece of financial information and another

A

Ratio

58
Q 
Ratio Analysis:
\_\_\_ ratio
\_\_\_ ratio
\_\_\_ ratio
\_\_\_ turnover ratio
\_\_\_ productivity ratio
\_\_\_ on
Assets
A 
Current
Quick
Debt
Receivable
Revenue
Return
59
Q

_____ ratio compares current assets with current liabilities.

A

Current

60
Q

Current Ratio:
The ___ the ratio, the better the organization’s ability to pay its current bills
Important to creditors and ____.

A

Higher

Investors

61
Q

____ ratio compares liquid assets with current liabilities.

Similar to current ratio, except it only includes that which can be ___ converted to ___.

A

Quick

Quickly, cash

62
Q

____ ratio: Compares total liabilities to total assets

A

Debt

63
Q

Debt Ratio: gives percentage of assess that are financed by _____. Determines if the organization is a good ____ ____. The ___ the percentage, the less money borrowed by creditors to purchase ____.

A

Borrowing
Credit risk
Lower, assets

64
Q

____ ____ ratio: average number of days it takes to convert accounts receivable to cash.

A

Receivable turnover

65
Q

Receivable Turnover Ratio:

The older the debt is, the ____ likely it is to be collected.

A

Less

66
Q

_____ _____ Ratio: Amount of revenue generated for each dollar of salary expense

A

Revenue Productivity

67
Q

Revenue Productivity Ratio:

Calculated by dividing the total ____ from services by ___ ___ ___

A

Revenue, related salary expenses

68
Q

Revenue Productivity Ratio:

In a labor intensive industry such as PT, this can be an indicator of ___ ___

A

Salary expense

69
Q

___ ___ ___: used to evaluate an organization’s ability to earn a return on funds supplied from all sources.

A

Return on assets

70
Q

Return on assets:

Divide __ __ + interest expenses / total _____

A

Net income

Assets

71
Q

Return on Assets:
Higher the return, the ___ ___ ___
Will justify purchase of _____

A

Better the performance

Equipment

72
Q

_____ _____ _____: demonstrates how an organization’s cash balances change over a specific period of time

A

Cash flow statement

73
Q

Cash flow statement:
Identifies both the ___ and ___ of cash.
Important impacts on ability to ___ ___ and buy new ____.
Impacts the ability to ____.
Cash flow projections allow management to delay planned _____ or arrange for ____ if needed.

A

Sources, uses
Pay bills, equipment
Grow
Expenditures, credit

74
Q

_____ _____ is the most important use of financial information for an organization

A

Financial planning

75
Q

The Operating Budget:
Guides the operation by outlining types and levels of ______.
Generally covers a _____ period.
Subdivided into ____ and ____ increments.

A

Expenditures
1 year
Monthly, quarterly

76
Q

Chart of accounts:
Collect information about how money is ____ and ____.
Keep track of value of _____, ____, and owner’s _____.
Need to establish categories of ____, ____, ____, and ____ are called accounts.
Each line has an ______ _____.

A

Spent, earned
Assets, liabilities, equity
Expense, revenue, assets, liabilities
Identifying number

77
Q

_____ _____: good revenue management maximizes the income from operations
Measuring services and products for sale, setting prices, setting billing, credit, collection policies, billing the customer, managing receipt of payment, cash management, calculation of deductions and allowances, payment posting, account reconciliation, financial reporting

A

Accounts Receivable

78
Q

____ ____: listing of services and products provided by the practice

A

Fee schedule

79
Q

____ ____: gross revenue from operations is equal to the ____ x price of what is sold

A

Operating revenue

Sales

80
Q

Operating revenue: net revenue is a function of ____, sales ____, payer mix and ___ mix

A

Price, volume, case

81
Q

Operating revenue: price charged is ____ the price paid in health care

A

Rarely

82
Q 
Revenue is based on the following reimbursement types:
\_\_\_\_\_ based
Fee for \_\_\_\_\_
Case \_\_\_\_
Per \_\_\_\_ rate
\_\_\_\_ payment
A 
Cost
Service
Rate
Dime
Capitated
83
Q

_______ revenue: 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 or service
____ income
philanthropic gifts

A

Non-operating

Investment

84
Q

____ ____: recording and payment of money owed by the business to its creditors

A

Accounts payable

85
Q 
Accounts payable:
\_\_\_\_\_ management policies and procedures
\_\_\_\_\_ policies and procedures
Policies on \_\_\_\_\_ authorization
\_\_\_\_\_ audit
A

Inventory
Purchasing
Expense
Internal

86
Q

Expense management: types of expenses
_____: cost of resources needed to produce the product or service
_____: purchase of equipment and facilities that will contribute to the production of goods and services.

A

Operating

Capital

87
Q

Types of expenses:
LABOR: Salary per _____
_____: office, medical, minor equipment
Purchased and professional services: clinical, accounting, legal
_____ expenses: incurred but not paid (sick time, vacation time)
_____ expenses*: have an extended useful life

A

FTE
Supplies
Accrued
Capital

88
Q

____ expenses: includes all costs related to employment

Includes advertising and ____ fees

A

Labor

Relocation

89
Q

Labor expenses:

_____ expense = labor hours paid x rate of pay

A

Salary

90
Q

Labor expenses:

_____ _____ ____ = FTE = 40hrs per week x 52 weeks = 2080 per year

A

Full time equivalents

91
Q

Capital expenses: each business sets a minimum for capital expense = $____

A

500

92
Q

Capital expenses reflect the _____ costs

Equipment, land and buildings

A

Associated

93
Q

Capital expenses: depreciation of _____ _____

Annual depreciation = capital expense/_____ ____

A

Capital assets

Useful life

94
Q

Expense Control: ___ and ___ expenses

A

Direct, indirect

95
Q

Expense control: Institutions have direct and indirect costs, but private practices only have _____ costs

A

DIRECT

96
Q

Direct costs are directly associated with _____

A

Production

97
Q

Salary, benefits, supplies, depreciation of equipment

Are these direct or indirect costs?

A

Direct

98
Q

Indirect costs are incurred but to directly related to ___ ___

A

Service delivery

99
Q

Administrative salaries, financial services, grounds and buildings, cafeteria
Are these direct or indirect costs?

A

Indirect

100
Q

Expense Classification:
____ ____ is unchanged regardless of volume.
Insurance payment ____ ____ ____

A

Fixed costs

For the year

101
Q

Expense Classification:
_____ _____: increase and decrease relative to volume
Salaries, linen, medical supplies

A

Variable costs

102
Q

Expense Classification:
_______ cost: fixed and variable elements
Phone service: basic cost fixed, per use is variable

A

Expense Classification:

_____ cost: sum of fixed, variable, and semi-variable costs

103
Q

Expense Classification: What are the 4 classifications?

A

Fixed
Variable
Semi-variable
Total

104
Q 
Managing Financial Performance:
Working knowledge of the mathematical relationship between-
Fixed, variable, and semi-variable costs
Cost per \_\_\_ \_\_\_ \_\_\_
Sales \_\_\_\_
Profit (\_\_\_\_)
A

Unit of service
Volume
Loss

105
Q

Know your ____ ____ point

A

Break even

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