Module 05 Project - Proposal and Final Submission

Healthcare facilities require looking for other means of securing their finances beyond their banks. According to Argan (2013), other financial institutions, aside from banks, offer lower interest rates, are more flexible, which are luring factors to consider. In his article, the author states that securing financing beyond banks gives companies a better chance of expansion as opposed to looking for finances in banks.

Article Review 2

In the article, the authors make a good argument for the need for broadening the methods which healthcare providers use to calculate break-even analysis. Through the different options, the authors show different sectors where hospitals lose money they should be gaining (Laskaris & Reagan 2013). They portray the investment costs being higher than the costs hospitals charge for the actual services.

The authors discuss non-financial factors that cause indirect financial expenses like labor, technology lifespan, consumables, and service (Laskaris & Reagan 2013). Organizations need the evaluate the different non-financial factors that influence the break-even points in their firms. In doing so, they can see the different areas that lead to losses and improve on them. It is only right to ensure that charges on services make sense when compared to the cost of purchasing equipment. According to the authors, affordable care affects the break-even analysis because patients pay less for services that cost more. While checking their financial statements, hospitals end up making losses as opposed to profits (Laskaris & Reagan 2013).

Summary of Viewpoints

According to both authors from the two articles, implementing some new additions to capital management makes the break-even process make more sense. Technological changes that bring opportunity, management's input, cash flow budgets, and other non-economic factors influence capital investments and decision making. As such, organizations need to focus on methods of analyzing capital investments like payback period on finances, the projections on profits, and the expenditure projections.

Ethical Scandal

The Enron scandal is one that resulted in the bankruptcy of the largest companies in the United States called Enron Corporation. The corporation failed due to unethical behavior from its leaders. The Enron scandal encompassed a series of activities that resulted in financial paralysis of the goods, services, and energy of Enron company. The aftermath of the crisis led to the collapse of one of the largest accounting and auditing companies Arthur Andersen LLP. Even more, the scandal raised questions and awareness of accounting practices and standards. The company faced challenges in early 2000, where financial analysts were keen on the financial statements of the company. The company was investigated, and the Securities and Exchange Commission investigated the organization's dealings with Fastow SPE's. There arose issues of accounting malpractice that affected the stock price of the company. The company later filed bankruptcy protection as they suffered loss from their share price, and many of their executives were arrested and sentenced to prison (Boddy, 2017). Thus, the company collapsed due to accounting fraud and crude financial statements that adversely affected its stock price.

Professionalism and ethics influence how an individual makes certain decisions. In times of crisis, the ethics instilled in an individual influence how accurate their choices are, and if the decisions made are correct. Once unethical behaviors come into play, then the wrong options are prepared to cover up existing matters, and this leads to faulty decision making on capital investments (Melé et al., 2017). The concepts of embezzlements and losses come about when the individuals in an organization who handle finances misappropriate goods and services. As such, this leads to losses. An organization needs to ensure they maintain codes of ethics. They can do this by frequent audits and rotation of positions to ensure that one person does not have unlimited power over the finances for long periods.

Conclusion

Ethics is an essential factor in an organization. Especially when it comes to the financial aspect, it is always vital to ensure that the individual trusted to handle such a department is ethical in his undertakings. Capital is the only thing that drives an organization. For the organization to stand and prosper, it is crucial to make a proper judgment in terms of capital investments. Ensuring book records are accurate and honest ensures that the decision-makers have the right advice before making decisions.

References