Running head: RESPONSE TO CLASSMATES’ INITIAL POSTS 1
Response to Classmates’ Initial Posts
Name
Institution
RESPONSE TO CLASSMATES’ INITIAL POSTS 2
Response to Classmates’ Initial Posts
Response to Classmate #1
It is true, according to your post that, the operations managers must consider the financial
aspects of a hospital. Operations managers should be aware of the structures, financial reports,
and where a hospital's monetary information exists. To avoid bankruptcy, guarantee survival, and
other financial discomfort, hospitals proceed to concentrate on optimizing financial performance.
Operational management controls the overall financial performance of a hospital and
understanding the financial statements allows the hospital to demonstrate the overtime financial
trends. In addition to the operation’s manager understanding of the financial statements, the
hospital faces several monetary constraints (Carraher & Van Auken, 2013). These factors include
the insurance policy and financial procedures, exchange rates, inflation, and the cost of capital.
In addition to capital factors, the insurance policies and procedures influence the flow of capital,
especially where the hospital only serves insured patients (Langabeer & Helton, 2015). Notably,
long procedures delay the revenue collection and as such, complicate the accounting and finance
functions.
I also agree with your accretion that the balance sheet, income records and cash flow
statements are the key financial record which the operations manager should recognize and
analyze. These reports are created to give a comprehensive picture of the operating operations
and financial conditions. It is also important to add that the statement of cash flow accentuates
the data presented in other key financial records. The CFS helps shareholders to consider how a
business works, where its revenue comes from and the sequential expenditure (Carraher & Van
Auken, 2013). The CFS, therefore, offers clarity into whether an organization is on a stable fiscal
basis. Concerning the relationship between the statements, the records convey similar
RESPONSE TO CLASSMATES’ INITIAL POSTS 3
information but for different purposes. The records display the organizations’ financial position,
liquidity, expenses and incomes. Proper analysis of the statements helps the operations manager
in making sound financial decisions. The analysis also helps in wage management and as the
bible says “Do not defraud or rob your neighbor. “ ‘Do not hold back the wages of a hired
worker overnight”, Leviticus 19:13 (The Bible King James Version, 2020).
It is also factual, according to your post that, the time value of money influences a
hospital's long-term financial results as the money obtained now can be saved, and higher returns
can be gained from it. Capital financial planning is a long-term method of investment
preparation. Money earns interest, and the money earned now can be invested in an investment
capable of generating value over the future. However, to expound on the concept, the additional
future value of money significantly affects long-term monetary outcomes. Notwithstanding the
equal worth at the time of payment, obtaining the more instantly gives the hospital more value
and usefulness than obtaining it in the long term due to the current opportunity costs involved
with waiting. These costs of opportunity may typically involve the prospective interest benefit if
today's funds were obtained and held in a savings account for a similar period (Lewin &
Cachanosky, 2015). The hospital is based on revenue collection and if the revenue is collected
soon, the firm may invest the cash in additional money-making ventures.
Response to Classmate #2
It is an agreeable fact, according to your post that, Finance is an important healthcare
component that needs to be managed very carefully because most hospitals are not-for-profit,
this makes them excluded from most state and federal taxes. When it comes to demonstrating
constant development and large profit valuations, this gives them wiggle space. Therefore,
knowledge of the financial statements is needed to improve the level of competitiveness and
RESPONSE TO CLASSMATES’ INITIAL POSTS 4
operational efficiency. Additionally, operation managers need to understand the financial
statements since the details contained in the financial reports are crucial in the decision-making
process. The financial statements also offer the operations manager with adequate evidence for
forecasting and scheduling of various activities since the statements indicate the available
working capital. In terms of the constraints which influence a hospital’s revenues, I agree that the
main forces include the rising costs of healthcare and also the pharmaceutical’s continued efforts
to raise the costs of medication (Langabeer & Helton, 2015). However, to add to your correct
analysis, the hospital also faces challenges affected by insurance policy and financial procedures,
exchange rates, inflation, and the cost of capital. In addition to capital factors, the insurance
policies and procedures influence the flow of capital, especially where the hospital only serves
insured patients. Notably, long procedures delay the revenue collection and as such, complicate
the accounting and finance functions.
Notably, your accretion in the post is right and factual concerning the most important
financial records which include the balance sheet, income statement and cash flow records.
These records have distinct analytical procedures and interpretations. The balance sheet
determines how to financial resources, with either liabilities, such as debt, or investments of
shareholders, such as accumulated income and extra paid-in equity. The income statement
encompasses a period, which is a year for the yearly reports and a quarter for the quarterly
accounts. A summary of earnings, expenditures, net earnings, and operating income is provided
in the financial statement ((Carraher & Van Auken, 2013). The CFS helps shareholders to
consider how a business works, where its revenue comes from and the sequential expenditure.
The CFS, therefore, offers clarity into whether an organization is on a stable fiscal basis. The
above mentioned financial statements, however, are related in that they convey similar
RESPONSE TO CLASSMATES’ INITIAL POSTS 5
information but for different purposes. The records display the organizations’ financial position,
liquidity, expenses and incomes. Proper analysis of the statements helps the operations manager
in making sound financial decisions.
According to the accounting principles and the concept of the time value of revenue
collected, it is also true that the TVM influences the long-haul financial performance of the
health facility. Time value of money (TVM) is the definition due to its potential economic
power; money currently available in the future is worth more than the same amount. The
fundamental finance theory holds that the quicker it is received that cash will gain interest, the
more the amount of the cash is worth. The potential economic value of money greatly impacts
monetary results in the long term (Lewin & Cachanosky, 2015). Notwithstanding the equal value
at the time of payment, getting the more instantly gives the hospital more value and value than
getting it in the long term because of the current cost of opportunity associated with having to
wait.
RESPONSE TO CLASSMATES’ INITIAL POSTS 6
References
Carraher, S., & Van Auken, H. (2013). The use of financial statements for decision making by
small firms. Journal of Small Business & Entrepreneurship, 26(3), 323-336.
Langabeer, J. R., & Helton, J. (2015). Health Care Operations Management (2nd ed.).
Burlington, MA: Jones & Bartlett Publishers.
Lewin, P., & Cachanosky, N. (2015). The Time-Value of Money and the Money-Value of Time:
Duration, Roundaboutness, Productivity, and Time-Preference in Finance and
Economics. SSRN Electronic Journal, 12(4), 122-134. DOI:10.2139/ssrn.2613469
The Bible King James Version. (2020). Retrieved from King James Bible Online:
https://www.kingjamesbibleonline.org/Bible-Verses/
