Lecture #4 (Financial Resource Management) Flashcards Preview

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Flashcards in Lecture #4 (Financial Resource Management) Deck (19)
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1
Q

What makes a company “for profit”?

A

The presence of shareholders in the company (because the company needs to make money in order to pay the shareholders).

2
Q

What is a non-for profit company?

A

One that takes all of its profits and invests back into itself–it does not give money to shareholders.

3
Q

What is the method ATs use to put their program’s mission into financial terms?

A

Budgeting

4
Q

What are the two main types of budgeting models?

A

1) Spending-ceiling model

2) Spending-reduction model

5
Q

What is another name for the spending-ceiling model of budgeting?

A

Incremental model

6
Q

What is a spending-ceiling model of budgeting?

A

A type of budget that requires justification only for those expenses that exceed those of the previous budget cycle …this is often due to inflation

7
Q

What is a spending-reduction model of budgeting?

A

A type of budget used during periods of financial retrenchment that requires reallocation of institutional funds (so it results in reduced spending levels for some if not all programs)

8
Q

What is a zero-based budgeting model? Is it spending-reduction or -ceiling?

A

A method that requires justification for every budget line item without reference to previous spending patterns…spending-reduction

9
Q

What is fixed budgeting? Is it spending-reduction or -ceiling?

A

A method in which expenditures and revenues are projected on a monthly basis…spending-ceiling

10
Q

What is variable budgeting? Is it spending-reduction or -ceiling?

A

A method requiring adjustment of monthly expenditures so that they do not exceed revenues (i.e. patient visits, which are drivers of revenue, can be unpredictable at times)

11
Q

What is lump-sum budgeting? Is it spending-reduction or -ceiling?

A

A method that allocates a fixed amount of money for an entire program with specifying how it will be spent….could be either…i.e. here’s $10,000 for the year, spend as you see fit

12
Q

What is line-item budgeting?

A

A method that allocates a fixed amount of money for each subfunction of a program…(i.e. of this $10,000, $1,000 must be used for CEUs, $1,000 for licensures, $6,000 for supplies, etc)

13
Q

What is the first step of planning a budget?

A

Needs assessment (a systematic set of procedures undertaken to set organizational or programmatic priorities based on identified needs

14
Q

What are the three phases of a needs assessment?

A

1- Exploration
2- Information gathering
3- Decision making

15
Q

What is capital equipment?

A

Non-consumables–things not ordered every year like consumables (i.e. modalities, ice scoop, etc.)

16
Q

What can capital equipment be broken down into?

A

Major and minor equipment (major= depreciation, more pricey, need proposal for approval of purchase, maintenance); (minor=not as pricey, smaller investment)

17
Q

If you’re creative in your purchasing of equipment and items, how much can you save on your budget?

A

40%

18
Q

True or false: If you are for-profit you are tax exempt.

A

False, non-for-profits are tax exempt

19
Q

What are some negotiatiable points in purchasing?

A

Price, supply, quality, shipping, and technical support