The greatest financial challenges to a health care provider are its revenue cycle and receivable management. The revenue cycle is the process that includes all the administrative as well as the clinical functions that are essential and important for capturing, managing, and collecting the patient service revenue whereas the receivable management deals with the planning, organizing, directing, and controlling the receivables.
Therefore when all these are taken into account with proper measures they can serve well in making the health care provider sustainable in financial decision. Well if we look at the health care organization we can concatenate many of these who are actually available for the discussion of their alternative to the short term financing. A reputed health care organization is DR. Reddy. This organization actually gains its benefits for a short span in a year. So, the short term financing money is also available for a certain period in year.
The effect of which is seen on its medicine production and once it alters its other medical facilities. But, contrastingly in the period where it receives short term financing the facts are world classes as the easy facilitation of many is possible. So, it’s like when an organization is under the short term financing they can prospect themselves because they have enough option to facilitate their growth. Sort term financing is a boon of ever health care organization, but during certain periods it also brings negative impact to an organization.
Therefore to conclude we would like to say that the pros and the cons are always active for a health care organization to avail the alternative of short term financing. Reference: – * http://www. scribd. com/doc/31411735/HCA270-HCA-270-CheckPoint-Short-Term-Financing DQ 2. Firstly, a financial ration is defined as a ratio that is important for indicating the performance on the financial situation of an organization or a firm. There are most ratios which could be calculated by the information provided by the financial statement of the organization.
The only importance of the financial ratio is that they serve as a key to analyze trends and hence compare the firm’s finances t those of the other firms. In general there are 10 ratios that govern the finances of an organization. But, we have been given only three ratios though all the ratios are essential because they acquire nearly 90 percent of the information contained in the financial statements. These can be any but we have to choose the best three that certainly makes the difference.
The major three ratios would be the operating margin, it is an essential ratio that deals with the organization’s profitability from the operations, and it also includes other decisions related to the investment t and interest and depreciation expense. The other ratio that is required by a health care organization is the day’s cash on hand, his ratio is incubated in the liquidity measure, it is the measure of an organization to hold and support its operating expense without collecting any additional cash for them.
The last in the list is the capital spending, it is the measure of an organization which measures the capital expenditure as a percentage of annual depreciation expense. The limitation of financial ration and operating indicator analysis are as follows, it is an retrospective approach because there is no prospective examination, the ration data is not based on the economic data rather than the accounting, it doesn’t capture significant off balance sheet its and the financial statement accounts reflects historical cost and not the current economic cost.