Betty Ford Center Was Founded

Betty Ford Center was founded by First lady Betty Ford in 1982. The organization by nature is a health care provision service that aims at treating additive diseases of various kinds. The organization is also known for its extensive services in educational sector and research.

My personal interest in this organization is due to the treatment of my family remembers at the Betty Ford Centre. The financial information about this organization would be acquired through the organizations SEC filings and previous tax information via 990 finders.

Financial Issues

Betty Ford Centre's finance department is responsible for the firm's financial management, budgeting, investment planning, generation of finance and allocation of funds. The finance department adheres to consistent valuation methods and all its accounts are prepared in accordance to Generally Accepted Accounting Principles (GAAP). The firm however faces a great deal of inventory risk. This is due to seasonal aspect of the business and there are times when inventory goes out of stock or in excess stock.

Another major problem that is evident from the company's accounts is that Betty Ford Centre does not make adequate provisions for doubtful accounts. A great deal of transactions from third party vendors such as certain pharmaceutical vendors, are made on credit basis and the firm has high receivables. Failure to make adequate provision for doubtful accounts may overstate the current assets (Racine, 2010).

One major problem that financial management faces is high fluctuations due to changes in exchange rates. The company makes transactions in different parts of the world and exchange rates are highly fluctuating. These fluctuations are implicated on intercompany final accounts in different regions and results may differ from what is expected

There are various finance related issues that surround Betty Ford Centre and can affect the firm's future profitability if not addressed promptly. Being a large firm and having growth as its primary objective, Betty Ford Centre requires generation of finance and donors and patients are its primary source of finance. Betty Ford Centre should therefore focus on making treatment prices stable by bringing down the speculations pertaining to Betty Ford Centre stocks. Stability in stock prices can encourage more investors to invest in the firm.

Betty Ford Centre faces problems as far as inventory management is concerned and therefore should revisit its inventory management practices. Betty Ford Centre should prepare separate inventory plans for peak seasons. Arrangements should be made for back up supplies to be made available in time in case demand shoots up. Betty Ford Centre can use a lead time inventory management system for that purpose. Certain drugs which have high and routine demand should be maintained in ample quantitative. At the same time overstocking of certain drugs have also lead to issues pertaining to increased storage costs and wastage in terms of expired medicines (Betty Ford, 2010).

Due to high amount of receivables, Betty Ford Centre must either make adequate provisions for doubtful debts or must consider cutting down on receivables. This business practice does not comply with the prudence concept (Racine, 2010). Failure to make adequate provisions can result in overstating current assets and may also lead to cash flow problems if unexpected bad debts occur.