Financial Management of Not-For-Profit Organizations:
Generally, financial management of not-for-profit organizations is similar to the process of financial management in the profit making sector in several aspects. Nonetheless, there are several major differences that contribute to a different focus of a not-for-profit financial manager. In the commercial sector, the for-profit enterprises mainly focus on capitalizing shareholder value and overall profitability. On the contrary, not-for-profit organizations have the basic aim of providing certain socially desirable need on a continual basis instead of increasing shareholder value ("Financial Management of Not-for-Profit Organizations," 2011). The difference in focus between the for-profit and not-for-profit organizations is because the latter does not have financial flexibility of a commercial enterprise since its dependent on resource providers that are not getting involved in an exchange transaction. As a result, the resources provided are channeled towards offering goods and services to a client instead of the actual resource provider.

Important Exercises….

Financial Management
Fundamental Decisions in Financial Management

In financial management, there are three fundamental decisions, which are central to capital budgeting, capital structure and working capital management. Capital budgeting refers to the process of planning and managing the company's long-term investments. Capital structure refers to the particular mixture of long-term debt and equity a company utilizes to fund its functions. Working capital management refers to the company's short-term assets, which may include inventory, and its short-term liabilities (Parrino, Kidwell and Bates, 2011).

Pros and Cons of the three forms of business ownership

Sole Proprietorship

Advantages

It is easy to start and end a business

There is no sharing of profits

It does not involve any special taxes

Disadvantages

Available funds are limited to what the owner has

There are management issues

There are limited developments

Partnerships

Advantages

The business experiences more financial resources

There is shared management, which enhances growth of the business

Partnerships are likely to succeed when compared to sole proprietorships

Disadvantages

There is unlimited liability

There is….

Financial Scandals and Management
Financial Management

Management Financial Actions, Controls, and Decisions

Financial Scandals and Management

Following the rise of financial scandals in the recent past, external and internal audits are carried out to review the management's financial controls and actions, and keep tab of the outside and internal auditors. However, despite the best efforts, accounting scandals like the Cendant Corporation's $300 million bogus revenue indicate that external auditors and managers are not doing their job. It is the perception of management and financial scholars that social and political forces interfere with the ability of auditors and managers to meet their obligation and uncover management misdeeds (Lublin and MacDonald, 1998). This is because an increase in the toughness of external audit committees only increases the chances of bad accounting and shareholder lawsuits. This forms the problem for this review of literature, as the research proposes that for effective financial and audit control, managers must….

The financial information these directors and managers require is often highly specific to their functional departments' goals and objectives. The director or senior manager of the operations and production departments will require variance analysis of costing, thorough analysis of supply chain costs and the cost of quality management and compliance management (Kivijarvi, Saarinen, 1995). These costs are critical to each of these directors ensuring a consistent level of conformance to their costing plans and contribution analysis of each department to corporate profitability. The origin of this data is from accounting and financial management systems that are used for tracking each transaction, aggregating the data into consolidated reports. Sales directors rely on the same level of aggregated data to ensure they understand how pipelines are progressing, including the development of new sales plans (Stroud, 1988).
At the analyst and employee level of the organization, specific transaction information is essential for helping….

(2009). Google's Big IPO, Five Years Later. [Article]. Wall Street Journal - Eastern Edition, 254(40), C3.
Davis, H.Z., & Peles, Y.C. (1993). Measuring Equilibrating Forces of Financial atios. The Accounting eview, 68(4), 725-747.

Google Inc. (2012). 2011 Annual eport. Mountain View, CA: Google Inc.

Kirby, J. (2009). How Google really does it. (Cover story). [Article]. Canadian Business, 82(18), 54-58.

Lee, M.-j. (2010). Measuring the Usage Effects of Tying a Messenger to Windows: A Treatment Effect Approach. Journal of the oyal Statistical Society. Series A (Statistics in Society), 173(1), 237-253.

Microsoft. (2011). Our Commitment to Our Customers: Microsoft's Business etrieved March 4th, 2012, from http://www.microsoft.com/about/companyinformation/ourbusinesses/en/us/business.aspx

Microsoft Corporation. (2011). 2011 Annual eport. edmond, Washington: Microsoft Corporation.

Swallow, E. (2011). Android Captures Nearly 50% of Global Smartphone Market etrieved March 4th, 2012, from http://mashable.com/2011/08/02/android-market-share/

W3Schools. (2012). Web Statistics and Trends etrieved March 4th, 2012, from http://www.w3schools.com/browsers/browsers_stats.asp

APPENDIX: FINANCIAL ATIOS

2011

ATIO

FOMULA

VAIABLES

GOOGLE INC. (GOOG)

MICOSOFT COP. (MSFT)

LIQUIDITY MEASUEMENT ATIO:

Current atio

Current Assets/Current Liabilities

Current Assets

52,758,000.00

5.919219118

72,513,000.00

2.8578804240

Current Liabilities

8,913,000.00

25,373,000.00

POFITABILITY INDICATO….

Financial Management for Nurses
The modern healthcare industry is extremely labor intensive. To be effective, a modern nurse manager must balance patient care vs. staffing, procedures vs. patient load, and fiscal budgets in line with appropriate levels of care. Nurses are expected not only to understand the organization's fiscal concerns, but to manage them as well. While fiscal dollars spent on human resource management are the larger portion of the health care organization's budget, the use of a cogent and powerful budgetary management tool can help save thousands on an aggregate basis.

The Budgeting Process Cycle

Any budget is essentially a planning process that focuses on expenses and activities of the organization over a given period of time. The budget is designed to help plan for resource allocation and to control expenses when possible, to schedule adjustments or larger capital purchases, and to be used as an operational plan from which to work.….

Financial Management
First student

While nonprofit and for-profit organizations may have much similarity, they also have significant differences. From the tax perspective, for-profit organizations are taxed in various ways determined by the structure of the organization. For instance, small companies are treated as partnerships and sole proprietorships. They are monitored by the National evenue Authority and the owners must be help liable for overall business debts. Their non-profit counterparts have the freedom to register for exception from income tax established by provisions of the tax code (Hyatt & Hopkins, 2012). People contributing towards non-profit organizations are eligible to tax incentives for their donations. Not-for-profit entities are treated as legal corporations for purposes of tax. This leaves the owners of the company not to be liable for debts.

The rationale for selected healthcare organizations to enjoy the tax-exempt status

Possible tax exemptions for selected healthcare organizations include tax exemption on fringe benefits, tax rebate on….

Financial Management
In order to determine the size of equal, annual, end period deposits needed to accumulate a specific future sum at a specific future date, several steps are required. This type of equation involves working backwards from the solution that you wish to find. Thus, if you want to accumulate $2,000,000 in ten years, this is the end result from which the remainder of the equation will be derived.

The payments are annual, equal and end of period. This fits the definition of an annuity, so it is the annuity formula that we will use to derive the required interest rate in order to bring the payments to the end result of $2,000,000 in ten years. In this example, the interest rate is to be taken as a given, and the solution derived should therefore be the sole remaining unknown variable, the size of the payment. To derive this solution, an….

In addition, the exchange provides an avenue for recourse if some remedy is required for a fraudulent transaction.
Problem 15-12.

The operating asset turnover of 5 times on operating assets of $20 million implies a total sales of $100 million. The return on operating assets being 25% indicates net profit of $5 million. The total costs therefore are $95 million.

DOL = Contribution Margin / Operating Margin

In this case, the operating margin is 5%, so the contribution margin would be 20%. This indicates that COGS is 80% of revenues or $80 million. That leaves $15 million as fixed costs. With a COGS of $8 per unit ($80 million / 10 million) and contribution per unit of $2 the break-even volume would be:

$15 million / $2 = 7.5 million units.

Problem 15-13.

a) the breakeven point in units for the company is as follows:

$180 - $126 = Contribution = $54 per unit. Breakeven = $540,000….

Financial Management
Firm Organization

False. The form of business organization direct affects the taxation structure of the firm, particularly with regard to flow-through taxation on some forms (sole proprietorship, most partnerships) and not on others (most corporations).

Firm Organization

False. The partners in a regular partnership have a high degree of liability.

Partnership

True. Most partnerships remains fairly small due to these constraints.

Proprietorship

True. In a sole proprietorship, the owner holds all the capital, making it difficult to raise from outside sources, and the proprietor has all the liability associated with the business.

Limited Liability

False. The owners do see their risk reduced by limited liability, but the firm still has this risk. Therefore, the firm's value should not be reduced. The firm can still be bankrupted, leaving potential owners with nothing.

Value Maximization

a. True. Earnings per share has a strong correlation with the firm's stock price. A firm that has the objective of maximizing shareholder wealth will also be….

Financial Management
"Suddenly, Gold Isn't Looking So Solid"

This article (Sommer, 2011) examines the advisability of including gold in a typical investment portfolio. The article analyzes arguments, both historical and current, in favor of and against investing in gold. The article concludes with a very qualified recommendation, advising investor caution.

Sommer's article debates the question of whether gold, given its high volatility, should be included in a typical investment portfolio. He presents arguments that there is no simple answer.

The popularity of gold is well established, with gold having served as the standard of the global monetary system until the 1970s. Even today, gold maintains a certain appeal during an era of wildly fluctuating financial values. Many consider gold a mainstream investment, as evidenced by the fact that a gold exchange-traded fund, SPD Gold Shares, was the second-most popular ETF in the U.S. On April 30 (Sommer, 2011).

Yet, for all its popularity, gold behaves….

Financial Management
Calculate or identify from each company's most recent annual report the six (6) specific financial ratios listed and provide as an appendix to the paper.

Liquidity ratios are responsible for measuring a firm's performance regarding the availability of cash to pay its debt obligations (ashid & Abbas, 2011, p. 9). A common type of liquid ratio is the current ratio. The current ratio is responsible for comparing and contrasting current assets to current liabilities. This information is useful to executives in that they become aware whether or not the firm will be able to pay its current debt as it matures (Kurtz, 2011, p. 540). Dividing current assets to current liabilities gives the liquidity ratio. As a result, Google's liquidity ratio can be calculated by dividing 41,562 into 9,996. The liquidity ratio equals to 4.15. Microsoft's liquidity ratio can be calculated by dividing 49,280 into 27.034. The liquidity ratio equals….

Financial Management Decision
Understanding Basic Finance Terms

Generally, it is beneficial to have a basic understanding of financial concepts and terminology before going into business independently. Financial management refers to the process of calculating anticipated sources of profit and comparing them to anticipated expenses and other variables and contingencies. In principle, financial management is used to determine what prospective ventures are likely to be profitable and to identify those that are too risky to launch without risking the initial investment.

Risk financing refers to the process of identifying and evaluating potential sources of negative consequences known as risks and of calculating the financial resources that would be necessary to mitigate those risks. Generally, that process would include a risk matrix in which the magnitude of every reasonable identifiable potential risk is considered in conjunction with and in relation to its respective likelihood of occurrence. That risk matrix provides data that will assist in….

Financial Management
Calaveras Vineyards sits on 220 acres in Alameda Valley, California. Anne Clemens, a senior vice president at Goldengate Capital, received a loan proposal from Tom Howell, a managing director with NationsBank's investment-banking group. The brochure described the prospective management acquisition of Calaveras Vineyards and solicited Goldengate's participation in the $4.5 million senior financing facility. The facility would consist of a $2 million term loan and a revolving credit of up to $2.5 million. Clemens needed to decide quickly whether the proposed terms were attractive, where to position Goldengate in this credit, and whether to offer a counterproposal on terms.

The Vineyard is the beneficiary of a trend of strengthening brand recognition. The organization used to sale solely through wholesale distribution channels, but being marketed as a premium brand has significant impacts upon potential profitability. However, in its current state, the Vineyard is low on capital and some judgement calls about….

Financial Management
Definition of revenue cycle in healthcare

A revenue cycle is a process whereby financial progression of the accounts of a business is described.it begins where the business has made acquisition of products until they get paid. Healthcare firms are business oriented organizations. Their survival financially depends on a recurring and consistent flow of money from the services that are provided to patients. Without the existence of adequate stream of revenue then healthcare organizations would be forced to stop their operations. The revenue cycle begins immediately a patient registers to a healthcare institution for care. A revenue cycle that is well managed protects revenue collected and increases the flow of cash. If it is supported by an information infrastructure that is strong it will lead to the standardization of procedures and help in sharing of information across the units of operation ( Hall, s2010).

Complexity of the revenue cycle in health care

There….