Economics and financial Management For Nurses And Nurse Leaders Assignment Paper

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Economics and financial Management For Nurses And Nurse Leaders Assignment Paper

FE005 Part 2:

Using the attached Fe005_statement_horizontal_analysis-ratios (Healthcare Budget Request), create a brief (2-page) description of your analyses. Be sure to address the following in your summary:

  • Describe the results of each statement analysis. What do the results of each analysis mean?
  • What does your complete financial statement analysis suggest about the financial health of the organization?
  • Using your current organization’s data, does your analysis help describe any observed organizational behaviors or actions? Explain.
  • What assumptions have you made in your analyses?
  • From an entrepreneurial perspective, what implications do these analyses have for your proposed healthcare product or service? Economics and financial Management For Nurses And Nurse Leaders Assignment Paper

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Must use 2 of the 4 references in this paper:

  • Penner, S. J. (2016). Economics and financial management for nurses and nurse leaders(3rd ed.). Springer Publishing. Chapter 12, “Assessing Financial Health” (pp. 365–396)
  • (2018, August 4). Financial statement analysis. https://www.investopedia.com/terms/f/financial-statement-analysis.asp
  • Start, R., Matlock, A. N., Brown, D., Aronow, H., & Soban, L. (2018). Realizing momentum and synergy: Benchmarking meaningful ambulatory care nurse-sensitive indicators. Nursing Economic$, 36(5), 246–251. https://www.thefreelibrary.com/Realizing+Momentum+and+Synergy%3A+Benchmarking+Meaningful+Ambulatory…-a0559355997
  • Corporate Finance Institute. (2018, June 13).Analysis of financial statements [Video]. YouTube. https://www.youtube.com/watch?v=O1SFesOJsxE&t=54s

As is the case with any organization, healthcare organizations establish strategic goals in support of their vision and mission. In turn, initiatives are pursued in hopes of achieving goals.

In a perfect world, every initiative that the organization values would be pursued. But healthcare organizations have limited resources. Hence, decisions must be made about which initiatives to pursue. Such decisions are typically based on several factors, including: Economics and financial Management For Nurses And Nurse Leaders Assignment Paper

  • The perceived value of the initiative
  • How strongly the initiatives support organizational missions and goals
  • Potential for return on investment
  • Resources required

Nurse leaders and others who drive the pursuit of these initiatives need to be sensitive to these factors. Value, support of objectives, and return on investment are usually communicated by developing a business case for the initiative. The need for resources is typically communicated by developing a formal budget request.

A budget request is a formal document that most organizations require from those seeking resources (funding) for various projects and initiatives. When successful, a budget request results in the initiative being included as part of the organization’s budget; a planning tool that allocates resources (such as money or personnel) to the activities and capital needed to support the pursuit of strategies for a given time period (typically a year).

Throughout this Area of Expertise, you will work on the development of a budget request for a healthcare product or service you propose to the leadership of your organization. As you do so, you will consider your audience for that request, financial and other resources you will need to launch the initiative, and other factors. You will utilize spreadsheets to help you analyze the financial impact, and you will develop a business case to advocate for your proposal to the leadership of your organization. Economics and financial Management For Nurses And Nurse Leaders Assignment Paper

 

 

Spreadsheet Orientation (optional)

 

A spreadsheet is a category of software designed to help analyze numeric information. Microsoft Excel is the most common spreadsheet tool used in business.

Spreadsheets like Excel are especially useful when performing financial calculations and analyses, such as those you will conduct in subsequent assessments in this Area of Expertise to analyze the financial impact of the initiative you propose. Spreadsheets enable the quick manipulation and calculation of large amounts of numeric data. When developed properly, they also help conduct “what-if” analyses, allowing users to change certain values to determine the impacts on results (such as profits).

The following material will guide you through completion of the Assignment Spreadsheet Fundamentals. To complete this optional assessment, you will need:

  • This section of the Healthcare Budget Request Workbook: Step-by-Step Guide
  • The Excel file “Clinic.xlsx”, located in the Learning Resources

 

Practice Exercise (Optional): Spreadsheet Fundamental

The following exercise will help orient you to the basic functionality of Microsoft Excel in preparation for FE001 Assessment Part 1. To complete this optional exercise, you will need:

  • This section of the Healthcare Budget Request Workbook: Step-by-Step Guide
  • The Excel file “Clinic.xlsx”, located in the Learning Resources

 

  • Download and open the file “Clinic.xlsx” located in the Learning Resources.

Note: An open Excel file is also referred to as a workbook.

 

  • Spreadsheets organize screens of data by using columns and rows. Columns are labeled with letters and rows with numbers. The intersection of a row and column is referred to as a cell. Cell locations, or addresses, are identified based on the letter of the column and the number of the row. For example, the first cell in the spreadsheet is referred to as “A1”. Cell addresses are always shown in the Address box near the top of the screen.

 

  • Notice the tabs at the bottom of the screen that read “HealthWaysBudget” and “HealthwaysFinancials”. When clicked, these tabs open separate worksheets (individual pages used to organize different categories of data within a workbook).
  • In Excel, you can create many different worksheets within a single workbook. For example, in this workbook the HealthWaysBudget worksheet presents a budget report for the organization, while the HealthwaysFinancials worksheet presents several financial statements for the organization. Economics and financial Management For Nurses And Nurse Leaders Assignment Paper

Note: Financial statements will be discussed in more detail later in later Competencies.

 

  • Create a new tab in this workbook. To do so:
    1. Click on the New sheet (“+” symbol) at the bottom of the screen.

 

  1. To name the worksheet, double-click the tab and type “Practice”.

Note: You can also rename the new tab by right-clicking the tab and selecting “Rename”.

 

  • Note that there are various types of data used in Excel:
  • Text is data that utilize letters. Numbers can also be used in text data. However, these numbers must be used in conjunction with letters or must manually be set to text.
  • Numericaldata utilize numbers exclusively. Unlike text data, which can use numbers, numerical data cannot contain letters.
  • Currency/Accountingdata utilize numbers in conjunction with a currency marker.
  • Datesare pieces of data that denote a date and/or time. There are multiple formats for dates within Excel.
  • Percentage data are a subset of numerical data that is converted into a percentage. Percentage data can be converted back into numeric, and vice versa. Converting to numeric from percentage will display the number as a decimal. For example, 89% would be converted to 0.89.
  • Enter the following text and numeric values on the Practice worksheet in the cell locations shown below: Economics and financial Management For Nurses And Nurse Leaders Assignment Paper

 

  • Note that the text in columns H and I may be cut off as you type in adjacent columns. This is because the column is not currently wide enough to display the text without overlapping into the next column. To adjust column widths:
    1. Place your mouse pointer between the two columns in the header area between any two columns that you wish to adjust; the column to be increased should be on the left. Double-click the mouse and the column will automatically adjust to the required size to display the results.

 

  1. Using the same approach as above, you can drag your mouse (instead of double-clicking) to manually adjust the column to your preferred width. Note that the precise size is displayed as you drag your mouse.
  2. You can also select the entire column by clicking on the column header. This highlights the entire column. From here, you can then right-click anywhere in the column and choose “Column Width”, then replace the current value with a desired value.

Note: If a column is too narrow to display numeric values, a series of repeating “#” symbols will appear.

  • Save your work by clicking on the SAVE icon in the title bar (or by choosing ‘File’ and ‘Save’).

Note: Be sure to save your work frequently. Economics and financial Management For Nurses And Nurse Leaders Assignment Paper

 

  • Excel allows for most primary formatting of text and numeric data, such as typeface (bold, underline, etc.), font size and color, cell color, etc. Most of these options are available in the menu ribbon on the top of the screen (much like MS Word). If you like, make various formatting changes, such as boldface for column headings.
  • One of the most important features of Excel is the ability to use formulas and functions. An Excel formula is a statement you enter in a cell to calculate a value or perform some similar action. Formulas contain a combination of operators and operands. In effect, you write a formula to “teach” Excel how to calculate a value.
  • Functions are similar to formulas, but they are prewritten formulas that are “built into” Excel via the function bar. You only need to populate certain elements of a function, such as the range of cells (typically a contiguous group of cells) needed to calculate the value.
  • Use the SUM function to calculate totals. To do this:
    1. Navigate to cell C10.
    2. Click on the AutoSum button from the task bar.
    3. Drag your mouse pointer over the range of values to be summed (in this case, C4 through C8)
    4. Hit the ENTER key. The result in cell C10 should be 1221, meaning 1,221 units were sold across all product lines in January.

Note: Excel contains the AutoSum key as a shortcut because the SUM function is used so frequently. You can also manually type the sum function as =SUM(C4:C8), yielding the same results. Economics and financial Management For Nurses And Nurse Leaders Assignment Paper

  1. Calculate totals for February and March (cells D10 and E10). If you are successful, your results should be 1970 (for cell D10) and 894 (for cell E10).
  2. Calculate total units sold of Product A for the quarter (cell F4). If you are successful, your result should be 2036.

Note: If you click on cell F4 after you have entered your function, you will see the result. If you examine the formula bar near the top of the screen, you will see the actual contents of the cell, which is your function (=SUM(B4:E4) ).

  1. A powerful feature of Excel is the ability to copy formulas and functions. This enables you to create a formula or function once but use it many times without retyping. In this way, you can copy your function from cell F4 and paste it in cells F5 through F8. To do this:
    1. Click on cell F4.
    2. Hover the mouse pointer on F4 until you see a small square in the bottom right corner of the cell. This is referred to as the “fill handle”.
  • Click and drag the fill handle (your mouse pointer will change to a crosshair “+” symbol) until you have highlighted cells F5 through F8.
  1. Release the mouse button. The function will now be pasted in the highlighted cells.

Note: If you click on any cell in your pasted range, you will see the function displayed in the formula bar near the top of the screen. Economics and financial Management For Nurses And Nurse Leaders Assignment Paper

  1. Your worksheet should now look as follows:
  • SUM is just one of many Excel functions. Another is the AVERAGE function, which will calculate the average of a range. To calculate the average number of products across all product lines sold in January, do the following:
    1. Navigate to cell C11.
    2. Enter the following text:

=AVERAGE(

  1. Highlight the range C4 through C8 (or type =AVERAGE(C4:C8) )
  2. Hit ENTER
  3. If you are successful, C11 should contain the value 2.
  • Using the AVERAGE function (or copying the function from cell C11), calculate averages for March and April in cells D11 and E11. Similarly, calculate average units sold per product line by using or copying the AVERAGE function in cells G4 through G8. If you are successful, your worksheet should now look as follows:
  • You can also use the SUM function to calculate the total number of products sold in Q1. Use the SUM function in cell D13 to calculate this value by summing the values in C10 through E10. If you are successful, the result will be 4085.
  • You can write a formula to calculate revenue, which is price/unit times number of units sold, by using the asterisk “ * ” symbol for multiplication. To do this:
    1. Navigate to cell H4. Economics and financial Management For Nurses And Nurse Leaders Assignment Paper
    2. Enter the formula =B4*C4 and press ENTER.
  • Copy or retype the formula to calculate appropriate revenue values for all product lines in all months in cells H5 through J8.
  • Lastly, navigate to cell D14 and calculate the total revenue in Q1 by using the SUM function to add all values between H4 through J8. If you are successful, your worksheet will look as follows:

 

Note: You have completed the practice exercise. Return to the Healthcare Budget Request Step-by-Step Guide Section 2 when you are ready to begin work on FE001 Assessment Part 1. 

 

 

 

FE001 Assessment Part 1: Spreadsheet Fundamentals

Spreadsheet software like Excel is widely used when making proposals like the one you are preparing for a new healthcare product or service. Spreadsheet skills are valuable whenever there is a need to develop, analyze, and/or present financial and other numeric information. Economics and financial Management For Nurses And Nurse Leaders Assignment Paper

In FE001 Assessment Part 1: Spreadsheet Fundamentals, you will analyze data pertaining to a fictitious healthcare organization, HealthWays Clinic Inc. You will perform various calculations and analyze the results.

The following material will guide you through completion of the assessment. To proceed, you will need:

  • This section of the Healthcare Budget Request Workbook: Step-by-Step Guide
  • The Excel file “Clinic.xlsx”, located in the Learning Resources

 

FE001 Assessment Part 1: Step-by-Step Guide

 

  • If you have not done so already, download and open the file “xlsx” located in the Learning Resources. The Clinic.xlsx document has tabs for each competency which can be useful in completing the assessment.

Note: Be sure to save the file to the location you typically save documents and resave after each step to avoid losing work.  Economics and financial Management For Nurses And Nurse Leaders Assignment Paper

  • Navigate to the worksheet labeled “HealthWaysBudget”
  • Develop formulas or functions that calculate totals for the budgeted and actual encounters for June 2018, May 2018, and 2018 Year-to-Date (YTD) in the appropriate shaded cells of row 12.
  • Develop formulas or functions that calculate the variance between June 2018 budgeted and actual amounts in the appropriate shaded cells in column D.
    1. A budget variance is the difference between the budget of units, expense or revenue, and the actual amount.
    2. To calculate a budget variance, it is a little confusing because you are trying to communicate if the variance is favorable or unfavorable. In excel, a number in parenthesis represents a negative number. So, if you see a number in parenthesis in the budget variance column, it represents an unfavorable variance, whereas a number that is not in parenthesis, represents a favorable variance. If you look in your Penner (2016) textbook book on page 127 there is a sample variance report. Using that sample, you can look at units, revenue, and expense and how the variances are calculated.
    3. Basically, units and revenues are calculated as “actual minus budget”, and expenses are calculated “budget minus actual.”
    4. The first items on the “Clinic.xlsx”, first tab, include “Total encounters”, this would be considered a unit measure. So, the budget was for 980 encounters and the actual number of encounters was 997. For the calculation you would subtract budget from actual, which yields a positive number or 17, so you had a favorable budget because you had more encounters that what you budgeted.
    5. The second area is revenue, we will look at “donations” We expected to receive $5,000 in donations but actually collected $5,489, so actual minus budget is $489, which is a positive number and a favorable variance. However, the “private collections” budgeted $3,750, but only collected $3,102, which we again calculate “actual minus budget” which is ($648) an unfavorable variance because they did not collect as much as they had budgeted.
    6. The next section is Expense. Remember for expense you do the opposite, subtract the actual from the planned budget for each line item over the given time period.
    7. For example, the budget for “cost per patient” is $128 but the actual amount was $134. You subtract actual from budget, which yields ($5.99) an unfavorable variance.
    8. If you look at “Nonmedical supplies” the budget is $1,500 but only $1,417 was spent, so budget minus actual is $83, which is a favorable variance.
  • Just a note that when you enter the formula into the excel cells in the variance column, do not use any of the statistical functions such as VAR or VARP, just enter the mathematical calculation in the formula bar. For example, =B10-C10.Develop formulas or functions that calculate totals for personnel expenses and non-personnel expenses in the appropriate shaded cells in rows 17 and 24. Economics and financial Management For Nurses And Nurse Leaders Assignment Paper
  • Develop formulas or functions that calculate totals for health center expenses and their variances in the shaded cells in B25 through G25.
    1. If these trends continue, what could it mean for HealthWays? What strategies might the organization employ to address any issues your analysis suggests?
    2. Review the notes at the bottom of the spreadsheet.
  • Save and submit your FE001 part 1 assessment.

Note: You have completed FE001 Assessment Part 1. Return to the Healthcare Budget Request Step-by-Step Guide Section 3 when it is time to begin the next Assessment. 

 

FE001 Assessment Part 2 and 3: Healthcare Budget Request Workbook and Executive Summary

 

This FE001 assessment has three parts. Part 1 was the spreadsheet fundamentals that you completed in section 2. Part 2 is the development of an Excel workbook template to be used throughout this and future FE competencies when you will analyze data related to your proposed healthcare product or service. Part 3 is the development of an executive summary.

Part 2: Workbook Template

As you progress through this Competency on the development of your Healthcare Budget Request, you will apply financial ratios and other calculations to make the business case for your idea. In Part 1 of this Assessment, you will develop a workbook that may be used in subsequent assessments for use in your analysis. To do this:  Economics and financial Management For Nurses And Nurse Leaders Assignment Paper

 

  • Open a blank Excel workbook. Name this “FE_workbook_firstinitial_xlsx”
  • Create a worksheet for each analysis you will conduct in subsequent parts of your Healthcare Budget Request. Name each worksheet as follows:
    • Estimated Expenses
    • Budget Development
    • Ratio Analysis
    • Financial Statement Analysis

 

  • On each worksheet, include a title/header that reads similar to the following:

You may format these however you see fit, but you should make each worksheet presentable, as these will be used by stakeholders considering your budget request.

  • Save and submit your assessment.

 

Part 3: Executive Summary

An executive summary should summarize key points of a project. Since we are only doing a Healthcare Budget Request and not a complete business plan, we will complete an abbreviated executive summary.

Your executive summary will be a critical first component of your formal healthcare budget request. It will be your first real opportunity to sell leadership and other stakeholders on the value of your proposed product or service. Hence, it should be persuasive. It should also be informative without explaining every facet in more detail that anyone cares to read up front. It should outline why the organization should invest resources in your idea. It should be specific and focus on results. Economics and financial Management For Nurses And Nurse Leaders Assignment Paper

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For the purposes of this Assessment, your executive summary should be 1–3 pages in length. Be sure to review the Learning Resources and conduct your own research to review samples of executive summaries (many examples can be found online, but remember this is an abbreviated summary). Your executive summary should include the following sections (It is ok to use subheading similar to these subheadings):

  • Introduction with purpose statement
  • Problem Identification which describes the gap or opportunity
  • Stakeholders
  • Stakeholder roles
  • Solution identification and description
  • Conclusion

You should use at least 2 credible references and it should be formatted in APA 7th edition. This means double spacing, citations, etc. Economics and financial Management For Nurses And Nurse Leaders Assignment Paper