Homework Question on Financial Information
- Financial Information Needed Read Assignment 3 in Chapter 1 of ( Essentials of health care finance (7th ed). Sudbury, MA: Jones & Bartlett. ISBN: 9780763789299) and in 300-350 words, answer the following questions
- What financial information should be routinely provided to board members?
- Do you think it’s important for board members in health care organizations to have basic accounting or financial background? Why or why not?
- Required Text: Cleverley, W., Song, P. & Cleverley, J. (2011). Essentials of health care finance (7th ed). Sudbury, MA: Jones & Bartlett. ISBN: 9780763789299.
Homework Answer on Financial Information
In decision-making process, financial information is extremely essential in order to evaluate how the business is performing in a given period. Some of the financial information that the board members should be provided with routinely include business profit margins, capital structure, monthly costs and overheads, tax structures, and asset acquisition, among others. Some of the financial information can be made available at the end of every financial year while other are offered quarterly, or after six months.
Profit and revenue of a company is vital in understanding the position of the company while investors are driven by organizations that perform excellently throughout the year. The board members should be capable of comprehending the financial statements so that they can contribute effectively in decision-making processes. Transparency is crucial in sharing financial information, since some of the board members are motivated by the financial results that depict the truth about the business performance (Renz, 2010, pp. 462-463).
It is quite important for board members in health care organization to possess basic accounting or financial background to assist in interpreting financial information. Effective decision-making will depend on how accurate the decision makers are with financial information. According to Cleverly, Song and Cleverly (2011), governing boards are the frequent users of financial information, thus, they should be trained on basic accounting to understand the criteria that are used in determining costs (p. 3).