WGU C428 Review Latest Update Graded A

WGU C428 Review Latest Update Graded A Direct Costs Costs that can be specifically identified with a particular project or activity. Direct Labor - Direct Materials - Manufacturing Supplies Indirect Costs Costs that are the result of general operations and are not directly tied to any specific project or activity Rent - Utilities - General Office Expenses Cost Prior to delivery of service Cash Payment for operations, revenue, form of accounting Capital Investment, fixed assets, encompass money and assets Control Measuring cost, capital, cash Cost of Debt Interest rate required by lenders to furnish capital Cost or Equity Return required by owners to furnish equity capital Cost of Capital Weighted average of the costs of debt and equity financing used to generate capital for investments Chief Financial Officer Reports to CEO, Responsible for ALL finance activities Controller Responsible for ACCOUNTING and REPORTING activities. Treasurer Responsible ACQUISITION of capital Healthcare manager Must understand the implications of finance management Organizational Structure Key influencing factors include financial risk, liability, taxation, and organizational goals Corporate loan interest A combo of assessed risk and inflation determine the interest rate of a healthcare organization's loan Debt financing and Equity Determining debt versus equity financing involved weighing risk against return Capital structure Businesses should have optimal capital structure that balences the costs and benefit of debt financing to minimize corporate costs of capital Break-Even Analysis Determines the point when the investment in the project will generate a positive return Discounted cash flow analysis Estimates the value of an investments expected cash flows to help determine the attractiveness of the investment Return on Investment Used to measure the efficiency of the investment of the project Post Audit Used to review the process the check the outcomes of individual investment projects after the initial investment is completed. Ratio analysis The calculation and interpretation of a financial ratio Meta-analysis A procedure for statistically combining the results of many different research studies Non-profit organization A business whose goal is to provide a service rather than to make a profit For-profit Institution operated for the purpose of making a profit Highly leveraged Firms that rely on a lot of debt in their capital structure Business Debt Loans, bonds, mortgages Payback Method The amount of time required for a firm to recover its initial investment in a project, as calculated from cash inflows Capital Restructuring Changing the amount of leverage without changing the firm's assets Net Present Value Used in major capital budget decisions when comparative analysis is used Internal Rate of Return Net present value of an investment project is zero Budget variance The difference between the budgeted amount and the actual amount that you spend Marketing budget The amount to be spent on marketing and promotion over a certain period of time Cash flow budget A budget that shows projected cash inflows and outflows for a specified period Operational Budget A short-term financial plan used to coordinate the activities needed to achieve the short-term goals of the company. Human Resources Budget Money for benefits, hiring Liquidity The ability of a business to meet its cash obligations as they become due Payables Management -firms should monitor accounts payable to ensure that they are making payments on time - paying late reduce direct costs but may hurt relationship with suppliers Receivables Management Trying to receive customer payments as quickly as possible. Accounts Receivable The total amount of money owed to a business. Accounts Payable Money owed by a company to its creditors. Cost-benefit analysis A study that compares the costs and benefits to society of providing a public good Medicare Part A Provides basic protection for medical, surgical and psychiatric care costs based on diagnosis-related groups(DRGs) Medicare Part B The part of the Medicare program that pays for physician services, outpatient hospital services, durable medical equipment, and other services and supplies. Medicare Part C (Medicare Advantage) •Replaces and covers expenses found in Part A and B •Medicare private fee-for-service plans (PFFS) •Medicare managed care plans (HMOs and PPOs) •Medicare specialty plans Medicare—Part D Prescription Drug Coverage - gives pt a discount 11-17% and not free drugs - pay a premium and a copay First-Party Payer Patient reimburses healthcare provider for services Second-Party Payer Provider Third-Party Payer Insurance company that pays for healthcare services on behalf of a patient Self-Pay A patient with no insurance coverage and is responsible for all health care expenses. Case Mix Index The average relative weight of all cases treated at a given facility or by a given physician, which reflects the resource intensity or clinical severity of a specific group in relation to the other groups in the classification system Negotiated Rates (Healthcare) Amount the insurance set (Guaranteed, not flexible) Pay-For-Performance Bases pay on one's results Capitation Where physicians and hospitals are paid a fixed, per capita amount for each patient Reimbursement to the hospital on a per-member/per-month basis to cover costs for the members of the plan. Modified Fee-For-Service Payments are based on a negotiated fee schedule Cash Accouting Recognized when payment RECIEVED Accural Accounting Recognized when SERVICE rendered Fund Accounting The operations of each fund are accounted for with a separate set of self-balancing accounts that comprise its assets, liabilities, fund equity, revenues, and expenditures, or expenses, as appropriate. Fiscal Accounting Accounting system geared toward producing annual and quarterly consolidated financial statements that will be used by investors and creditors to make investment and lending decisions. Operating Income Profitability from normal operations that equals gross profit less operating expenses Total Equity Total assets - Total liabilities Comparative Analysis A method of determining the value of property in which the selling prices of similar properties are used as the basis for estimating the value of the subject property. Cash flow from Operations The net amount of cash provided from operating activities. DuPont Analysis Technique of breaking return on total assets and return on equity into their component parts Variance Analysis A technique for determining the cause and degree of difference between the baseline and actual performance. Cash on Hand The amount of money the healthcare facility has in the bank that can be withdrawn as cash. Vertical Analysis Each line Item, line by line Horizontal Analysis (trend analysis) A technique for evaluating a series of financial statement data over a period of time Fundamental Analysis The study of a company's accounting statements and future prospects to determine its value Beginning Inventory The amount of inventory on hand at the beginning of a fiscal period Times Interest Ratio EBIT/Interest Return on Assets Net Income / Total Assets Floating Rate Bond a bond whose interest rate fluctuates with shifts in the general level of interest rates Marginal Cost The increase in total cost that arises from an extra unit of production Price Setter A producer that can set a price for a product, rather than accepting the market price Earned The accrual method of accounting, when following GAAP, recognize revenue when______________________ Negotiated Rates Financial Benefit to MCO Rates set by provider groups Marketing A Direct Cost Profitability Ratio Can tell us how good a company is at making money Credit Enhancement Insurance that guarantees the payment of interest and repayment of principle on a bond if the borrower defaults. Investment Grade Debt Debt with BBB or higher rating. Generally considered to be suitable Junk Debt BB rating or lower Call Provision Right of Bond Issuer to redeem the bonds under specified terms prior to the normal maturity date Restrictive Covenant Agreement not to compete in a region for a period of time, in other words, cannot take patients if leaving a Group or Network. Certificate of Need A state-directed program that requires healthcare facilities to submit detailed plans and justifications for the purchase of new equipment, new buildings, or new service offerings that cost in excess of a certain amount C Corporation A traditional for-profit corporation S Corporation A for-profit corporation with a limited number of stockholders that is taxed as a proprietorship or partnership The Joint Commision A not-for-profit organization that evaluates and accredits different types of healthcare facilities Times Interest Earned Ratio Expense Before Interest + Taxes / Interest Expense Hospital Initiative as pertains to Income Statement Pay off Debt Modified Fee-for-servcie Reimbursement based on fee schedule Additional information needed when looking at 10 day inventory Supply Expense Alternative Care Higher interest rates due to non-standard of care Variable Cost Cost changes with production, DTE, Gasoline Fixed Cost Cost does NOT change, Rent, Car Payment Receivables Money coming in (Income) Payables Money going out (Owed) Capital Budget Budget for major capital, or investment, expenditures NEW TEE machine or Anesthesia ventilator Operating Budget Budget for day-to-day expenses Excess Capacity Unused bandwidth, (give the people sitting around something to do) Cash Flow Budget Budget that shows projected cash inflows and outflows for a specified period Current Revenue Cycle Process Check In Insurance Assign ICD-10 (Diagnose) Enter Charges Submit Claims Follow up payment & collections Bonds Due 10,15,20 Year Increments Tax Exempt Bonds Lower interest rate vehicle