# Application Assignment Net Revenue and Budgeting

Assignment: Looking Ahead: Application Assignment Net Revenue and Budgeting

No one can predict the future, but accountants and financial managers must try and do exactly that!  By examining net revenue, costs, and cash flow, you can get a clearer picture of what to expect in your organization’s (or one with which you are familiar) fiscal future. Using these metrics to look forward will enable you to more effectively plan budgets that accomplish organizational goals.  When developing a budget, what variables do you have to take into account? In health care organizations, two of the largest groups of factors that you must consider are first, volume, and second, staffing and supply. The number of patients and tests performed each day, as well as employees and their pay rates are all crucial pieces of information when determining a budget.  In this Assignment, you address five scenarios: net revenue, fixed and variable costs, cash flow, volume budget, and staffing and supplies budget.   Note: For those Assignments in this course that require you to perform calculations you must:  •Use the Excel spreadsheet template for the Week 5 assignment.

Show all your calculations and formulas in the spreadsheet. •Answer any questions included with the problems (as text in the Excel spreadsheet).   A title and reference page are NOT needed in this assignment.  Put your name and assignment at the top of the Excel spreadsheet.  For those not comfortable with the use of Microsoft Excel, this week’s Optional Resources suggest several tutorials.  To prepare: •Review the information in this week’s Learning Resources regarding net revenue, fixed and variable costs, and cash flow, and how they are used in financial decision making.  •Review the budgeting information in Week 5 Learning Resources dealing with volume, staffing, and supplies budget.

Be sure and include all of your calculations

Required Readings  Baker, J. J., Baker, R. W., & Dworkin, N. R.  (2018). Health care finance: Basic  tools for nonfinancial managers (5th ed.). Burlington, MA: Jones and  Bartlett Learning.  •Chapter 7, “Cost Classifications” (pp. 55-61)    In this chapter, you focus on the difference between direct and indirect costs and why it is crucial for financial managers to understand the difference.     •Chapter 8, “Cost Behavior and Break-Even Analysis” (pp. 65-78)    This chapter continues the discussion on costs. It describes the differences between fixed, variable, and semivariable costs. It demonstrates how to compute the cost-volume-profit (CVP) ratio and the profit-volume (PV) ratio.  Zelman, W., McCue, M., & Glick, N. (2009). Financial management of health care organizations: An introduction to fundamental tools, concepts, and applications (3rd ed.). Hoboken, NJ: Jossey-Bass.  Retrieved from the Walden Library databases.  •Chapter 3, “Principles and Practices of Health Care Accounting” (pp. 87–120)    Review: This chapter explores the accounting practices and principles of health care. The authors detail the rules for recording transactions and the process of recording and developing financial statements.     •Chapter 4, “Financial Statement Analysis” (pp. 121–186)

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