...Financial Accounting Standards Board or FASB. GAAP is a group of standards for accounting with common industry language developed over many years and used by businesses to organize financial information. The main purpose for GAAP is to make a standard way for anyone to pick up a financial statement and be able to compare financials using the same set of rules. GAAP is an accounting method used in health care facilities. These are specific policies that are used when the health care institution must make important financial decisions. To understand financial statements, the importance and relevance of GAAP must be understood. These standards guide accountants in the measuring and reporting of financial events of healthcare entities such as hospitals, clinics, not-for-profit groups, and other healthcare related businesses. The information used in these financial statements must be relevant, reliable, and comparable. Some of the concepts or principles used in the preparation of financial statements by way of GAAP are discussed below. Accrual Principle The accrual principle simply means that accounting transactions should be recorded in the period that they occur rather than when the cash flows related to them occur. In the healthcare field, all revenue earned for in-house patients should be recorded for GAAP, on the last day of the reporting period. GAAP requires that the hospital is to record revenue earned for in-house patients on the last day of the reporting period. Revenue...
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...This article centralizes around the use of risk averse approaches to appraise the intangible assets of a medical practice in comparison with the regulatory environment when considering the alignment of exempt hospitals and physicians. Different forms of alignment and integration have arisen rapidly within the healthcare industry, especially involving acquisition of physician practices and subsequent employment of physicians by hospitals. This is motivated by the concern over rising healthcare costs and general condition of the economy. Along with the increase in physician employment by hospitals has come enhanced regulatory scrutiny. Valuation of both tangible and intangible assets is necessary but the article’s focus is on the intangible asset of physician practices known as trained and assembled physician workforce in place or TAWF. The underlying concepts discussed around TAWF can be applied to other intangible assets, as well. Also discussed, are the issues with healthcare valuation among legal professional communities over the past few years. The author goes onto explain human capital related intangibles, which includes TAWF. Economic concepts related to the relationship between tangible and intangible assets to the value of an entire physician practice enterprise depicted through Bonbright’s text is explained, as well. The next concept in the article is that of the intangible asset goodwill. It’s explained from both accounting and financial...
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...businesses and industry averages” (Gapenski, 2012). Benchmarking is often called by its alias, comparative analysis. Benchmarking in the industry “enables you to compare details of financial, operational, and clinical performance to similar peer group data” (Cimasi, 2008). Financial Benchmarking Financial benchmarking is just one of many types of benchmarking. It is done in an effort to perform an assessment of an organizations competitiveness and productivity. According to Jack Partridge, vice president of the Chi Systems division of Superior Consulting, “Innovative solutions used utilized by other organizations serve as building blocks for new approaches and may, in fact, result in a new and improved solution. IT is a classic approach to not reinventing the wheel” (Schneider, 1997). Healthcare organizations that ignore the benefits of routine operation performance and financial analysis put themselves at risk of poor performance and ultimately, even failure. Article by Cimasi In the article, Financial Benchmarking Research and its Application to Healthcare Valuation by Robert James Cimasi, he discusses the factors that predict the success or failure of a healthcare enterprise. In addition to discussion of factors affecting success or failure, the author outlines different techniques for benchmarking. As mentioned previously, benchmarking is used to reveal the degree of variability of the organization being examined to comparable healthcare industry norms. Additionally...
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...Online Chapter 15 LEASE FINANCING AND BUSINESS VALUATION Learning Objectives After studying this chapter, readers will be able to describe the two primary types of leases, explain how lease financing affects financial statements and taxes, conduct a basic lease analysis from the perspective of the lessee, discuss the factors that create value in lease transactions, explain in general terms how businesses are valued, and conduct a business valuation using discounted cash flow and market multiple approaches. Introduction This chapter covers two unrelated topics: lease financing and business valuation. Leasing is a substitute for debt financing and hence expands the range of financing alternatives available to businesses (and to individuals). However, leasing should be used only when it offers some advantage over conventional financing. We begin this chapter by discussing factors that contribute to the large amount of leasing activity among healthcare businesses and how businesses analyze lease transactions. The valuation of entire businesses, as opposed to capital projects, is a critical step in the merger and acquisition process. In addition, business valuation plays an important role when one owner is bought out by other owners and when businesses are inherited. The second part of this chapter discusses two techniques used to value businesses. Leasing Basics Businesses generally own fixed assets, but it is the use of buildings and equipment that is important, not their...
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...GAAP hierarchy consists of the sources of accounting principles used in the preparation of financial statements of federal reporting entities that are presented in conformity with GAAP and the framework for selecting those principles. The hierarchy lists the priority sequence of sources that an entity should look to for accounting and reporting guidance; this language is used in the business of health care (fasab, 2011).” The five principles of accounting include accounting entity, money measurement, duality, cost valuation, and stable monetary unit (Cleverly, Song, & Cleverly, 2011). This paper will include a brief description of each principle with the intention behind the principle and relate each principle to health care. Accounting Entity According to Cleverly, Song, and Cleverly (2011) the accounting entity is an organization for which financial information is recorded and reported. In health care, accounting entities may include surgical centers, hospitals, clinics, or others that are part of a larger corporation. Problems may occur when accounting entities differ. An example of accounting entity is a physician who may own a surgical center; that center and personal resources operate using different entities. The entity needs to be clearly defined or the information may be useless or misleading (Cleverly, et. al.2011). Money Measurement As stated by Accounting Tools, the money measurement concept states “a business should only record an accounting transaction if...
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...finances can be ambiguous or gray. Additionally, the principles guide the reporting systems to prove or disprove the financial viability of the organization. This again is important in the healthcare industry related to achieving the goal of providing quality care to patients (Cleverly, Song, & Cleverly, 2011). GAAP focuses on five different principles of accounting. Accounting entity, money measurement, duality, cost valuation, and stable monetary unit are the five principles discussed in the following paragraphs. Principle definition and the relationship they have to the healthcare industry will be identified and correlated to healthcare practices. Accounting Entity Cleverly, Song, & Cleverly (2011), define an accounting entity as the organization for which financial statements are being formed. They discuss the difference between entities such as sole proprietorship, incorporations, and affiliations with government agencies and universities. The clear definition does not include employees or other persons or organizations with vested interest in the organization but solely the organization’s financial transactions (Cleverly, Song, & Cleverly, 2011). An example of a healthcare entity may be James A. Haley Medical Center in Tampa, Florida. Although the hospital is associated with a university and operated by the federal government, it is still considered its own...
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...Accounting Principles Related to Nursing Olasumbo Dada University of Phoenix Abstract The continuing rise in technological advancement in the health care industry has led to a rising cost in the industry. Hospitals and other healthcare sectors face a major challenge in managing the massive change in respect to cost and still being able to provide excellent care for their patients considering the expansion that the industry is continuously facing. As a result, the financial accounting aspect of the healthcare industry needs more attention than ever. The advancement in the financial aspect of healthcare requires more people to assume administrative duties. Cleverly, Song, & Cleverly (2011). For healthcare organizations to function properly in the increasing change in cost, revenue, and reimbursement by third parties, certain principles are necessary to be in place. According to Voelm, K. (2013), some generally accepted financial principles in healthcare are: Accounting Entity, money measurement, duality, cost valuation, stable monetary unit. Accounting principles related to Nursing Accounting Entity: Accounting entity is the part of a business that specializes in economic activities. Once an entity is established, accountants are able to determine the cash flows and transactions that will impact the entity's financial statements. Accountants in organizations focus on accounting entities and report transactions that are related to that entity. Accounting entities control...
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...DSE: SQURPHARMA Bloomberg: SQUARE:BD 52-week Price Range (BDT) Current Price 12-month Target Price Cash Dividend BDT Total Return Number of Shares MM Free Float Average daily volume MM BDT BDT mn Net Sales Ops Income Net Income Margins Gross Margin Operating Margin Net Margin Growth Revenue Growth Operating Profit Growth Net Profit Growth Per Share BDT EPS Dividend Book Value/Share Cashflow BDT mn NC Working Capital Capex Dividend Valuation P/E P/B ROE Miscellaneous BDT mn Total Debt Cash Debt/Equity 2,841 - 4,362 3,092 3,850 42 26% 20 46% 184.1 Rating: OUTPERFORM February 24, 2010 Leading the Bangladesh Pharmaceutical Industry Investment positives Square Pharmaceutical Limited (SPL) is the largest pharmaceutical company in Bangladesh, with the largest domestic market share of 19.3%, in what is a highly competitive pharmaceuticals market. Return on equity has been improving, gradually moving up to 19% for the last couple of years. Margins have been improving steadily. SPL currently boasts one of the highest gross margins (51%) in the industry. Massive expansion significantly. plan, which will increase current capacity 2010A 2011E 2012E 12,971 15,663 19,141 3,326 2,497 3,858 3,358 4,764 4,251 2010A 2011E 2012E 51% 22% 17% 51% 21% 18% 51% 21% 19% 2010A 2011E 2012E 10% 14% 21% 21% 16% 34% 22% 23% 27% SPL has been gearing up to transform itself into a big exporting company focusing on attaining certifications from regulators of developed markets...
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...Accounting Principles Relating to Healthcare Christine Watts HCS/571 May 26, 2014 David Catoe Accounting Principles Accounting is a numbers related profession. Staying solvent financially are what business leaders and owners strive for to stay competitive and to keep their doors open. Healthcare institutions are in the business to care for people, but at the same time they must make money in order to achieve this goal. Whether they are for profit or not for profit, accountants and financial managers make decisions every day to keep budgets in line, keep people working, and patients happy. No matter what position one holds in a company, it is important to have a basic understanding of general accounting principles and how they apply to healthcare. The first principle is the accounting entity. The entity is an organization in which the financial information is recorded and reported (Cleverly, Song, & Cleverly, 2011). This must be clearly defined so that the financial reports give a clear picture of the finances for that specific organization. The accounting entity is different from the legal entity so if the organization is a subsidiary or a sole proprietorship, the financial picture must be for the defined organization so that the information is useful and not misleading. Health care organizations that have ownership of many different entities, must keep them separate so that each organization has a clear defined picture of its own financial information...
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...Kinder International Healthcare Consultancy Pvt. Ltd. KIHC Service Provision in Management Consultancy NABH accreditation consultancy Develop SOPs, Policies, manuals etc. Organization assessment audit Business process re-engineering Operational and Retainer Management Consulting Hospital Setting up - Women and Children Care o Conceptualization o Designing and Implementation o Staff Recruitment o Commissioning Kinder IVF o Centre design and setting up o Kinder IVF Protocols o Staff Recruitment o Quality Management NABH accreditation consultancy We are continually seeking ways of improving our services to our valued customers in all business processes by expanding our overall service and now with the addition of “Quality Consultancy Service”. We guarantee quality assurance of an organization by ensuring that the structure, processes and outcomes of the organization are commensurate to the needs of the national and international accreditation norms. Our strength is systematic and working approach of which each steps is bounded by a predefined time scheduled time frame systematic working approach with high level of quality outcome. frame. As a result achievement of the accreditation within a guided by Page 1 of 4 To help the clients to achieve Quality Accreditations as a bi‐product of improvements in service quality, KIHC provide following scope of services: Perform initial Assessment of existing policies, standard operating procedures, processes and infrastructure...
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...1) Pharmaceutical Industry in India: India is the third largest pharmaceutical market in the world in terms of volume. The market is believed to grow at a compound annual growth rage (CAGR) of 14-17 percent in between 2012-16. There has also been a considerable growth in the levels of pharmaceutical exports from India. The industry started picking momentum in the early 1960s, with government actively encouraging the sector with the Patents Act. However, the liberalization of 1991 enabled the industry to become what it is today. Many of the Indian companies principally observe reverse engineering of the new processes for manufacturing drugs at low costs. Although some of the companies have taken baby steps towards innovating newer drugs, the industry as a whole tends to follow this business model. The lack of patent protection, on the other hand, makes India undesirable for multinational companies that have dominated the market. So the pharmaceutical market in India has a tremendous potential for indigenousness. In this context, comparing a global pharmaceutical company with its Indian counterpart becomes evident. GlaxoSmithKline and Ranbaxy: A Comparison GlaxoSmithKline is a British multinational pharmaceutical company also dealing in biologics, vaccines and consumer healthcare. Headquartered at London, it is the world’s sixth largest pharmaceutical company. The company was established in 2000 by the merger of Glaxo Wellcome and SmithKline Beckman Corporation. A giant...
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...Around the world, there are many highly skilled, independent thinking professionals who would rather operate a business of their own than work for someone else. These entrepreneurs start up thousands of businesses each year however, not all succeed. Statistics gathered by the National Federation of Independent Businesses reports that only 39% of new businesses in the United States finish the year making a profit. Numerous reasons exist why new businesses fail, but many new business owners find that although they are very competent in their profession, they struggle with operating a business (Klein, 1999). B-Team Consulting can help the new business owner make sure he or she winds up in the 39% group of profitable new businesses. Our firm provides several services to ensure the new business reaches its goals. The firm offers business plan preparation, often the first impression investors have of a business. Marketing analysis services will help a new business with a complete marketing strategy to make the most of its advertising resources. The B-Team Consulting firm can help in website design and promotion to ensure optimal Internet exposure. These are a sampling of many services B-Team Consulting can offer (Williams, 2011). Problems the Firm Can Remedy Many small businesses face declining sales and fewer repeat customers after expansion. The owner of the small business finds that once the business expands beyond the initial workforce, there is a drop in repeat customers. When...
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...Vocabulary: Defining |FARS to Untangle the Mystery |FARS [Related Assignments at End| |System (FARS) Through Cases 2nd |Terms and Solving Problems |[See Introduction and Example |of Cases] | |Edition by Wallace [Chapter 1 |Through FARS [See Introduction |pp. 4-1 to 4-7] | | |and 2 where noted] |and Example pp. 3-1 to 3-7] | | | |FASB, Standard Setting; GAAP; |Table 3.1 Accounting Standards; |1: How Many Standards Have Been |Case 12: Emerging Issues: The | |Governance; FARS [Chapter 1 – |Table 3.39 Regulated Industry; |Issued by FASB?; 2: Dissents |Agenda of FASB; [Case 8 Related:| |The Financial Accounting |Table 3.40 Specialized Industry |Portending Future?; 32: What |Does It Matter Where Guidance Is| |Research System (FARS) Primer.] |Considerations |Makes One GAAP Preferable to |Located?]; [Case 12 Related: Are| | | |Another?; 30: When Can Analogies|Accounting Rules to Blame?] | | | |Be Used?; 31: What Are the 10 | | | | |Most Important Assumptions?; 33:| | | | |Are...
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...areas of finances can be ambiguous or gray. Additionally, the principles guide the reporting systems to prove or disprove the financial viability of the organization. This again is important in the healthcare industry related to achieving the goal of providing quality care to patients (Cleverly, Song, & Cleverly, 2011). GAAP focuses on five different principles of accounting. Accounting entity, money measurement, duality, cost valuation, and stable monetary unit are the five principles discussed in the following paragraphs. Principle definition and the relationship they have to the healthcare industry will be identified and correlated to healthcare practices. Accounting Entity Cleverly, Song, & Cleverly (2011), define an accounting entity as the organization for which financial statements are being formed. They discuss the difference between entities such as sole proprietorship, incorporations, and affiliations with government agencies and universities. The clear definition does not include employees or other persons or organizations with vested interest in the organization but solely the organization’s financial transactions (Cleverly, Song, & Cleverly, 2011). An example of a healthcare entity may be James A. Haley Medical Center in Tampa, Florida. Although the hospital is associated with a university and operated by the federal government, it is still considered its own financial entity. Additionally, the campus houses a domivillary and a nursing home which is...
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...CALIFORNIA Marshall School of Business Fall 2011 Financial Analysis and Valuation FBE 529 Monday, Wednesday Class Instructor: Lloyd Levitin Time and Place: 3:30 – 4:50 P.M.; JKP 212 Office: Accounting 301E Office Hours: M, W: 2:15-3:15 P.M.; T: 5-6 P.M., and by appointment Office Phone (USC): 213-740-6524 Office Phone (Home): 310-858-0260 Email Address: levitin@marshall.usc.edu (preferred method of communication; please indicate on your email communication the class you are in and when it meets). Teaching Assistant: Brian Kaemingk (email: brian.e.k@gmail.com Course Website: On Blackboard http://blackboard.usc.edu COURSE OBJECTIVE Understanding what determines the value of a firm and how to estimate that value is a prerequisite for making rational business decisions. Entire industries (investment banking, securities analysis, and consulting) have grown prosperous providing valuation skills to investors and managers. The objective of this course is to give a general grounding in the valuation approaches used by successful practitioners. We cover discounted cash flow models, market multiple models, as well as specialized models used for M&A transactions and LBOs. We focus on valuation of businesses at the divisional and corporate levels. The course emphasizes practical and “real world” applications of valuation methodologies. The course is of interest to those contemplating careers...
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