...Alternate Working Capital Policy In the health care field it is extremely important to have available cash for contingencies because anything can happen in the health care field. For example, the changes in laws and procedures such as the Affordable Health Care Act, has caused some major changes for health care facilities, physicians, and insurance companies and the changes have put some hospitals at a standstill but they still must operate and cash on hand would help in this situation. “Good cash management should focus not only on the acceleration of receivables, but also on the complete cash conversion cycle” (Cleverly & Cameron, 2007). Elijah Heart Center (EHC) is a New York hospital that specializes in cardiac care with 140 beds. To provide full support for cardiovascular patients, EHC includes the following services: cardiac catheterization laboratories, ancillary equipment for radiology, nephrology, laboratory, surgical suites for open-heart surgery, pulmonology, and other cardiovascular services. EHC’s patient volumes and revenues are growing but profit is dropping (University of Phoenix, 2012). Elijah Heart Center is facing a potential working capital shortfall. This paper will discuss alternate sources of short-term financing, how accounts receivable and inventory affect EHC, discuss the importance of the cash conversion cycle to EHC’s working capital. As well as discuss EHC’s risks associated with the recommendations and how to adjust for risks, and explain how...
Words: 1209 - Pages: 5
...Journal Of Financial And Strategic Decisions Volume 10 Number 3 Fall 1997 STRATEGIC ASSETS, CAPITAL STRUCTURE, AND FIRM PERFORMANCE Rahul Kochhar* Abstract Possession of strategic assets is a necessary condition for sustained competitive advantage. This condition is, however, not sufficient. Firms require financial management capability to realize the rents present in their strategic assets. The firm-specific nature of strategic assets implies that they be financed primarily through equity; other less specific assets should be financed through debt. Firms are likely to suffer increased costs and decreased performance if they do not adopt suitable governance structures in their transactions with potential suppliers of funds. INTRODUCTION The recently developed “resource-based view of the firm” seeks to focus the attention of researchers and managers alike on the unique and hard-to-copy strategic assets of the firm [7, 61]. Firms earn economic rents from these assets when there is an initial level of asymmetry in resource endowments, there is imperfect mobility of these assets, the market for these assets is imperfect, and competitors cannot easily obtain similar assets [2, 6, 7, 20, 24, 48]. Strategic assets provide the firm with a source of steady stream of rents so that it gains a sustained competitive advantage over its rivals. While researchers in this area have a general agreement over the characteristics of strategic assets (albeit adopting slightly different terminology...
Words: 8274 - Pages: 34
...LESSON 2 – Contract Delays determine if a delay is excusable. determine if a delay is compensable. Homework Assignment 1 1. What clauses excuse the contractor’s failure to perform on time due to an act of God or the public enemy? 52.249-8(c) Except for defaults of subcontractors at any tier, the Contractor shall not be liable for any excess costs if the failure to perform the contract arises from causes beyond the control and without the fault or negligence of the Contractor. Examples of such causes include (1) acts of God or of the public enemy, (2) acts of the Government in either its sovereign or contractual capacity, (3) fires, (4) floods, (5) epidemics, (6) quarantine restrictions, (7) strikes, (8) freight embargoes, and (9) unusually severe weather. In each instance the failure to perform must be beyond the control and without the fault or negligence of the Contractor. 2. What events stated in these clauses, other than acts of God or the public enemy, would excuse a contractor’s failure to perform on time? 2, 3, 6, 7 and 8 3. Do any of the clauses in #1 entitle the contractor to an adjustment in the terms of the contract? If so what type of adjustment? ?? 4. What clauses can the Government use to order a suspension of work or a work stoppage? 52.242-14 and 52.242-15 5. For what types of contracts would each of the clauses in your answer to #4 be used? fixed-price construction or architect-engineer contract is contemplated: As prescribed...
Words: 8625 - Pages: 35
...analysis “provides a great deal of important information regarding financial condition, it often fails to provide much insight into the operational causes of that condition” (Gapenski, 2008, p. 561). Financial data analysis identifies an organizations strengths and weaknesses by proving the relationship among items of a profit and loss account and a balance sheet. Numerous techniques or systems are used in analyzing financial statements. One such technique is comparative analysis. Comparative analysis “identifies new trends when data or ratios for a specific item from multiple time frames are presented alongside of each for a straight across comparison” (Investor Words, 2014, para. 1). This method can also be used to compare outcomes of alternate solutions or processes applied in similar situations. Other methods for analyzing financial data include “schedule of changes in working capital, common size percentages, funds analysis, trend analysis, and ratios analysis” (Accounting for Management, 2014, para. 3). The Patton-Fuller Community Hospital: Financial Analysis At first glance of the Patton-Fuller Health Care Organization one would assume this organization is viable. This would be due in part to a recent upgrade in operations. The balance sheet of December 31 2009-2008 reflects an increase of revenue. In addition to the increase of revenue, some expenses were also increased. It has yet to be determined if these increase were due to extended loans, or credit. However, one...
Words: 714 - Pages: 3
...Lotus Rental Going Green Richard Huerta, Mona Miles, Timothy Likens COM/215 April 27, 2014 Whitney Bell Alternate-Fueled Vehicles Going green is becoming more and more popular with advances in technology. One way is to own a vehicle that uses other than fossil fuels. Automobiles in the last 10 years have evolved from using gasoline and diesel as a primary power source, and now include features once only seen in luxury cars. Introducing them to a rental car company may give it more of a variety to offer its customers. Introduction This paper is to introduce the idea of the integration of alternate-fueled vehicles into the Lotus Rental Car Company and the feasibility to do so to the Chief Financial Officer. There are numerous factors to consider. A large purchase, especially for vehicles, requires in-depth research and weighing of advantages and disadvantages that need to be evaluated. Alternate Fuel Sources There are a few power source options when looking to buy or lease alternate fueled vehicles; ethanol; flex-fuel; hybrid; electric; and natural gas. Alternate fuel source seem to be attractive for consumers as the high prices for fossil fuels continue to climb. With the purchase of new fuel-saving vehicles in mind, each fuel source will be examined. Each type of fuel does have its own great benefit as well as drawback. Ethanol Ethanol is a fuel that is usually comprised of 10% gasoline and 90% ethanol. The more commonly known mixture is 15% and...
Words: 1827 - Pages: 8
...British pounds, which today would be equivalent of 2400 US dollars. The terms of this agreement were that all credit advanced and to be advanced would be paid in exchange for the Pilgrims to work for a term of seven years. At the end of the seven year term, payment in full would be made to the merchant, also known as a creditor, based on the size of the initial investment. At end of the seven year period the Pilgrims were unable to settle their debt in full with the England merchant. An alternate agreement was made in which the Pilgrims were required to pay 200 British pounds per year for a term of nine years until paid in full. Unfortunately this arrangement failed as well and was renegotiated. Finally after twenty-five years, the final payment was made to settle the debt in full. The history of this transaction is noted as the first example of credit in early American credit. Throughout the years, several transactions were made that used a form of credit such as the financing of the American Revolution by Congress making efforts to finance the Army of the United Colonies. Congress had three options: 1.) borrow money from sympathetic countries abroad, which was a problem since the credit world stood at zero for the...
Words: 1758 - Pages: 8
...- These are the parts that are replaced after the purchase of a vehicle. Air filters, oil filters and replacement lights are examples of products from this area of the sector. * Rubber Fabrication - This includes everything from tires, hoses, belts, etc. In auto industry, a large proportion of revenue comes from selling automobiles. The parts market is even more lucrative. For example, a new car might cost $18,000 to buy, but if you bought, from the automaker, all the parts needed to construct that car, it would cost 300-400% more. A significant portion of an automaker's revenue comes from the services it offers with the new vehicle. Offering lower financial rates than financial institutions, the car company makes a profit on financing. Extended warranties also factor into the bottom line. Greater emphasis on leasing has...
Words: 1391 - Pages: 6
...Risk Management- Task 1- Hoke Enterprises, Inc. Tara Johnson A. 2. Risk Description Source Likelihood of Occurrence* Severity of Impact* Controllability* 1. Customer Changes to the brief and/or scope of work contract Low High medium 2. equipment Failure to order on time resources Low High High 3. Interruption to Supply Location to major suppliers must be identified in relation to season, geographic area, & natural disaster. organization high medium medium 4. design Movement of existing structure natural Low Medium medium 5. bid price May be higher than budget allowance. contract low High high 6. financing Failure to secure sufficient revenue to meet operating costs. Economical Low High medium 7. Skill shortage Meeting balance between skilled workforce & demand. social Very high high high 8. licensing To avoid conflicts with community & maintain good reputation in environmental, health, & safety. legislative high high high 3. Risk levels- These should be categorized by the probability of the occurrence and its uncertain impact. The requirements per scalability levels should be set at minimum requirements. The project team may choose to work at a higher scalability level than required or work at a lower level. However, the project team should consider other factors to determine what level of risk management effort is needed. These factors may include: (1) political sensitivity, (2) the type of the project, (3) location of the project and the...
Words: 2111 - Pages: 9
...be transferred to other people or estates. The cons of partnership are that all partners doing business are potentially and personally liable for all business debts and lawsuits. Each partner is financially responsible for his or her share of the business debt and it is the partner with the greatest assets who loses the most if the business fails. The unlimited liability of partnership is not only the advantage but also a disadvantage. 1) Discuss funding options for small businesses. The funding options for small businesses are debt financing, equity, venture capital: Debt Financing is a way where many small businesses start up with loans and having good credit with an established bank will help the small business in getting debt. However, banks are often reluctant to loan to non established businesses, but can be get around by going through the federal Small Business Administration, which would assists the entrepreneurs with securing financing. Equity is another way to get money by attracting investors because selling a share of any business may not receive all of the business profits, but it can be a way to start the business. Investors who are said to be private are the silent partners such as business...
Words: 1688 - Pages: 7
...Venture capital (VC) is monetary capital gave to early stage, high-potential, development new businesses. The venture capital store procures cash by owning value in the organizations it puts resources into, which typically have a novel innovation or plan of action in high innovation businesses, for example, biotechnology and IT. The ordinary venture capital speculation happens after the seed financing round as the first round of institutional capital to store development (likewise alluded to as Series A round) in light of a legitimate concern for creating a return through a consequent acknowledgment occasion, for example, an IPO or exchange offer of the organization. Venture capital is a sort of private equity. In addition to angel investing, equity crowd funding and other seed funding options, venture capital is attractive for new companies with limited operating history that are too small to raise capital in the public markets and have not reached the point where they are able to secure a bank loan or complete a debt offering . In return for the high risk that venture capitalists accept by putting resources into little and less develop organizations, venture capitalists typically get huge control over organization choices, notwithstanding a significant allotment of the organization's proprietorship (and subsequently esteem). Venture capital is likewise connected with occupation creation (representing 2% of US GDP), the learning economy, and utilized as an intermediary measure...
Words: 1467 - Pages: 6
...levels (knowledge, understanding, application, analysis, synthesis, and evaluation) separate basic knowledge acquisition from the critical thinking and analytical skills necessary for making ethical decisions or judgments. Answering questions about business ethics requires knowledge from multiple disciplines, including philosophy, psychology, political science, sociology, economics, finance, organizational management, and law. Analyzing such a vast body of data in ethical frameworks requires the highest levels (analysis, synthesis, and evaluation) of critical thinking as expressed in the taxonomy. Corporate governance, an interdisciplinary subject addressed in all these disciplines, explores the inter- workings of both for-profit firms and not-forprofit firms and is an area requiring business students to evaluate ethical issues when making decisions. Despite the broad responsibility of teaching corporate governance in the finance classroom, the pedagogy of finance has been restricted to ideas derived primarily from economics, statistics, and finance. Competing ideas from other disciplines are generally unwelcome and/or are treated with skepticism. Even the ideas of some researchers from the fields of economics and finance such as Hart (1995) and Tirole (2001) who promote alternate solutions to corporate governance beyond agency theory are ignored or overlooked. As a result, business ethics and corporate governance topics often are introduced in apro forma, compulsory fashion...
Words: 7223 - Pages: 29
...Case Analysis – Strategic Management – Apple, Inc. Introduction The purpose of this paper is to explain the definition of Strategic Management and why it is critical to the success of an organization in meeting its goals and mission. The analysis will The paper will include a brief analysis of the situation and pending decision problem, as presented in the case and in relevance to the answer. In addition, the major issues will be surrounding the organization or individuals involved with the organization. Included will be alternate courses of action to address the issues identified. Next, will be the decision or recommendation for action, with the appropriate supporting arguments if any. Statement of the Problem(s): Thousands of people were laid off at Apple, Inc. It does not look like Apple, Inc. spent much time working on its management and marketing strategies from the beginning. It was not until better marketers such as Jobs and Sculley came into the picture, before the company started to expand to better markets with acquisitions and joint ventures. The problem was not changing their strategy sooner. The jobs are what contribute to a company’s effectiveness (Mello, 2011, p. 115) and if they kept their employees it might have contributed to earlier success. It is human capital that helps companies to strive. For Apple, Inc. to lay off employees to help their financial statement for stakeholders may have been part of the cause of the problem (Yoffie...
Words: 1470 - Pages: 6
...COST CLASSIFICATION AND BEHAVIOUR. Cost: Reflects a monetary measure of the resources sacrificed or forgone to achieve a benefit such as acquiring a good or service. The term has multiple meanings: Different types of costs are used in different situations. Costs are developed and used for some specific purposes. The way a cost is used is to be used will define the way it should be computed. Cost Object: Any activity for which a separate measurement of cost is required. Something for which we want to compute a cost e.g. Product Product Line Department Division Geographical Area Cost unit: Unit of Production / service in relation to which cost are ascertained the unit is what is most relevant for the activity of the organization. Cost Centre: A production or service / location, function, activity or item of equipment for which costs are accumulated. i) ii) iii) Cost Classification. Costs can be classified as Direct or Indirect i) ii) By Function iii) Fixed, variable or mixed (discussed under cost behavior) DIRECT OR INDIRECT: i) Direct Cost (Manufacturing Cost). Those that can be specifically and exclusively identified with a particular cost object. These costs comprises Direct Materials Direct Labour Direct Expenses N.B. Sometimes direct costs are treated as indirect because tracing them to the cost object directly is not cost effective. E.g the cost screws in a car. ii) Indirect Cost (Overheads). Cost of a resource acquired to be used by more than one cost object...
Words: 2018 - Pages: 9
...Introduction The IMF is an intergovernmental institution established by an international treaty in 1945 to create a framework for international economic cooperation focusing on balance of payment problems and the stability of currencies. IMF headquarters is in Washington D.C, U.S.A History / establishment of IMF: IMF was founded on 27th December, 1945. During the closing years of world war second, different countries realized that there must be a common International Forum for achieving economy cooperation, promoting International Trade and providing help to needy nations during emergency. So IMF was formed for this purpose. World War Second has its adverse effect on global economy. To remedy the situation, an international monetary conference was convened in 1944, at Bretton Woods in America. It was attended by the representatives of 44 countries. It was decided in this Conference to set up IMF for the economic development of all countries. Problems: Three main problems are: ▪ Economic order and piece ▪ Reconstruction of economies ▪ Stable world piece Role: The IMF was intended to play two major roles in the Bretton Woods System: o The fund should discourage aggressive exchange rate behavior by members and help them manage their balance of payments efficiently; o The fund was given resources to lend international reserves to countries with balance of payments difficulties. Purposes/ objectives The purposes...
Words: 5009 - Pages: 21
...Introduction At Toy World Inc., President Jack McClintock is considering the adoption of a level monthly production plan for the coming year. The manufacturer of children’s plastic toys currently employs a production plan that follows the seasonality of sales. In considering whether to implement a level monthly production schedule, we compared the benefits and costs of both methods in relation to the financial and operational needs of the business. This allowed for an in-depth analysis of the savings allowed by a level monthly production schedule, and the impact of such a system on timing, cash flow and risk. As a toy manufacturer, Mr. McClintock’s company would face unique risks under the proposed system of production. These risks were compared to those accepted under a seasonal production schedule. By completing this analysis, we determined that Toy World Inc. would benefit the most from maintaining a seasonal production system. However, since a level monthly production plan would result in cost savings for the company, we have presented options through which Mr. McClintock can manage the financial implications of this schedule. Benefits of Level Monthly Production Mr. McClintock can expect to see savings of $490,000 in labour costs under this production system. These savings would be reflected in a lower cost of goods sold (70% of sales to 65.1%). A level monthly production plan allows the removal of overtime wage premiums in peak seasons, resulting in savings of $225...
Words: 1386 - Pages: 6
