Part I: Calculating Working Capital
Locate and select financial statements for a particular health care organization. Analyze the working capital of the organization.
Consider the impact of regulations, business plans, and economic dynamics on the working capital requirements of the business. Is there sufficient working capital for business operations of the organization you selected?
Part II: Calculating Variance Analysis
Instructions:
The following are budgeted and actual revenues and expenses for a hospital.
Budgeted Actual
Revenues
Surgical Volume 2,300 2,600
Gift Shop Revenues $18,000 $19,000
Surgery Revenues $589,500 $852,750
Parking Revenues $17,000 $19,000
Expenses
Patients Days 26,000 25,000
Pharmacy $119,000 $158,000
Misc Supplies $68,000 $795,600
Fixed Overhead Costs $832,000 $890,000
Using an Excel spreadsheet to show your calculations:
1. Determine the total variance between the planned and actual budgets for Surgical Volume.State the variance for all values as favorable or unfavorable.
2. Determine the total variance between the planned and actual budgets for Patient Days.State the variance for all values as favorable or unfavorable.
3. Determine the service-related variance for Surgical Volume.
4. Determine the service-related variance for Patient Days.
5. Prepare a flexible budget estimate. Present aside-by-side budget, flexible budget estimate, and the actual Surgical Revenues.
6. Prepare a flexible budget estimate. Present aside-by-side budget, flexible budget estimate, and the actual Patient Expenses.
7. Determine what variances are due to change in volume and what variances are due to change in rates.
Attachment:- Variance Analysis.rar