Evaluating financial statements and using financial analysis methods is a critical part of the decision to make capital investments. The goal of capital management is to acquire and maintain sufficient working capital and assets. This helps an organization meet operating and expense obligations, while also keeping a sufficient cash flow. It is also a way to confirm that capital purchases and agreements are made with ethical standards. This part of your project will require you to complete two (2) article reviews and report on your findings. Then, you will apply your findings to how capital decisions can be made in your specific case; as well as comparing your viewpoint to the authors’ and recent ethical scandal. Keep in mind that you will use your article analysis to either support or disprove the purchase of an information system in the final portion of your project.
Submit a minimum 3-page report that:
- Discusses why is it more difficult for healthcare companies to get expansion financing in the today’s economic climate and financial issues with expansions.
- Describes why healthcare companies need to look beyond their banks to secure financing.
- Explains the importance of making a good case for expanding healthcare providers’ methods of calculating break-even analysis.
- Discuss non-financial factors do the authors believe need to be included in break-even analysis?
- Explain how current issues, such as the Affordable Care Act, affect break-even analysis.
- Summarizes the authors’ viewpoints and apply the concepts to your case. Also include a summary of your viewpoint in comparison to the authors’. Be sure to specifically address the methods that influence capital investments and decision-making; and explore methods of analyzing capital investments (Payback, Net Present Value, and Internal Rate of Return). This report will serve as your Capital Management section of your project.
- Analyze the key points of the Enron Scandal and specifically address how professionalism and ethics influence decision-making. How do unethical standards impact an organization’s performance and capital investments? Reference the concepts of embezzlement and losses. Explain how you maintain ethical standards in relation to Code of Ethics.
- Include an APA formatted reference page to include at least three (3) academic sources, such as a book or an academic scholarly journal, to support your topic. You should reference your academic sources by including at least three (3) in-text citations. You can use the articles outlined in the instructions, as well as information found on the Enron Scandal. Academic scholarly journals can be accessed through the Rasmussen Online Library.
Article Review #1
Read the article Expanding Credit Lines in Order to Expand which discusses the challenges related to expansion financing.
- Discuss why is it more difficult for healthcare companies to get expansion financing in the current economic situation?
- Explain the 2 major issues with the Caribbean expansion the turnaround company found and why do you think they were brought up?
- Describe why healthcare companies need to look beyond their banks to secure financing?
Article Review #2
Read the article The New Break-Even Analysis which looks at expanding how healthcare providers look at break-even analysis and includes some non-financial considerations.
- Do you think the authors make a good case for expanding healthcare providers’ methods of calculating break-even analysis? Why or Why Not?
- Discuss non-financial factors do the authors believe need to be included in break-even analysis?
- Explain how the Affordable Care Act affect break-even analysis?
Ethical Scandal
The ‘Enron Scandal’ involving acts of embezzlement is one of the most well-known financial, ethic scandals in modern day history. Perform a web search of the Enron Corporation Scandal to find more information.
Use the following websites on ethics to help support your course of action in upholding ethical standards.
Expert Solution Preview
Introduction:
As a medical professor responsible for designing and conducting lectures, evaluating student performance, and providing feedback through examinations and assignments, it is crucial to provide assignments that will help the students understand important concepts related to capital management and ethics. In this assignment, the students will be required to complete two article reviews related to the challenges of expansion financing in the healthcare industry, the importance of making a good case for expanding healthcare providers’ methods of calculating break-even analysis, and the impact of current issues such as the Affordable Care Act on break-even analysis. Furthermore, the students will explore the Enron Scandal and its effect on ethical standards in decision-making. This report will summarize the key points from the article reviews and the Enron Scandal and apply the concepts to a specific case.
Capital Management:
Expansion financing is becoming increasingly difficult for healthcare companies in the current economic climate due to a lack of available resources and higher interest rates. Healthcare companies may face financial challenges in expanding their operations, especially when their balance sheets are not strong enough to support additional borrowing. Additionally, healthcare companies may find it challenging to obtain expansion financing because their return on investment may not be as high as other industries, which may be more profitable.
When healthcare companies face difficulty in obtaining expansion financing, they need to look beyond their banks to secure financing. Healthcare companies could look into non-traditional financing options, such as venture capital or private equity, as well as search beyond their geographical areas for investors who may be willing to provide funding.
When it comes to expanding healthcare providers’ methods of calculating break-even analysis, it is important to make a robust case and focus on other key areas to show the business’s potential for growth. This may include providing detailed financial projections, an in-depth analysis of the market, and a comprehensive business plan.
Non-financial factors that need to be included in break-even analysis according to the authors of the article The New Break-Even Analysis include quality of care, patient satisfaction, and reputation management. In contrast, the Affordable Care Act has significantly impacted break-even analysis by introducing new regulations, policies, and payment structures. Healthcare providers must adjust their break-even analysis to accommodate these new regulations and requirements or risk losing out on patients and revenue.
Enron Scandal:
The Enron Scandal was a financial scandal that shook the business world in the early 2000s. The scandal was related to acts of embezzlement, unethical behavior, and the creation of false financial statements to mislead investors and regulators. The scandal resulted in not only the bankruptcy of one of the largest companies in the US but also caused thousands of employees to lose their jobs and left many investors with massive losses.
Professionalism and ethics are important considerations in decision-making, and unethical standards can significantly impact an organization’s performance and capital investments. In the case of the Enron Scandal, unethical behavior not only led to the downfall of Enron but also caused substantial losses for investors. Maintaining ethical standards is vital in establishing trust and credibility in organizational decision-making processes. Adhering to the Code of Ethics can help ensure that an organization is committed to high ethical standards and practices.
Conclusion:
In conclusion, evaluating financial statements and using financial analysis methods is a critical part of decision-making when making capital investments. It is becoming more difficult for healthcare companies to obtain expansion financing, but they can look beyond banks for non-traditional financing options. Furthermore, healthcare providers need to look at non-financial factors when calculating break-even analysis, and they must consider the impact of current issues such as the Affordable Care Act. The Enron Scandal is a clear example of the importance of professionalism and ethical practices in organizational decision-making, and it is crucial to maintain ethical standards in all aspects of organizational practices and the Code of Ethics.
