Budget Project Assignment Instructions

Budget Project Assignment Instructions


The student will complete a project involving the creation of a budget. Specific budgets to be produced and other requirements may be found in Blackboard.


Complete each part of thefollowing Case Study. You will need to use Microsoft Word and Excel. Tables referenced in the case study are located in the Excel file labeled “Case Study Tables”. Label your written responses by part number. For example, your memo for Part 1 must be labeled Part 1 as a level 1 heading, then proceed with your memo, and then a new level 1 heading Part 2, followed by answers to those questions. A title page must be included in your submission. Analysis must be supported with scholarly, peer-reviewed journal articles (5 or more) as well as include Biblical integration.


Financial Management

Part 1       Financial Statement Analysis

The loan committee of a major bank needs a financial assessment. Analyze the financial statement for (your instructor will provide the company name). Download the financial statements into Microsoft Excel and then use horizontal statement analysis as well as financial ratios to assess the organization’s liquidity, profitability, financial efficiency (turnover), and capital/debt structure. Based on your assessment, present a 2–4-page memo that describes the financial strengths and weaknesses of the organization as of their most recent year-end. Your memo must indicate the maximum loan amount that should be authorized.

Part 2           Budget Analysis

Table 1 includes PCS’s proposed budget for 2018. Using this as a basis, develop a revenue and expenses budget for each PCS center. Note that professional reading fees and laboratory expenses are variable costs that need to be allocated based on the type of visit. Generally, an occupational health visit (Categories 8 and 9 on Tables 2 and 3) including all physicals has reading and laboratory costs 1.4 times what a general medical visit incurs (Category 1, 2, or 3). For each line item in the budget, indicate whether the item is a fixed or variable expense and the basis of allocation or assignment for the budget for each center. Each center is expected to generate approximately the same profit margin. Given your analysis, will it? Should management change its expectations regarding average revenue per visit by center?

Part 3         Monthly Cash Budget

Table 4 includes the 2018 budget for Jasper Gardens Nursing Home. For your monthly cash budget, assume that one-twelfth of cash expenses and revenues are incurred per month. Use the following aging analysis to estimate cash inflows. What are the management implications of this analysis?

Table III.4 Aging Analysis

Percent of Bills Paid in Cash Within                  days of Billing

Days30 or less31–6061–9091–120121–150
Private Insurance303030100

Assume that Accounts Receivable – Net as of December 31, 2017, are the same percentage as anticipated revenue to be earned during 2018.

Part 4           Webster Hospital—Long-Term Debt Financial Analysis

OHA has indicated that we should maintain a debt to asset ratio no higher than 40 percent. Given this, how much additional long-term debt could have been added in 2017? We would use this additional debt to finance new construction, renovations, and the acquisition of technology. To finance this additional long-term debt we would use bonds. As such, we need to assess our credit worthiness. The following are the select median values for specific financial ratios for hospitals that received “below investment grade (BBB)” and “high investment grade (AA)” bond ratings.

Assess and report Webster’s position with recommendations. Are Webster’s bonds more likely to be rated as AA or BBB? Why?

Table III.5

Comparison of Financial Ratios by Bond Rating

Bond Grade   Days Cash on HandAA   194BBB   53.6
Days in Accounts Receivables58.047.7
Days in Current Liabilities62.364.7
Cash to Debt (%)153.937.9
Total Margin-%4.1(0.3)
Salaries and benefit costs as  

% of Total Revenue49.956.3
Average Age of Plant (years)9.513.4
Capital Expenditures as % of Depreciation Expense  169.9  76.2

Our annual interest cost of long-term borrowing would be 3.0 percent if our bonds were rated “high grade” and 7.5 percent if rated “below investment grade.” Assume that ten- year bonds are used to finance this additional debt. What would be the annual principal and interest payment for this amount? Can Webster Hospital afford this increased annual expense? Note that for every $100,000 borrowed over ten years, our monthly payments would be $989 at 3.5 percent or $1,136 at 6.5 percent.

Part 5        Surgery for Middleboro

As you are aware, Medical Associates has achieved its targeted utilization and financial projections for ambulatory surgery in Jasper. It is now time to consider a similar service at our offices in Middleboro. The physical facilities needed for ambulatory surgery will cost $450,000. Our cost of capital is 4 percent and the hurdle rate is 6 percent. The anticipated salvage value of these new fixed assets will be $150,000 after five years. To do this we will need to recruit two new general surgeons for our Jasper office, thereby freeing our Middleboro general surgeons to work in this new ambulatory surgical facility. We anticipate opening no earlier than January 2, 2016

Based on operational estimates, we anticipate that this project’s annual operational revenue will exceed its operational expenses (R-E) for each of the first five years in accordance with the following schedule. Note that the operational expenses include all direct costs including salaries and benefits.

Table III.6

Fiscal Implications of New Ambulatory Surgery Service

R-E ($) Median Cases per Day (M–F)

Year 0120,0009.0
Year 0240,00010.0
Year 0360,00012.5
Year 04100,00012.5
Year 05140,00014.0

We estimate that this unit, employing the standard RVU system used in hospitals, will generate 1.1 surgical procedures per case. Assess the financial implication. Should we do this? Why?

Part 6 Hospital Discounts

A coalition of key area employers has approached MCH or WH demanding an additional 10 percent discount per patient day for all of their employees admitted to the hospital. If not offered, they will change their health insurance to favor the one hospital in Middleboro with the lowest prices. What would be the implications of such a change? Structure the analysis that would be undertaken to respond to this demand.

Part 7 Medicaid Expansion

The state legislature and governor have just rejected additional Federal funding for Medicaid expansion. Assess the financial impact of this decision on MCH or WH.

Part 8 New Primary Care Practices in Jasper

Determine the costs to MCH of establishing two new primary care practices in Jasper. The analysis should include estimates of all costs (recruitment, compensation arrangements, facility, staffing, information technology, etc.) and assess the advantages and disadvantages of leasing or purchasing building space.

Submit this assignment via SafeAssign by 11:59 p.m. (ET) on Sunday of Module/Week 7.

Note: Your assignment will be checked for originality via the SafeAssign plagiarism tool.

Research Paper 101
Calculate your paper price
Pages (550 words)
Approximate price: -

Reasons to trust Research Paper 101

On Time Delivery

We pride ourselves in meeting the deadlines of our customers. We take your order, assign a writer but allow some more time for ourselves to edit the paper before delivering to you. You are guaranteed a flawless paper on a timely manner...

24x7 Customer Live Support

Our team at Research Paper 101 is committed to handling your paper according to the specfications and are available 24*7 for communication. Whenever you need a quick help, you can talk to our writers via the system messaging or contact support via live chat and we will deliver your message instantly.

Experienced Subject Experts

Online Experts from Research Paper 101 are qualified both academically and in their experiences. Many are Masters and Phd holders and therefore, are qualified to handle complex assignments that require critical thinking and analyses...

Customer Satisfaction

We offer dissertation papers as per students’ wishes. We also help craft out the best topics and design concept papers. By ordering with us, you are guaranteed of defending and making through those hard faced professors in the defense panel!

100% Plagiarism Free

We at Research Paper 101 take plagiarism as a serious offence. From the start, we train our writers to write all their papers from scratch. We also check if the papers have been cited appropriately. Our website also has a tool designed to check for plagiarism that has been made erroniusly. In essense, the paper you get will be 100% legit...

Affordable Prices

We understand that being a student is very challenging, some students balance between work and studies in order to survive. We therefore offer pocket friendly rates that are very competitive in the market.

Try it now!

Calculate the price of your order

Total price:

How it works?

Follow these simple steps to get your paper done

Place your order

Fill in the order form and provide all details of your assignment.

Proceed with the payment

Choose the payment system that suits you most.

Receive the final file

Once your paper is ready, we will email it to you.

Our Services

No need to work on your paper at night. Sleep tight, we will cover your back. We offer all kinds of writing services.


Essay Writing Service

No matter what kind of academic paper you need and how urgent you need it, you are welcome to choose your academic level and the type of your paper at an affordable price. We take care of all your paper needs and give a 24/7 customer care support system.


Admission Essays & Business Writing Help

An admission essay is an essay or other written statement by a candidate, often a potential student enrolling in a college, university, or graduate school. You can be rest assurred that through our service we will write the best admission essay for you.


Editing Support

Our academic writers and editors make the necessary changes to your paper so that it is polished. We also format your document by correctly quoting the sources and creating reference lists in the formats APA, Harvard, MLA, Chicago / Turabian.


Revision Support

If you think your paper could be improved, you can request a review. In this case, your paper will be checked by the writer or assigned to an editor. You can use this option as many times as you see fit. This is free because we want you to be completely satisfied with the service offered.