There are more and more health care organizations operating as private organizations owned by shareholders. Shareholders...

There are more and more health care organizations operating as private organizations owned by shareholders. Shareholders traditionally invest in organizations to maximize their wealth. Other than a clash with the goals of management, what other potential issues in terms of their financial management would you foresee?

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Expert Solution

The following potential issues which required to foresee financial management:

Financial ratios such as

(a)whether current ratio of the company is increasing or decreasing. Current ratio indicates whether organisation is able to make payment of short term debts.

(b) Whether Net profit margin of the company is increasing or decreasing. In case profit margin is increasing constantly. It shows the better growth of the company.

(c) Return on investment: It indicates return to investors in respect of investment. Most of shareholders are concerned with dividend income in respect of investment made.Increase in ratio indicates better finance.

Future Plans:

Shareholder must assess whether any decision taken by boards of directors will impact on share price of company such as intention to merge or acquire or disposal of organisation or introduction of new products.

jeff jeffy answered 1 year ago

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