Question

Functions and importance of short-term and long-term financial resources in health care

Answer 1

The short term financial resources are the resources which appears on the current assets and current liabilities. These are the resources or the obligations which needs to be taken care of within the operating cycle or one year. They are considered as the working capital of the company.these are required for the day to day working of the company. Some of the short term resources includes cash, accounts receivables, accounts payables, prepaid expenses. This is important in the health care as there are certain day to day operations for which working capital is required which can be provided by short term resources.

Long term financial resources are the resources that has the life of more than one year. Example: To acquire equipment and building, the health care might need financial help for which they can take loans which will be repaid in long time example: 5 years. With the long term resources the company is able to provide different health care services to the patients and are able to compete in the market.