Question

Review the four financial statements discussed in Chapter 1. Then answer the following questions in your initial response:

• Choose one of the financial statements you reviewed and explain its purpose.
• Explain what type of information can be derived from the financial statement you chose.
• What do you think is the major purpose of all financial statements?
• What is the importance of accounting in a health care manager’s role? How will you use it in your health care career?

Word Count: 175- to 265-words. Use your own thoughts, experience and viewpoint of the readings. Do not copy from the internet.

APA Formatting: Use citations where appropriate and list references. All citations and references, if used, must be in APA format. Only 15% of the content can be source material. If you write in your own words, only the reference is required.

Answer 1

One of the financial statements that I have reviewed is “Income statement” and the purpose of Income statement is to determine if the company made or lost money during the period being reported. If a company has made profits it means it is making money otherwise losses will indicate that it is losing money.

The type of information that can be derived from income statement are information with regards to topline of the company (i.e. revenues), its margins like gross profit margin, operating margin and net income margin and its bottom-line (i.e. net income).

The major purpose of all financial statements is to ensure that a true and fair view of the financial position and health of the company is provided to different stakeholders like investors, creditors, loan providers like banks and financial institutions etc. By providing a true and fair view of the financial position and health of the company the company ensures that all stakeholders are able to make informed decisions.

Accounting plays a significant part in the role of a health care manager. A health care manager, by using and applying the concepts of accounting, in their operations are able to optimally plan their operations, exercise control with regards to costs, organize and direct its resources in a systematic manner and make decisions for sustainable growth levels. In my health care career I will use accounting to ensure that I am optimally managing the cash flow of my health care operations and this optimal management will lead to success on a sustainable basis in the long run.

(260 words)

References:

(1): The Role of Accounting in Health Care Management – Angie Walters (November 5, 2018 ), Goldin Peiser & Peiser, LLP

(2): The Importance of Accounting in The Healthcare Industry – (November 25, 2019) – Pearl Chartered Accountants