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Healthcare financial
management
Objectives
Describe different forms of business organizations and
ownership
Describe the basic concepts of financial accounting
Describe the components of an income statement (IS):
revenues, expenses, and net income
Explain the relationships within and between the IS
components
Describe a Balance sheet and it’s formula and entries
Forms of healthcare organizations and
ownership
For profit organizations or investor owned corporations
Investors are owners by owning shares
Company earnings are paid to shareholders (stockholders) as dividends depending
on number of shares owned
E.g. Evans Sunrise Nursing home
Not-for-profit including faith based organizations (FBOs)
These entities like FP can only sustain themselves by making profits.
They are however exempt from taxation since earning are not distributed among
the stakeholders but reinvested in the company. No dividends are paid out
The public gain overrides private gain
E.g. The Aga Khan Hospitals, Mater Misericordia, Nairobi Hospital, War Memorial
hospital etc.
Ownership legal entities
Source: Gapenski
Sole proprietorship
E.g. an individually owned medical p...