Operating and Financial Performance Indicators

Health care leaders depend on sound operating and financial performance indicators to make decisions regarding working capital management, capital budgeting, and resource allocation. These indicators help organizations maximize performance and strategically plan for new initiatives. For this Discussion, you select a health care organization and examine how its leaders and managers use operating and financial performance indicators in their decision making.

To prepare:

• Select a health care organization and locate its operating (i.e., utilization rate) and financial data. You may want to use a not-for-profit health care system, as they usually post their annual reports online.
• Identify one operating indicator (e.g., length of stay, admission, etc.) and two financial performance indicators (e.g., cash and cash equivalents, accounts receivable, accounts payable, short-term loans, etc.).

Identify the health care organization you selected, and describe one operating indicator and two financial performance indicators of the organization. Analyze how leaders and managers use these indicators when making decisions about working capital management, capital budgeting, and resource allocation. Support your response by identifying and explaining key points and/or examples presented in the Learning Resources.

Required Readings

Walston, S. L. (2014). Strategic healthcare management: Planning and execution. Chicago, IL: Health Administration Press.

• Chapter 4, “Growth and Integration Strategies” (pp. 73–94)
• Chapter 5, “Strategic Alliances” (pp. 99–114)
• Chapter 9, “Strategic Financial Analysis” (pp. 201–226)

Wayland, M. S., & McDonald, W. G. (2016). Strategic analysis for healthcare: Concepts and practical applications. Chicago, IL: Health Administration Press.

• Chapter 11, “Financial Statement and Ratio Analysis” (pp. 73–77)
• Chapter 26, “Financial Fit Assessment and Projection” (pp. 173–176)

Agundu, P., & Imegi, J. C. (2014). Domestic debt and strategic financial management imperatives in Nigeria: Casual diagnosis. Journal of Financial Management & Analysis, 27(1), 41–53.

Note: Retrieved from Walden Library databases.

Ciobota, G., & Velea, A. (2015). The strategic positioning of the financial banking companies—Key factor for achieving competitive advantages. Knowledge Horizons, 7(1), 103–106.

Note: Retrieved from Walden Library databases.

Food and Agriculture Organization of the United Nations. (1997). Chapter 6 – Investment decisions – Capital budgeting. Retrieved from http://www.fao.org/docrep/W4343E/w4343e07.htm

Gopal, S., & Kumar, D. M. (2015). Strategic interventions in tackling poor performance of service departments: Study on Muhibbah engineering. Journal of Economics and Behavioral Studies, 7(4), 6–13. Retrieved from http://www.ifrnd.org/Research%20Papers/J7(4)1.pdf

Karadag, H. (2015). Financial management challenges in small and medium-sized enterprises: A strategic management approach. Emerging Markets Journal, 5(1), 26–40.

Note: Retrieved from Walden Library databases.

Maneval, E. (2015). Working capital management. Retrieved from http://www.studyfinance.com/lessons/workcap/