Healthcare Policy and Finance

Financial Statement Analysis

Financial statement analysis is a method of assessing and reviewing a company’s performance and position. This procedure is used by stakeholders, management, investors, or customers to evaluate a company’s financial statements, such as the income statement, balance sheet, or statement of cash flows (Wendt, 2015). The application of financial statement analysis is carried out when shareholders wish to make effective decision making. While making a vital choice, the process is critical since it provides an in-depth examination of the company’s existing earnings or losses, thereby providing a future plan of direction for the organization. Therefore, this method of analysis has proved to be essential in making decisions that affect a company.

Operational Analysis

On the other hand, an operational analysis is the process of conducting a feasibility analysis company with an aim of identifying opportunities for improvement and maximization of resources (Wendt, 2015). In this process, a manager examines the means that the company will use to exchange value with their customers. Conducting an operational analysis also focuses on the availability of resources and the required inputs to conduct the business activities. An example where an operational analysis is conducted in a company is in the event where a business plans to venture into a certain industry. For instance, the health sector is a high cost industry and requires intensive capital and other resources to enter the industry. Therefore, a company may conduct an operational analysis to know the kind of resources required to start and continue operating in that industry.

Part 2

Throughout the course, the study of health care finance has provided an insight of the internal operations that occur in organizations and how they manage their finances. An interesting part of this study is when learning the importance of conducting a feasibility study, which assists the health care organizations in knowing their capital and the resources required in starting and maintaining its business activities. The challenging part of this course is the technicality involved and the processes incurred in accounting for profits and losses of a company. Throughout the course, there is no clear provision for the analysis and calculation of payment of workers in an organization and thus an improvement in this area would be essential.

References

Wendt, C. (2015). Healthcare Policy and Finance. The Palgrave International Handbook of Healthcare Policy and Governance, 54-68. doi:10.1057/9781137384935_4