Financial Terms Worksheet Essay

Understanding health care financial terms is a prerequisite for both academic and professional success. This assignment is intended to ensure you understand some of the basic terms used in this course. Complete the worksheet below according to the following guidelines: In the space provided, write each term’s definition as used in health care management. You must define the term in your own words. In the space provided after each term’s definition, summarize a health care management scenario that illustrates the importance of the skill, concept, procedure, or tool to which the term refers. In the scenario, you may wish to consider the following: Why the skill, concept, procedure, or tool is necessary for accurate record keeping, operational efficiency, excellent patient services, employee management, regulatory compliance, reducing costs, forecasting, and so forth Successes enabled by an adequate understanding or appropriate application of the skill, concept, procedure, or tool Risks or failures associated with an inadequate understanding or inappropriate application of the skill, concept, procedure, or tool Save the completed worksheet as a Microsoft ® Word document with your name in the file name. Submit the file to your instructor. Worksheet Submitted By: Keila Quintanila [Type your name here.] Term Definition Scenario Balance sheet A fiscal statement that summarizes a company’s assets, liabilities, shareholders’ equity at a specific point in time and net worth. This statement will display if the organization is in good fiscal standing or not and if they can meet their long-term fiscal responsibilities. The director asked for the titles of the four financial statements that included in an audited financial report, which are the following: Balance Sheet statement, Income Statement, Statement of Cash Flows, Statement of Fund Balance or Net Worth or Equity statement. Statement of revenue and expense A statement summarizes amount of profit earned minus the amount of operating expense. The statement will indicate the difference as profit or loss. The health care manager purchased some medical equipment, in which he will enter in the statement of revenue and expense; the document will show the amount of profit earned and the minus amount of operating expenses. This will clearly shows the difference as profit or loss. Revenue cycle The revenue cycle starts with meeting of customers, following any transactions during the period of transactions and continues with a  company/customer association. The salesman has brought revenue into the company. Furthermore, the salesman describe that, the Revenue Cycle beings with meeting with customers, presenting the product and closing the sale during specific time; but more important is to have a continues business relationship with company and customers. Payer mix Medical practice: Medicaid, Medicare, indemnity insurance, managed care–of monies received by a medical practice Medical organizations predict third party payer mixes so that they can precisely predict their profits for the coming term. Revenue The amount of currency that a company essentially receives during a specific period, including discounts and deductions for returned products. It is the â€Å"top line† or â€Å"gross income† figure from which costs are subtracted to define net income. The medical organization, revenue is the money received from insurance companies, payer mix that brings in from the rendered services. The medical organization usually calculates and report revenue for a quarter or a year. References Baker, J. J., & Baker, R. W. (2011). Health care finance: Basic tools for nonfinancial managers (3rd ed.). Sudbury, MA: Jones & Bartlett Publishers.