After your reading answer the following Title: Healthcare Finance Edition: 6th (2016) Author: Gapenski Publisher: Health Administration Press Book ISBN: 978-1567937411 Working Capital Challenges Healthcare organizations strive to manage working capital in such a way that they can reliably cover their short-term expenses while also getting the best possible benefits from their capital. In managing working capital, healthcare organizations face some common challenges, as well as other challenges that are particular to the institution. What challenges would a for-profit facility that has a constant stream of revenue face in managing its capital? How would these challenges differ from a military hospital that is given its funding at the beginning of the year? In two separate paragraph give your personal opinion to Michele Mcgrory and Crystal Moore Crystal Moore Working capital is traditionally known as defining a business’s current assets. In today’s society it is known in two forms gross working and net working capital. Gross working capital determines current assets while net working capital determines current assets minus current liabilities. (Gapenski, 2016) Cash, float and revenue cycle management are a few challenges I chose to discuss regarding the challenges of for-profit organizations. For-profit organizations should minimize the amount of cash held due largely in part that cash is a non-earning asset. Float on the other hand refers to a business’s bank balance compared to the checkbook balance. It is beneficial that the bank balance is always greater than the amount shown on its checkbook so that it has a positive disbursement float . When it comes to revenue cycle management it is important to monitor payments for services rendered. If these payments are not collected it would be a major financial loss to the business. When comparing military hospital funding to for-profit organizations, an article I researched proved that between 2011 and 2012 the military spent over half of all federal discretionary spending of which about 9.5% of the base defense budget is spent on military health. It is estimated that $520 billion a year is spent on Medicare, $450 billion a year on Medicaid, and $300 billion a year on the employer health insurance tax deduction. Yet there is $100 billion spent in annual military health spending. (Roy, 2012) For-profit organizations do not have the chance to overuse their spending budget because if they did, the business would collapse. Due to the government providing financial assistance to the military, they are less likely to fail if they overspend on health care. I consider the government funding sort of as a safety net when funds have become exhausted. We need to do better to put spending limits and caps on healthcare spending for one day the funds could very well run dry. References: Gapenski, L. C., & Reiter, K. L. (2016). Healthcare finance: an introduction to accounting & financial management . Chicago, IL: Health Administration Press. Roy, A. (2012, March 15). How Health-Care Spending Strains the U.S. Military. Retrieved November 19, 2019, from https://www.forbes.com/sites/aroy/2012/03/12/how-health-care-spending-strains-the-u-s-military/#27d5c1432c54. Michele Mcgrory Working capital is defined as the current assets of a business, minus the current liabilities. A companys assets are cash, accounts receivable (customers unpaid bills) and inventories of raw materials and finished goods, and its current liabilities are accounts payable (Kenton, 2019). If an organizations current assets exceed its current liabilities, also known as positive working capital, the organization will grow. Otherwise, the organization will have trouble making payments and could potentially go bankrupt. Current assets listed on a company’s balance sheet include cash, accounts receivable, inventory and other assets that are expected to be liquidated or turned into cash in less than one year. Current li…
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