Finance for Managers

This report discusses the options available to Green acre hospice in terms of revenue enhancement. It assesses the preferred option for the hospital, analyzes the importance of different financial areas, evaluates non-financial considerations, and gives recommendations for the proposals available. The report emphasizes the role of both financial and non-financial factors in making profitable business decisions.

Finance for Managers
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Table of Contents
INTRODUCTION ...............................................................................................................................3
1. Assessing preferred option for the hospital by setting suitable parameters.................................3
2. Critically analyze the importance of different financial areas which hospital could consider for
decision making...............................................................................................................................3
3. Evaluating the options available to hospital on the basis of non-financial considerations .........4
4. Giving recommendations to hospital for the proposals available to it .......................................5
CONCLUSION ...................................................................................................................................5
REFERENCES.....................................................................................................................................6
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INTRODUCTION
In business organization, it is the responsibility of manager to take suitable business
decisions by evaluating all the options available to him. Moreover, growth and success of the
business unit is highly influenced by the profit generated by the firm from different proposals. The
present report is based in Greern-acre hospice which has availability of three projects in relation to
the revenue enhancement. In this, the present report will discuss the option which hospice need to
select on the basis of financial and non-financial aspects.
1. Assessing preferred option for the hospital by setting suitable parameters
On the basis of the cited case situation there are mainly three proposals which are available
to Hospice in relation to leasing, modernization and continue up with the existing contract (Weil
and Schipper 2013). By making analysis of all the options it has been identified that Green acre
Hospice should provide lease contract to Greasy Joe's which proves to be more beneficial for it.
Moreover, by selecting such option business unit will enjoy more financial benefits in terms of
£120,000. Moreover, if medical care unit offers leasing opportunity to Starbucks then it will get
only £115,000 which is lesser than other available opportunity (Tahir and Sabir 2015). There are
several parameters which are undertaken by Green acre hospice for the selection of proposal are
enumerated below: Cost and benefit relationship: Cost is one of the main factors which place high level of
impact on revenue generated by the firm. Thus, by considering such factor proposal in
relation to offering lease to Greasy Joe's has been selected by hospice.
 Availability of financial resources: Expansion and modernization decision of the business
organization is highly affected by the extent to which they have enough amount of financial
resources. Thus, due to the limited amount of financial resources hospice has decided
leasing option rather than modernize the cafe.
2. Critically analyse the importance of different financial areas which hospital could consider for
decision making
The current Evaluation is based on identifying the tastes and preferences of several factors which
needs to be taken into account. The current evaluation method is based on the demands of all the
customers of this cafe which gives emphasises on the qualitative aspects of the overall evaluation.
The current evaluation technique is totally different from the evaluation conducted by an entity by7
focusing on the financial areas. The evaluation conducted on the spreadsheets is based on the capital
budgeting technique which will consider the time value of money that helps in determining the
future capabilities of the investment applied by an entity by leasing land for the hospital. The
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current approach is the best suitable technique used by an entity as the needs and aspirations of all
kinds customers can predict in advance in order to sustain competitive advantage.
Financial areas imply for the aspects which are highly associated with the cost and revenue
of the firm (Purves and Niblock 2015). Cited case situation presents that in the recent times by
taking into account the demand of the customers cafe is running by Volunteers. In this, with the aim
to enhance revenue Green acre hospice has decided to make modifications in existing aspects. For
this, there are three options which are available to the care unit. In this regard, several financial
factors or elements has been followed by the trust are:
 On initial level, business unit needs to assess the fund which they require for the
implementation of different proposals. This in turn helps hospice in making evaluation of
the fund available within the business unit for various business projects or proposals.
 Further, investment decision have high level of impact on the financial position and
performance of the firm (Kajola and Adewumi 2015). Thus, before making investment
hospice needs to make analysis of the financial statements of firm. Through this, care unit
can make idea about the extent to which its financial position will be affected from different
proposals.
 Hospice need to take care about the qualitative and quantitative aspects by applying CVP
analysis which will also helps an entity in order to ascertain their current investment option.
 Hospice also needs to determine relationship between cost and profit aspect. This in turn
assists business unit in making idea about how much revenue will be generated by it over
expenses.
The current brand image of green-acre hospice will also play a significant role in an enterprise as
the good trade relations with the external suppliers will result into good agreement. The current
reputation of an entity is strong enough which may created difficulty for this entity in searching
accurate projects.
Green acre hospice has decided to give cafe on lease by taking into consideration all the above
factors. Moreover, in the option of lease to Greasy Joe's care unit has opportunity to earn more
revenue in comparison to other proposals. Thus, such option will make significant contribution in
the attainment of organizational and objectives.
3. Evaluating the options available to hospital on the basis of non-financial considerations
There are mainly three options that are available to Green acre hospice for the growth and
development aspects (Fields 2016). As per the case situation if business unit continues with the
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Volunteers then it does not get any kind of profit. However, it is to be critically evaluated that profit
maximization is one of the main objectives of firm behind carrying out every project. Thus, due to
the absence of profit margin hospital needs to avoid making investment in such project. Further, in
the second option medical care unit has opportunity to get enough money by giving land on lease to
either Starbucks or Greasy Joe's. The above discussion of assessing and evaluating the current
business performance of an entity will help an enterprise in making good business decisions for an
enterprise. Hence, on the basis of revenue level company has decided to give land on lease to
Greasy Joe's. Further, for the purpose of modernization medical care unit has to incur various
expenditure. However, on the critical note, business unit cannot implement the plan due to the
unavailability of financial resources (Weil and Schipper 2013). The efficiency of the option 2 is the
best suitable for an enterprise as this would be selected as it is helpful for the management for
taking land on a lease. In this, medical care unit also needs to give land on lease to Greasy Joe's
because it offers high level of revenue to it.
Non-financial considerations
There are various non-financial considerations which can be used by an entity in order to take up
new land which is taken on selecting leasing option which are given as follows:
Reliability of supplier- The decision of choosing new option in order to take up new business
project of taking land to be used for providing hospital services by expanding the existing business.
The efficiency of the external supplier can be assessed on several factors such as quantity required
by an entity and its quality required. The budget of an entity will be also affected as the prices of
higher of lower prices of land can change the behaviour of an entity.
Legal factors- The legal external factors needs to be considered as leasing a land for hospital
required permission of trustee of the hospital who will decide the business decisions. The laws and
regulations changes in the prices of land by imposing taxation on property will also affect the
decision of an entity. Feasibility: This aspect can be analysed by the firm via investment appraisal tools such as
NPV, payback period etc.
 Durability: During selection Green acre hospice also needs to consider period or timeliness.
Through this, care unit can identify the period through which specific project will offer
benefit to it.
4. Giving recommendations to hospital for the proposals available to it
 For the effectual evaluation of the project Green acre hospice should build a team of skilled
professionals who have ability to determine the suitability of project.
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 The viability of the project option 2 has been evaluated by applying two techniques such as
qualitative and quantitative which will help an entity in order to make further business
decisions. It has been found that option 2 will be selected after applying these two techniues
of ascertaining the demands of all kinds of customers and the application of capital
budgeting techniques. Further, it is advised to the care unit to employ the tools and
techniques for the purpose of financial analysis. Hence, by taking into account investment
appraisal tools care organization can assess the viability of project in an appropriate manner.
 Company can also make evaluation of project by taking assistance of agencies which offer
services in this regard (Wessels 2012). The doctors and external practitioners are appointed
in this entity in order to provide medical related services to offered different variety of
services which is regarded as outsourcing of services. Thus, outsourcing is also one of the
main sources which can be undertaken by the care unit for the selection of proposal.
CONCLUSION
By summing up this report, it has been concluded that Green acre can enhance its profit
margin to the significant level by offering land on lease to Greasy Joe's. It can also be revealed
from the report that both financial and non-financial factors make vital contribution in the profitable
business decisions.
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REFERENCES
Books and Journals
Fields, E., 2016. The essentials of finance and accounting for nonfinancial managers. AMACOM
Div American Mgmt Assn.
Purves, N., Niblock 2015. On the relationship between financial and non-financial factors: A case
study analysis of financial failure predictors of agribusiness firms in Australia. Agricultural
Finance Review. 75(2). pp.282-300.
Kajola, S. O., Adewumi 2015. Dividend pay-out policy and firm financial performance: evidence
from Nigerian listed non-financial firms. International Journal of Economics, Commerce and
Management. pp.1-12.
Tahir, S. H. and Sabir, H. M., 2015. Ownership structures as determinants of financial decisions:
evidence from Pakistani family owned listed firms. Zbornik radova Međimurskog veleučilišta
u Čakovcu. 6(1). pp.117-127.
Droms, W. G. and Wright, J. O., 2015. Finance and accounting for nonfinancial managers: All the
basics you need to know. Basic Books.
Weil, R. L. Schipper 2013. Financial accounting: an introduction to concepts, methods and uses.
Cengage Learning.
Wessels, K. J. 2012. Limits to detectability of land degradation by trend analysis of vegetation index
data.Remote sensing of Environment. 125. pp.10-22.
Online
Financial accounting tools 2016 Available through:<http://www.accountingtools.com/financial-
accounting-basics>[Accessed on 23rd August 2016].
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