HCA312 Week 4 Assignment: Comparative Data

HCA312 Week 4 Assignment
Comparative Data
Prior to beginning this assignment, review Chapter 14 and 15 in the course textbook, Health
Care Finance: Basic Tools for the Nonfinancial Managers, 5th edition. These two chapters will
assist you in responding accurately to the questions in the table.
Instructions:
Complete the following table by writing detailed and thorough responses to the questions.
Provide examples where indicated. Once the document template is completed, you should have
at least two pages. APA formatted citations and references are required. Cite the sources per in
the narrative and list the reference in the last box of the table.
What is meant
by common
sizing?
Provide an
example:
Common sizing is the process which is used to convert the dollar amount into the terms
of the percentages. The method of the common sizing is to keep the comparison at the
same base level. In simpler terms it is also known as the Vertical analysis.
For example if the current liabilities of the X hospital is $200000 and the long term debt
is $400000 which equals to the total liabilities of $600000 than current liabilities are 33%
and the long term debt is 67% (Drummond, et al 2015).

What is meant
by Trend
Analysis?
Provide an
example:
Under the mechanism of the trend analysis there is a comparison of the figures over the
several time period. The only difference between common sizing and the trend analysis
is that the comparison is across time. Trend Analysis is nothing but the horizontal
analysis in the financial terms (Cleverley & Cleverley, 2017).
For example if the current liabilities of the X hospital are $500000 in the current year and
the long term debt is $500000, the total liabilities amount to $1000000. The difference
between the previous year and the current year is $300000/$200000 equals to 150%
change in the current debt in terms of the previous year.
What is the
difference
between
forecasting and
projecting?
Forecasting and Projecting are the methods used in analysis of the financial statements.
Though both are prospective in nature yet there are certain differences between the
forecasting and the projecting which are as follows.
Forecasts are formed on the basis of the assumptions and Projections are the ideas
relating to the future.
Forecasts reflect actions which are going to occur in future while the projections assist in
future events (Drummond, et al 2015).
What are the
three common
types of
forecasts in a
Healthcare
Organization?
The most common types of the forecasts utilized in the healthcare sector are the revenue
forecast, staffing forecast and operating expense forecast (Cleverley & Cleverley, 2017).
Name the three
criteria that must
be met for true
Comparability is met only when the three important criteria are met. The three criteria
are consistency, verification and unit measurement.