This week you will learn about ratio analysis. A company’s profit margin is a ratio value calculated by dividing its net income by its sales. The result is a value that suggests how much of a company’s total sales become profit which is very desirable. Specifically you will: calculate expenses and revenue for healthcare products and services. You will also calculate return on investment and analyze financial impacts for products and services.
You will work on an assignment that includes your Healthcare Budget Request started last week. This is due at the end of this week (4). Then you will create a brief (1- to 2-page) description of your analysis that clearly describes the estimated financial impact of your proposed idea. Interpret the results by explaining what your ROI calculation means to the organization. Healthcare Budget Request Estimating Expenses
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American Nurses Association. (2015). Code of ethics for nurses with interpretive statements. Retrieved from https://www.nursingworld.org/coe-view-only
Note: Review all, with special attention on “Provision 6” (pp. 23–26).
Kelly, P., & Porr, C., (2018). Ethical nursing care versus cost containment: Considerations to enhance RN practice. OJIN: The Online Journal of Issues in Nursing, 23(1), Manuscript 6. doi:10.3912/OJIN.Vol23No01Man06. Retrieved from http://ojin.nursingworld.org/MainMenuCategories/ANAMarketplace/ANAPeriodicals/OJIN/TableofContents/Vol-23-2018/No1-Jan-2018/Ethical-Nursing-Cost-Containment.html
Milliken, A., (2018). Ethical awareness: What it is and why It matters. OJIN: The Online Journal of Issues in Nursing, 23(1). doi:10.3912/OJIN.Vol23No01Man01. Retrieved from http://ojin.nursingworld.org/MainMenuCategories/ANAMarketplace/ANAPeriodicals/OJIN/TableofContents/Vol-23-2018/No1-Jan-2018/Ethical-Awareness.html
Reflect on the healthcare product or service solution you have proposed for your healthcare organization. Consider expenses (including any capital expenditures) that will be required to implement your product or service.
Reflect on the estimated revenues (if any) that your proposed solution will generate.
Reflect on the need for financing to meet the estimated expenses associated with your idea.
For each of the above, consult with your internal financial counselor as needed.
The Assignment: Estimating Expenses
Conduct an analysis of estimated expenses and revenues associated with your product or service idea by completing the following:
Part 1: Expense/Revenue/ROI Analysis:
Open your Healthcare Budget Request workbook that you created in Week 2, and navigate to the “Estimated Expenses” worksheet. Using the Healthcare Budget Request Workbook Step-by-Step Guide for guidance, create a worksheet that records the following:
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Each of the estimated expenses associated with your proposed idea, including startup expenses. Be sure to label each appropriately, with enough description to make it clear what the item is and what the estimated cost involves. Healthcare Budget Request Estimating Expenses
Each of the estimated revenues associated with your proposed idea. Be sure to label each appropriately, with enough description to make it clear what the item is and any necessary details regarding sources of revenues (including reimbursements).
Calculate the total estimated expenses and revenues for the next 5-year period.
Calculate the Return on Investment (ROI) for your proposed idea.
NOTE: You will copy your worksheet and analysis onto the Healthcare Budget Request Template (Word document) for submission.
Part 2: Summary of Analysis and Interpretation of Results:
Create a brief (1- to 2-page) description of your analysis that clearly describes the estimated financial impact of your proposed idea. Interpret the results by explaining what your ROI calculation means to the organization. Healthcare Budget Request Estimating Expenses