Cash and Working Capital Essay

1. What ar four general phases of the working capital cycle? Four general phases of working cycle area. Purchasing of resources relates to the acquisition of supplies and labor, much(prenominal) as the level of inventory necessary to maintain realistic production schedules and the staff required to ensure adequate provision of advantages. b. Production/sale of service health care services, no inventory. c. Billing refers to the release or discharge of a patient and the generation of a bill. d. Collection the generation of a bill and the true collection of the cash from the patient or the patients third-party payer.2. What are the three primary sources of short-term notes?Three primary sources of short-term funds area. Single-payment loan a loan that requires the payment repaid at the end of its duration instead of in monthly installments.b. Line of identification agreement that permits a smashed to borrow up to a specified limit during a defined loan period.c. Revolving credit agreement similar to a line of credit except that it is usually for a period longer than 1 year.Look morenon normal cash springs essay3. An organizations short-term investment options for idle cash include what four areas? List and provide their characteristicsa. Short-term working capital needs a business needs funds to plow the standard and usual expenses associated with the operation of the company. It is safe to assume that most healthcare firms should carry approximately 20 days of expected cash transactions at any point in time to meet normal short-term working capital needs for cash. However, it is not safe to say that a not-for-profit healthcare firm would need only 20 days of cash.b. Capital investment needs a non-profit healthcare organization needs funds to finance reclamation and renovation of existing capital assets as well as investment in new product and service line areas. Different from taxable firm and investor-owned healthcare firm, the organization must rout inely set aside funds for replacement and the amount of money reserved depends on percentageof debt financing to be used and projected future levels of capital expenditures.c. Contingencies a business needs funds to handle unexpected demands for cash flow, also called contingency funds. The amount of money reserved reflects the companys tolerance of risk.d. Supplement Operating Earnings non-profit healthcare organization needs funds to provide a dependable flow of investment earnings that contribute be used to supplement expected weaknesses in operating earnings. This helps to prevent significant deterioration and weak operating rim in operating earnings.4. Discuss the term float.Float is a brief moment in the banking system where money is counted twice due to delays in impact checks. When a check is deposited, the bank credits a customers account and that is when float is created. However, it could take a couple of days for the check to be received and clear by the payers bank. During this floating time, the amount on the check appears in both the payee and payers account. Also, float can be available shares in a company for trading. These shares are making available to the general public for trading and the company is not liable for how the shares are being traded.ReferencesCleverley, W.O., Cleverley, J.O., Song, H.S. (2011). Essentials of Healthcare Finance (7th Edition). Sudbury, MA Jones & Bartlett Learning. (n.d.). Retrieved from http//www.investopedia.com/terms/w/workingcapital.asp (n.d.). Retrieved from http//www.investopedia.com/terms/c/capital-investment.asp Tatum, M. (2003). What is short-term working capital?. In B. Harris (Ed.), Copyright saved 2003-2014 Conjecture Corporation.