2. What are some of the differences in sources of capital between not-for-profit organizations and for-profit organizations?
In not for profit organizations, the initial working capital may come from the community, philanthropy, or religious order through tax-exempt bonds. Not for profit organizations are often restricted by the philanthropist who provided it or by bond issuers. In for profit organizations, the initial working capital comes from the sale of stock. They have greater access to working capital through stock markets and also have flexibility in using stock transactions. …show more content…
What is the main objective of managing cash flows? What are the reasons an organization should have cash on hand?
The main objective for managing cash flow is to always have the right amount of cash on hand by increasing and expediting cash inflow and decreasing and delaying cash outflows. Reasons why an organization should have cash on hand are because they need money to pay employees, suppliers, emergencies and other unplanned events. Another reason to have cash on hand is because there may be an offer to good to pass up.
5. Explain why healthcare organizations use present value of money and future value of money for their investments.
Healthcare organizations use present value as a way to know the current value of an investment. The future value of an investment is an investment that generates a greater rate of return, taking into account factors such as interest rate, time, and the frequency of compounding.
6. Why do organizations need to perform a financial analysis? Explain each of the steps