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Financial Management

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Details: Verybest Hospital must prepare its annual operating budget for all departments.

Group portion: Divide the budget sections among members and agree upon any necessary basics for a coordinated effort. Agree upon enough basics to divide the responsibility of each group member creating different department(s) budgets (for example, emergency room, pediatric unit, intensive care unit, facilities).
Summarize the budget for Verybest Hospital with an executive summary. Individual portion: Prepare the annual operating budget that is broken out by department. Make sure the budgets for each department are properly proportionate to the overall budget.

Objective: Describe the relationship between departmental and total facility budgets.

Solution Preview

The response addresses the queries posted in 987 words with references.
// Annual operating budget estimates the overall operating revenues and the expenses that will be incurred in the following year. Hospital's overall operating budget is a combination of different departmental budgets. In order to make a complete budget, we should first prepare the departmental operating budgets. A brief executive summary of the budgets is prepared like this: //

Executive Summary

The overall annual operating budget for the Very Best hospital includes different departmental budgets. Hospital's different units are taken as different departments so that the functioning and operations of the unit can be carried out effectively. Hospital has been classified into emergency room, pediatric unit and intensive care unit as different departments. For the budgetary purpose, each department's revenues and expenses are categorized under its head to arrive at the net operating profits for that unit. Different departments have operating expenses like salary and wages of the employees, supplies and drugs expenses, expenses on the basic needs like water and electricity, depreciation on the capital equipments of the departments. After taking into consideration the previous year's revenues and expenses, budgets are made for the departments.

//Now we will discuss the departmental budgets of the Very Best hospital. Moving forward, first of all, we will summarize the operating budget of emergency room and then proceed to other department's budget in the same way. //

Operating Budgets are prepared for a year (Johnson, 2004). Emergency room of the hospital provides various facilities to the patients. From the previous year's data and after making the required modifications, it should be estimated that over the year, around 300 patients will visit the emergency room. At an average, hospital charges $500 per patient. Thus, a total of $150,000 (300*500) will be received ...

Solution Summary

The response addresses the queries posted in 987 words with references.

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