Financial Management for Public, Health, and Not-for-Profit Organizations

Seventh Edition

Steven A. Finkler - New York University, USA
Thad D. Calabrese - New York University, USA
Daniel L. Smith - University of Delaware, USA

April 2022 | 640 pages | CQ Press

Reflecting recent changes in accounting standards, this Seventh Edition of Financial Management for Public, Health, and Not-for-Profit Organizations provides a comprehensive yet practical introduction to the financial decision-making and management skills required of students and practitioners in the public, health, and not-for-profit sectors. Assuming that readers have no prior training in financial management, the authors artfully combine the principles, theory, and analytics of accounting and finance. In every chapter, a wide range of exercises, case studies, and problems help students develop strong financial assessment and judgment proficiencies while reinforcing the essential mechanics of accounting.

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Preface

Case Examples

About the Authors

Part I: Introduction: Setting the Stage

Chapter 1: Introduction to Financial Management

What Is Financial Management?

Public Sector Resource Flows

Why Discuss Public, Health Care, and Not-for-Profit in One Book?

Why Should Public Service Organizations Worry About Financial Management?

Should Public Service Organizations Earn a Profit?

Ongoing Case Study

Summary

Key Terms from This Chapter

Questions for Discussion

Appendix 1-A. Fundraising

Key Terms from This Appendix

Part II: Planning

Chapter 2: Planning for Success: Budgeting

Mission

Strategic Plan

Long-Range Plan

Budgets

Behavioral Aspects of the Budget Process

Summary

Key Terms from This Chapter

Questions for Discussion

Problems

Chapter 3: Additional Budgeting Concepts

Line-Item and Responsibility Center Budgets

Centralization versus Decentralization

Program and Functional Budgets

Budgeting Techniques

Additional Governmental Budgeting Issues

Summary

Key Terms from This Chapter

Questions for Discussion

Problems

Appendix 3-A. A Performance Budget Example

Appendix 3-B. Forecasting Using Historical Data

Key Terms from This Appendix

Chapter 4: Understanding Costs

Basic Concepts and Definitions

Cost Behavior

Break-Even Analysis

Cost Measurement

Summary

Key Terms from This Chapter

Questions for Discussion

Multiple Choice and Fill in the Blank Questions

Problems

Appendix 4-A. Additional Break-Even Analysis Issues

Appendix 4-B. Using Excel to Solve Break-Even Problems

Chapter 5: Capital Budgeting

Why Do We Need a Separate Capital Budget?

Definition of Capital Assets: Theory and Practice

Why Do Capital Assets Warrant Special Attention?

The Time Value of Money

Capital Asset Investment Analysis

Summary

Key Terms from This Chapter

Questions for Discussion

Exercises (TVM)

Problems

Appendix 5-A. Using Computer Spreadsheets for Time Value of Money Calculations: Examples

Appendix 5-B. Using a Financial Calculator for Time Value of Money Calculations

Chapter 6: Long-Term Financing

Equity Financing

Long-Term Debt

Social Impact Bonds

Summary

Key Terms from This Chapter

Questions for Discussion

Exercises (TVM)

Problems

Part III: Implementation and Controlling Results

Chapter 7: Managing Short-Term Resources and Obligations

Working Capital Management

Short-Term Resources

Short-Term Obligations

Summary

Key Terms from This Chapter

Questions for Discussion

Problems

Appendix 7-A. Economic Order Quantity

Key Term from This Appendix

Appendix 7-B. Credit Terms

Chapter 8: Accountability and Control

Management Control Systems

Measures of Performance

Controlling Quality

Variance Analysis

Ethics

Safeguarding Resources

The Form 990

Consequences of Ethical Violations

Summary

Key Term from This Chapter

Questions for Discussion

Problems

Part IV: Reporting Results

Chapter 9: Taking Stock of Where You Are: The Balance Sheet

The Framework for Financial Accounting

Generally Accepted Accounting Principles

International Financial Reporting Standards

Fiscal Years

Balance Sheet Elements

Assets: A Closer Look

Liabilities: A Closer Look

Net Assets or Fund Balance: A Closer Look

Recording Financial Information

Summary

Key Terms from This Chapter

Questions for Discussion

Problems

Appendix 9-A. The Recording Process: Debits and Credits

Appendix 9-B. Using Dollar Signs and Underlines in Accounting

Chapter 10: Reporting the Results of Operations: The Activity and Cash Flow Statements

The Activity Statement

The Statement of Cash Flows

Interrelationships among Financial Statements

Notes to Financial Statements

Recording and Reporting Financial Information

Starting from Scratch

Summary

Key Terms from This Chapter

Questions for Discussion

Problems

Appendix 10-A. Sources of Revenue for Governments

Key Terms from This Appendix

Appendix 10-B. Accelerated Depreciation Methods

Appendix 10-C. Inventory Valuation Methods

Appendix 10-D. The Recording Process: Debits and Credits

Appendix 10-E. The Accounting Cycle

Chapter 11: Unique Aspects of Accounting for Not-for-Profit and Health-Care Organizations

Accounting for Not-for-Profit Organizations

Fund Accounting

Depreciation

Donated Goods and Services

Investments

Taxes

Accounting for Health-Care Organizations

Summary

Key Terms from This Chapter

Questions for Discussion

Problems

Appendix 11-A. Taxation of Not-for-Profit Entities

Chapter 12: Unique Aspects of Accounting for State and Local Governments—Part I: The Recording Process

Bases of Accounting

Government Fund Accounting

Recording Financial Information

Summary

Key Terms from This Chapter

Questions for Discussion

Problems

Appendix 12-A. The Recording Process: Debits and Credits

Chapter 13: Unique Aspects of Accounting for State and Local Governments—Part II: Reporting Financial Results

Reporting Financial Information

Summary

Key Terms from This Chapter

Questions for Discussion

Problem

Appendix 13-A. Interrelationships among Government Financial Statements

Part V: Financial Analysis

Chapter 14: Financial Statement Analysis

Financial Statement Review

The Notes That Accompany Financial Statements

Ratio Analysis

Assessment

Summary

Key Terms from This Chapter

Questions for Discussion

Problems

Chapter 15: Financial Condition Analysis

Financial Condition Analysis

Financial Statement Analysis versus Financial Condition Analysis

Ratio Analysis

Summary

Key Terms from This Chapter

Questions for Discussion

Problems

Appendix 15-A. Bond Ratings

Key Terms from This Appendix

Glossary

Index

Supplements

Instructor Resource Site

Instructor Resource Site
Online resources included with this text

The online resources for your text are available via the password-protected Instructor Resource Site, which offers access to all text-specific resources, including solutions to end-of-chapter questions and Excel templates for chapter problems.

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Key features

NEW TO THIS EDITION

Recent changes implemented by both the Financial Accounting Standards Board (FASB) and the Governmental Accounting Standards Board (GASB) reflected in every chapter.
New appendices on how to use Excel's Goal Seek function to analyze breakeven data to help students use spreadsheets when learning about managerial accounting topics.
Updated case studies and expanded homework problems in both managerial and financial accounting.

KEY FEATURES

Written for students with little or no financial management background, the book provides a uniquely comprehensive introduction to the “hard skills” for a non-expert audience.
Exercises, problems, case studies, and questions for discussion provide frequent opportunities to apply the skills and principles of financial management.
Comprehensive coverage includes cost analysis, budget preparation, budget and variance analysis, management control, and recording and reporting financial information with an emphasis on preparing and analyzing financial statements.
Coverage of the foundational principles of each of the methods introduced in the book includes step-by-step equations, figures, and exhibits that illustrate how to execute financial management in practice.