Cash and Working Capital
DeVry University
HSM 340: Health Services Finance
Prof. Steve Klense
October 9, 2014
Cash and Working Capital1. What are four general phases of the working capital cycle? Four general phases of working cycle are:
There are four general phases of the working capital cycle. One phase is the purchasing of resources. This relates to the amount of supplies, labor, and inventory of realistic production schedules of the staff. This is to ensure that there are adequate provisions of services. The second phase is the sale/production of service. An example would be healthcare services and no inventory count. The third phase is billing. Billing refers to the discharge or release of a patient and then a bill is generated for the cost of the visit. The last phase would be a collection. A collection is the generation of the bill and the actual collection of the cash from the patient or the patient’s third-party payer.2. What are the three primary sources of short-term fundsThe three primary sources of short-term funds are 1) single payment loans 2) lines of credit and 3) revolving credit. A single payment loan is a loan that is required to be paid back at the end of its duration and monthly payments are not made on it. A line of credit is an agreement that allows a firm to borrow a certain amount of money on a specified limit during a loan period. Revolving credit is similar to a regular line of credit, but it usually last more than a years time. 3. An organization’s short-term investment options for idle cash include what four areas? List and provide their characteristics
1). Short-term working capital needs. A short term working capital is a business that needs funds to handle the regular expenses that are associated with the company. Most healthcare facilities carry 20 days of expected transactions that are made by cash at any point in time to meet short term working capital needs. 2)….

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