Healthcare Financial Planning Analysis

Financial planning is the method of managing the healthcare organization money in short and long-term to meet the needs of the organization. Strategic planning is the process of determining the missions and goals of organizations and procedures and processes on how to achieve the set goals. Both types of planning connect closely with each other in propelling the organization to reach the set targets (Thibodeaux).

Financial planning will direct how healthcare organization can afford to reach the strategic goals. After the strategic planning has set the goals and the directions to follow to reach those goals, the financial planning will be created to calculate the available human and objectives resources, infrastructures, activities and timeframes

Financial plan development

There are four steps in developing a financial plan of organization. First, organizations need to evaluate the current financial status and the growing trends of prior periods. Second, organizations need to determine the expected growth in total assets of the planned period. Third, organizations must specify the allowable debts that they can tolerate for short and long terms. Lastly, organizations need to evaluate the rationality of required growth rate in equity (Cleverly & Cleverly, 2017, pp. 313-326).

It is very important for organizations to evaluate the current financial status, which will assist organization in projecting the future growth and reasonable goals. Organizations will need to analyze the financial statement of the previous 3 to 5 years, such as balance sheets, revenue, debts, and expenses. Then, the ratio analysis should be performed to examine the financial conditions of organizations. The ratio analysis should include: profitability, liquidity, capital, and activity of organization (Cleverly & Cleverly, 2017, p.

Examples of revenues prediction are: net patients’ revenues, expansion of infrastructures, properties, and reimbursement rates that are related to services that are planned to be provided in the periods. Expenses predictions would include costs of staffing, supplies, payments of debt interests, and maintenances of assets. Based on the predictions, organizations can define the growth rate for each category (Cleverly & Cleverly, 2017, p. 319).

The leaders of organizations must specify the acceptable debts for planned period. Determine the debt levels will allow organizations to calculate the capability to borrow loans for developments and ability to make payments for loans. Then, organization can develop the appropriate financial planning without jeopardizing their operation (Cleverly & Cleverly, 2017, p.