Assessment #1: Understanding an Income Statement
You are an intern in a health care organization business office. Find an example of an income statement for a health care organization online and using the resources you have been provided under course content, please develop a 4-6 page paper responding to the following questions regarding the income statement:
1. What is an income statement used for?
2. What are the key components of an income statement?
3. On your example of an income statement, is the organization making a profit or loss? How much is that profit or loss? Show the calculations. (Total Revenues – Total Expenses = Net Profit/Loss)
4. On your example of an income statement, what is the “contribution margin”? Show the calculations. (Total Revenue – Variable Costs=Contribution Margin). You can use the assumption that volume is 15,000 if not included in financial statements.
5. What three financial indicators does a contribution margin help determine? How?
6. What is a break-even analysis? What is the break-even point for this organization? Show the calculations. (Total revenues – Total VC – FC= Profit)
7. How does a break-even analysis vary between fee-for-service and capitated payments? Explain it using the income statement you chose. What are similarities and differences applicable to the Income statements in fee-for-service and capitated payment options?
The paper should not be more than 6 pages and should follow APA format, spelling and grammar. Include a cover page and reference page (not included in the page count). Make sure to properly cite and reference all the used sources. The calculations need to be shown as formulas using figures. Follow the mathematical rules while calculating numbers.
Student demonstrates a high degree of critical thinking, is consistent in accurately interpreting questions & material; provides solid assumptions, reasoning & claims; provides thorough analysis & evaluation with sound conclusions
Student shows good critical thinking; accurately interprets most questions & material; usually identifies relevant arguments/reasoning/claims; offers good analysis & evaluation with fairly sound conclusions
Student shows occasional critical thinking; questions & material are accurately interpreted ay times; arguments/reasoning/claims are explained occasionally; offers fair analysis & evaluation with a conclusion
Student lacks critical thinking, consistently offers biased interpretations; ignores or superficially evaluates; argues using poor reasoning, and/or unwarranted claims
Student’s arguments or positions are well-supported with evidence from the readings/experience; ideas go beyond the course material and recognize implications and extensions of the material and concepts to the real life and industry. All calculations are accurate.
Student’s arguments or positions are mostly supported by evidence from the readings and course content; ideas presented demonstrate student’s understanding of the material and concepts and may relate to the real life and industry occasionally. Two of the calculations are accurate.
Student’s arguments are more often based on opinion or unclear views than on position grounded in the readings of material or external sources of material. Three of the calculations are accurate
There is no meaningful attempt to explain or support ideas or the application/examples are superficial and unrelated to the material/industry. None of the calculations are accurate
Student demonstrated full understanding of requirements; responded to each aspect of assignment: correctly developed required document format.
Student demonstrated general understanding of requirements; missed one minor aspect of assignment; the document format is missing one element
Student demonstrated some understanding of requirements; missed a key element or two minor aspects of assignment; the document format is missing two or more elements
Student did not demonstrate understanding of assignment requirements; the document format is not followed
Student’s writing is clear and easy to follow; grammar and spelling are all correct; formatting gives a professional look and adds to readability, no APA style errors
Most ideas are presented clearly; occasional spelling and/or grammar issues (no more than 3), attempts in-text citation and reference list but 1 or 2 APA style errors are present
Wordy; some points require rereading to understand fully; more than 3 occasional spelling and/or grammar errors, attempts in-text citation and reference list; APA style errors are present; inconsistencies in citation usage can be found throughout the document
Very difficult to understand, poorly written in terms of mechanics and structure