Comparative Data
Question
Prior to beginning work on the this assignment, review Chapters 14 and 15 in your course textbook as well as the Comprehensive Assessment of Firm Financial Performance Using Financial Ratios and Linguistics Analysis of Annual Reports (Links to an external site.)article and the Financial Ratios (Links to an external site.) web page. Complete the Comparative Data Staffing template Download Comparative Data Staffing template.
Background: As the office manager for Dr. Smith and Brown’s, you have the responsibility of ensuring efficient operation of their practices. In your healthcare career, you will need to understand the criteria, and use of comparative data as well as terms such as common-sizing, trend analysis, forecasting and projecting, which requires the analysis of data to make informed decisions.
Instructions: For this assignment, you will complete the Comparative Data template Download Comparative Data template. You are responsible for providing detailed responses to the questions posed in the document. You will also need to provide examples where indicated as well as references formatted per APA guidelines. When you have completed the document template, it should be at least two pages in length.


Solution
HCA312
Week 4 Assignment |
Comparative
Data |
Prior to beginning this assignment, review Chapter 14 and 15 in the course textbook, Health Care Finance: Basic Tools for the
Nonfinancial Managers, 5th edition. These two chapters will
assist you in responding accurately to the questions in the table.
Instructions:
Complete the
following table by writing detailed and
thorough responses to the questions. Provide
examples where indicated. Once the document template is completed, you
should have at least two pages. APA formatted citations and references are
required. Cite the sources per in the narrative and list the reference in the
last box of the table.
What
is meant by common sizing?
Provide
an example: |
Common-sizing is the process of
converting financial statement items to a common scale. Common-sizing aims to
reduce the effects of different accounting choices and inflation on financial
statements so that the statements can be easily compared among companies or
overtime for a single company. For example, if two companies have different
fiscal years, common-sizing would involve converting each company’s financial
statements to a common scale (e.g., per month, per quarter, or per year).
This would allow for an easy comparison of the companies’ financial
performance. |
What
is meant by Trend Analysis?
Provide
an example:
|
When analysts or investors talk about “trends,”
they are typically referring to long-term movements in data points. In financial
analysis, trend analysis is used to visualize and identify trends in data
sets to make better-informed decisions (Harvey, 2014). There are numerous
methods for measuring and identifying trends, but trend lines, moving
averages, and index numbers are the most common. One of the most common ways
to visualize trends is by using a trend line. A trend line is simply a line drawn
on a chart to depict a data set’s direction and slope visually. For example,
imagine you have a line chart that plots the monthly sales of a company over
the past year. If you were to draw a trend line on this chart, it would show
you whether or not sales have been increasing, decreasing, or staying
relatively flat over time. |
What
is the difference between forecasting and projecting?
|
Forecasting is a method of estimating
future events while projecting estimates of future events based on past
trends (Soyiri & Reidpath, 2013). An example of forecasting would be
predicting the sales for the next quarter, while an example of projecting
would be predicting the next year’s sales based on the previous year’s sales. |
What
are the three common types of forecasts in a Healthcare Organization?
|
There are three common types of forecasts in a Healthcare
Organization: operational, financial, and market. Operational forecasting is used to
estimate future service and staffing requirements. This forecast might be
based on past data, such as patient volume and length of stay, or demographic
changes, such as population growth. Financial forecasting is used to predict future revenue and expenses.
This type of forecast can be based on historical data, such as past revenues
and expenses, or on economic trends, such as inflation rates. Market forecasting is used to predict future demand for healthcare
services in a particular geographic area. Demographics
and economics can both influence a trend forecast. |
Name the three criteria that must be met for true
comparability. Discuss each. |
The three criteria that must be met for true
comparability are: 1. The items being compared must be of the same kind. The most common
type of comparison is between companies, but comparisons can also be made
between individuals, departments, or other entities. 2. The items being compared must be measured using the same units. This is important because it ensures that
the data is directly comparable. For example, if two companies are being
compared, but one company reports its revenue in euros and the other company
reports its revenue in dollars, then the data is not directly comparable. 3. The items being compared must be measured using the same period.
This is important because it ensures that the data is directly comparable.
For example, if two companies are being compared, but one company reports its
revenue for the year 2016, and the other company reports its revenue for the
year 2017, then the data is not directly comparable. |
What
elements of consistency should be considered?
Provide an example:
|
A few elements of consistency should be
considered when analyzing comparative data. First, you want to make sure that
the data is comparable, meaning that it is from the same time period and
covers the same information. For example, if you are comparing financial data
from two different companies, you want to make sure that the data is from the
same fiscal year. Second, you want to make sure that the data is complete,
meaning that all of the necessary information is included. For example, if
you are comparing financial data, you want to make sure that both balance
sheets and income statements are included. Finally, you want to ensure that
the data is accurate, meaning that it has been verified and free from error. |
Discuss the importance of comparative data and
explain the healthcare manager’s responsibility when comparing data
|
Comparative data is
important because it allows healthcare managers to see how their own
organization’s performance compares to similar organizations (Miriovsky, Shulman, & Abernethy, 2012). This can help them identify areas where they
may need to make improvements. Additionally, comparative data can be used to
benchmark against other organizations to set goals and track progress. When comparing data sets,
healthcare managers need to ensure that the data is accurate and complete.
Additionally, they should make sure that they are comparing apples to apples,
meaning that they are only comparing truly comparable data sets. For example,
if you are trying to compare the financial performance of two hospitals, you
would want to make sure that you are only comparing hospitals of a similar
size, in a similar geographic location, with similar patient populations. |
Name the four common uses of Comparative Data.
Discuss each.
|
The four common uses of comparative data are: 1. To compare results over time (trend analysis). This is typically
done to identify patterns or trends in data, which can help forecast future
results. 2. To compare results across different groups or categories
(common-sizing). This is often done to normalize data so that it can be more
easily compared and interpreted. 3. To compare a company’s performance to its competitors
(benchmarking). This can help identify areas where a company may need to
improve its operations. 4. To compare a company’s performance to industry averages (industry
analysis). This can help determine how well a company is performing relative
to its peers. |
Explain Standardized Data
Provide an example.
|
Standardized data has been modified to
make it easier to compare to other data sets. For example, if two data sets
are both measured in different units, they can be standardized by converting
them both into the same unit (e.g., converting both sets into percentages). |
List your References:
REQUIRED
|
Harvey, A. (2014). Trend analysis. Wiley
StatsRef: Statistics Reference Online. Soyiri, I. N., & Reidpath, D. D.
(2013). An overview of health forecasting. Environmental health and
preventive medicine, 18(1), 1-9. Miriovsky, B. J., Shulman, L. N., &
Abernethy, A. P. (2012). Importance of health information technology,
electronic health records, and continuously aggregating data to comparative
effectiveness research and learning health care. Journal of Clinical
Oncology, 30(34), 4243-4248. |




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