Roi and Variance Analysis

819 Words Feb 4th, 2013 4 Pages
ROI and Variance Analysis

ROI and Variance Analysis
What are the four major budgets of a health care organization? Briefly discuss each.
Describe the four types of responsibility centers, including the characteristics of each? The revenue center represents the organizational link in which the activity is appreciated. The cost center represents the organizational link in which products/ services are obtained which generate expenses (costs) with the help of which there can be measured the efficiency and efficaciousness of the centers’ activity as value according to the revenue acquired, such as the sales department within an organization. The profit center is the operational subdivision which performs its activity by attracting
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Organizational leaders, investors and creditors should understand how to calculate key financial ratios and their importance in analyzing the financial pulse of a firm.
What does the term “variance analysis mean when applied of financial performance of health care organizations? The process of portfolio selection that assumes that every rational investor, at a given level of risk, will accept only the largest expected return. More specifically, mean-variance analysis attempts to account for risk and expected return mathematically to help the investor find a portfolio with the maximum return for the minimum about of risk.
Business information (BI) systems establish an automated framework for making decisions. Effective BI systems provide a common platform and language for key decision makers in an organization. Applications bring analytics and performance management to health care. This insight gives management consultants the ability to gain insights into the employees, management and business partners of any health care organization. For health care this means increased revenue, reduced costs and less risk due to higher industry compliance standards which translates into a more efficient experience for both health care professionals and patients alike.
From revenues to expenses, BI allows for detailed analysis of cash flow statements and an efficient platform for comparing planned results to actual

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