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Financial Assessment in Healthcare Chapter Exam

Exam Instructions:

Choose your answers to the questions and click 'Next' to see the next set of questions. You can skip questions if you would like and come back to them later with the yellow "Go To First Skipped Question" button. When you have completed the practice exam, a green submit button will appear. Click it to see your results. Good luck!

Page 1

Question 1 1. If a company is highly leveraged, this means that _____

Use this material to answer questions #2 through #3

Vandox Company Ltd is a company looking to secure a loan with a commercial bank.

The following details are available:

1. Interest expense = $58,000

2. Earnings = $215,000

3. Total liabilities = $143,000

4. Total assets = $450,000

5. Total equity = $29,000

Question 2 2. Calculate the interest coverage ratio.

Use this material to answer questions #2 through #3

Vandox Company Ltd is a company looking to secure a loan with a commercial bank.

The following details are available:

1. Interest expense = $58,000

2. Earnings = $215,000

3. Total liabilities = $143,000

4. Total assets = $450,000

5. Total equity = $29,000

Question 3 3. Calculate the debt ratio.

Question 4 4. Capitation Reimbursement encourages _____.

Question 5 5. Based on the lesson, which is NOT considered a variable expense in a healthcare organization?

Page 2

Question 6 6. What important issue did the Institute of Medicine identify utilizing benchmarking?

Question 7 7. _____ and _____ benchmarking are two types of benchmarking commonly used in healthcare organizations.

Question 8 8. Which activity ratio uses accounts receivable on its calculation?

Question 9 9. Which of the following is not an activity ratio?

Question 10 10. What makes a discrete event simulation discrete?

Page 3

Question 11 11. How can discrete event simulation help with optimization of resources?

Question 12 12. Investors have invested a total of $1,000,000 in your company, which netted $82,500 in income during the same period. What is the return on investment during this period?

Question 13 13. What's the best explanation of a profitability ratio?

Question 14 14. What is a financial ratio?

Question 15 15. Which of the following is the right formula for calculating the debt ratio?

Page 4

Question 16 16. When analyzing trends with comparative financial statements, if the percentage change increases, which accounts are impacted negatively?

Question 17 17. What is the formula for calculating percentage change year over year in accounting?

Question 18 18. How are financial statement ratios calculated?

Question 19 19. What does the current ratio show?

Question 20 20. You own a roofing company and wonder how your average prices compare to your competition. You find the average roof prices charged for a 1,500 square foot ranch home and compile the data below. Which of the following is true based on the data you collected?

Page 5

Question 21 21. Your company is trying to determine how competitive it is in the market, and it wants to design the strategic goals of the company. Company A is a company that is just as good as your company, while Company B is a much larger company that can be considered a leader of the industry with far greater revenue than yours. Which company should you compare your company with in the case of best practices benchmarking?

Question 22 22. What would a current ratio of 1 tell us about a company?

Question 23 23. A company has $35,000 in current assets, $15,000 in long term assets, $25,000 in current liabilities and $45,000 in long term liabilities. What is its current ratio?

Question 24 24. Which was NOT a suggestion to protect against declining patient volume?

Question 25 25. Alvin wants to use benchmarking to identify key performance indicators in the healthcare industry. What type of benchmarking should he use?

Page 6

Question 26 26. Which ratio is not used to determine how efficient a business is at converting its current assets into cash?

Question 27 27. _____ is NOT a healthcare issue that can be modeled through discrete event simulation?

Question 28 28. Your company had sales of $1,000,000, resulting in a gross profit of $85,000. What is its gross margin?

Question 29 29. Which of the following statements is TRUE as it relates to the analysis of the debt ratio?

Question 30 30. Choose the best answer to define comparative financial statements.

Financial Assessment in Healthcare Chapter Exam Instructions

Choose your answers to the questions and click 'Next' to see the next set of questions. You can skip questions if you would like and come back to them later with the yellow "Go To First Skipped Question" button. When you have completed the practice exam, a green submit button will appear. Click it to see your results. Good luck!

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