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Week 5: Break-even Analysis Assignment
Due Sunday by 11:59pm Points 100 Submitting a file upload Available Feb 24 at 12am - Apr 27 at 11:59pm 2 months
Purpose
The purpose of this assignment is to provide learners with the opportunity to develop break-even-analysis skills. Week 5 Break Even Analysis Assignment and Guidelines (Links to an external site.)Links to an external site. Due Date: Sunday 11:59 p.m. MT at the end of Week 5 Students are given the opportunity to request an extension on assignments for emergent situations. Supporting documentation must be submitted to the assigned faculty. If the student's request is not approved, the assignment is graded and a late penalty is applied as follows: Monday = 10% of total possible point reduction Tuesday = 20% of total possible point reduction Wednesday = 30% of total possible point reduction If the student's request is approved, the student will be informed of the revised due date. Should the student fail to meet the revised due date, the assignment is graded and a late penalty is applied as follows: Monday = 10% of total possible point reduction Submit Assignment
Tuesday = 20% of total possible point reduction Wednesday = 30% of total possible point reduction Total Points Possible: 100
Requirements
Answer the questions and complete the calculations required for the assignment. Submit your answers on a Word document, with the heading of Week 5 Assignment. For the questions requiring a written response, answer directly on the assignment and adhere to proper grammar and syntax, and provide references. For the questions requiring calculations, show all of your work and follow the format that has been provided for the calculations in the lesson for Week 5. In addition, further explanations and formulas on the break-even analysis are contained in the required reading resources.
Preparing the paper
Break-Even Analysis Case Study You and several of your colleague business partners have decided to establish an outpatient fertility clinic in your service area. All of you are very familiar with this patient population base, have completed an extensive market analysis that demonstrated a great need for the service, and are comfortable with setting up a business and the costs associated with this special group of patients. As part of the business plan, you and your partners will need to convince stakeholders that this new service endeavor will be viable. They will want to know a) how many patient visits will need to occur annually and b) how long it will take for the service to be at least cost neutral or profitable. To provide them with this information you will perform a break-even analysis. Use the following data and conduct the analysis accounting for the contribution margin of each patient acuity category. Patient acuity is a concept commonly referenced by caregivers and the health science literature but without specificity or consistency of definition or measurement. Acuity has become a reference for estimating nurse staffing allocations and budget determinations. [projected staffing and beds] Fixed Costs: $9,788,000 (start-costs, specialty physicians,
Clinic days: Monday-Saturday—312 days/year Projected patient visits per year: 7488 Patient charges by patient acuity category: o Simple (15%)---------$2,000/visit o Moderate (60%)- - - -$6,500/visit o Complex (25%)------$10,000/visit
- Describe your approach to this Case Study. In addition to the numbers given, what do you need to know before you can calculate the break-even analysis?
- Perform the calculations needed for the break-even analysis. Show all your work. After you've completed the calculations, record your results in the appropriate place in the table. Key points for calculations When performing calculations, standard rounding rules apply. If the number to the right of the decimal is less than 0.5, round down to the nearest whole number, e.g., 33.4 = 33 If the number to the right of the decimal is 0.5 or greater, round up to the nearest whole number, e.g. 33.5 =34. Read the question carefully. Pay close attention to the units be asked and keep them consistent. For example, days vs months vs years; charges vs contribution margin; dollars vs percentage Provide ALL formulas with references. Designate which formula associates with which source. It is not sufficient to simply list the source at the beginning of the section. Write out the formula used BEFORE filling in the numbers. Formulas used should be taken from one of the required resources for this course. Example: Total Contribution Margin (CM) = Contribution margin (CM) category 1 + CM cat 2 + CM 3 Leger, J.M. & Dunham-Taylor, J. (2018). Financial management for nurse managers: Merging the heart with the dollar, 4 th^ Ed. Burlington, MA: Jones- Bartlett. Break-even Analysis Data Table Acuity Category Percentage % Charge per Visit Visits per Year Charges per Year Visits per Day Charges per Day Contribution Margin Simple 15% $2,
Loss
Jet ski: $2000; sold for $1400; loss of $ -$600 x 100 = - 30% 50% 1200 error
Jet ski: $2000; sold for $1400; loss of $ -$600 x 100 = -30% loss 2000 Business Investment ROI = Gain on Investment x 100 Investment Costs [it cost you X # dollars to invest in the item] Example: Invest $5K in social media campaign Success: Yields $7K [income] over 12 months Gained $2K profit ROI = 7000 (cost + amt earned) - 5000 (minus cost) X 100 5000 You invested: $5K You earned: $7K You Gained: $2K ROI = 2000 (amt earned minus cost) X 100 5000 Investment [original cost] Ans: 40% [calculator shows 40] earned you 40%
4/2/2019—10:17am, Tuesday Chapter 3: profit vs. loss, basically In the world of competitive hospital management, hospitals must innovate with new programs, new patient populations, or quality initiatives to survive and better achieve the continuum of care in the value-based environment. New sources of information on hospital care continually become available in both print and electronic media, so decision makers must be savvy regarding patient outcome comparisons. Just as automobiles are rated for gas consumption and airlines for on- time arrivals, payers and consumers contract for hospital care based on price and quality through managed care negotiations. Ch. 5 p. 114 explains breakeven point. Basically, you have to have more variable revenue than variable costs. Even if it’s $2K, if the variable costs is $2001, you’ll always be $1 in the hole which adds up over time and keeps you in the red. No charts, though… Ch. 7 p. 167: electronic health record (odd location). Budget spreadsheet, man-hours contract, PTO, … not sure if I need this chart [actual, budget, var%, prio, statistic]
Break-Even Analysis: See also, Erin Lindley
Chamberlain College of Nursing Executive Practicum
NR 630Dr. Borre May 30, 2018
SchoolChamberlain College of Nursing Course TitleNURS NR 660 Uploaded Bybaileylindley Pages Ratings 100% (18) 18 out of 18 people found this document helpful
