Capital Financing and Risk Analysis

What type of financing is associated with ownership?

• Debt financing

• Equity (ownership) financing

• Lease financing

• Bond financing

What does the balance sheet contain?

• Marketing strategies and sales data

• Financial position information at a given point in time

• Employee performance reviews

• Future financial projections

What do liabilities represent on a balance sheet?

• The total revenue of the business

• The operational costs of the business

• Claims against the business that are fixed by contract

• The investment portfolio of the business

How is equity defined for investor-owned businesses?

• The total debts owed by the business

• The accounting (book) value of owner-supplied financing

• The sum of all financial assets minus liabilities

• The market value of the business's shares

What is equity for not-for-profit businesses often labeled as?

• Gross income

• Net assets

• Total liabilities

• Shareholder value

Why do healthcare providers need capital?

• To hire more staff

• To acquire the assets needed to provide services

• To pay for utilities

• To invest in marketing

What are the two basic forms of capital?

• Debt capital and equity capital

• Savings and investments

• Loans and grants

• Credit and debentures

Debt capital is supplied by whom?

• Owners

• Lenders

• Employees

• Patients

Equity capital is supplied by whom?

• Lenders

• Owners or the community

• Government

• Foreign investors

In a free market economy, how is capital allocated?

• By government regulations

• By the ability to repay loans

• By price, to those most able to pay

• Equally among all businesses