Describe how to assess financial risk and consequences assoc

Describe how to assess financial risk and consequences associated with patient portal technology decision. Calculate the breakeven, and explain the results of the analysis. Explain what investment recommendations you would propose as a current or futurr allocation decision. Provide and example. NIVERSITY Week 7 Introduction Resources Assignment Week in Revew Looking Abead Consider the following scenario: Champion Healthcare is an HSO that serves a large network of hospitals, research laboratories, and clinics acros various regions. Recently, the board of directors of Champion Healthcare has requested that all network health facilities develop patient portal technology to enhance patient engagement. As a health care administrator at one of the network hospitals, you have been called in to a stakeholder meeting to provide information on what technology is currently in use at your hospital. The agenda also includes learning about the aims of the newly designed patient portal technology so that you may implement the next steps to roll out the technology at your hospital Physicians and health care professionals who deliver health care directy are to promate this patient portal technology not only as a way to integrate electronic health records but also to allow patients the apportunity to engage in informed health decision making. Similarly, regional clinics and research laboratonies are to use the patient portal technology to integrate assessments, lab results, and other tests used for diagnoses to corroborate physician and patient information. The board of directors has recommended that the patient portal technology be planned, designed, and tested over the next 12 months. You have been asked to determine the feasibility of using this patient portal technology how to access and use the new technology For the break-even analysis portion of this Assignment, assume that the patient portal will generate revenue of $20 per patient in co-payments and will require a fixed cost of $50,000 for the initial investment and variable cost of $5 per patient for on-going maintenance

Solution

inancial risk is the possibility that shareholders or other financial stakeholders will lose money when they invest in a company that has debt if the company\'s cash flow proves inadequate to meet its financial obligations. When a company uses debt financing, its creditors are repaid before shareholders if the company becomes insolvent.

Financial risk also refers to the possibility of a corporation or government defaulting on its bonds, which would cause those bondholders to lose money.

here are many types of financial risks. The most common ones include credit risk, liquidity risk, asset-backed risk, foreign investment risk, equity risk and currency risk.

Credit risk, also referred to as default risk, is the type of risk associated with people who borrow money and become unable to pay for the money they borrowed. As a result, they go into default. Investors affected by credit risk suffer from decreased income from loan payments, as well as lost principal and interest, or they deal with a rise in costs for collection.

Several types of financial risk are tied to market volatility. Liquidity risk involves securities and assets that cannot be purchased or sold quickly enough to cut losses in a volatile market. Equity risk covers the risk involved in the volatile price changes of shares of stock. Asset-backed risk is the risk that asset-backed securities may become volatile if the underlying securities also change in value. The risks under asset-backed risk include prepayment risk and interest rate risk, both of which may also accompany other types of risk.

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To be profitable in business, it is important to know what your break-even point is. Your break-even point is the point at which total revenue equals total costs or expenses. At this point there is no profit or loss - in other words, you \'break even\'.

Why your break-even point is important

A business could be turning over a lot of money, but still be making a loss. Knowing the break-even point is helpful in deciding prices, setting sales budgets and preparing a business plan. The break-even point calculation is a useful tool to analyse critical profit drivers of your business including sales volume, average production costs and average sales price.

By understanding where your break-even point is, you are able to work out:

Calculating your break-even point

There are a number of ways you can calculate your break-even point. One simple formula uses your fixed costs and gross profit margin to determine your break-even point.

Fixed costs exist regardless of how much you sell or don\'t sell, and include expenses such as rent, wages, power, telephone accounts and insurance. Your gross profit margin is the percentage of sales dollars left after subtracting the production cost of goods sold from the total sales figure. Use our interactive calculator to work out your gross profit margin.

Remember that this is a simplified formula and you should talk to a financial adviserwhen considering your business\'s profitability.

Use the following interactive calculator to help you work out your break-even point. Once you have read and understood the example, you can type the numbers that are relevant to your business into the calculator to see your break-even point.