Question

Common sizing and trend analysis are two items healthcare managers should know about. Discuss these two items from the perspective of a healthcare manager’s point of view.

Answer 1

Common sizing is happened with taking sales as a base value or asset as a base value in income shatement and balance sheet respectively. It provide information about different cost with respect to sales in income statement so that healthcare manager can easliy identified which all area is causing huge cost for the organisation and try to control it. Similarly using balance sheet common sizing health manager can know which all are part of asset and liabilites and how much each item are weighing in this way he can manage the those variables and increase the profitability of firm in near future.

Trend analysis is analysis of financial result over the year. In this healthcare manager take value of one year as base year and then check how the value of other parameters increases over the year. Thus in that way he can forecast the requirement of its hospital easily by interpolating.