HCM5001: Fundamentals of Health & Care Finance
Assignment Brief
As part of the formal assessment for the programme you are required to submit a Fundamentals of Health & Care Finance assignment. Please refer to your Student Handbook for full details of the programme assessment scheme and general information on preparing and submitting assignments.
Module Overview
This module provides a comprehensive foundation in financial principles and their application within health and social care settings. Students will develop critical skills in interpreting financial statements, evaluating investment opportunities, and understanding the regulatory environment shaping healthcare finance.
Learning Outcomes
On successful completion of this module students will be able to:
- Explore and evaluate the financial environment under which health and social care services are provided.
- Explain the accounting process to prepare financial statements in healthcare and analyse the role of the finance function in a healthcare organisation.
- Interpret financial statements in healthcare and evaluate financial information for the management of healthcare organisations.
- Determine how to prioritise and evaluate investments in healthcare by applying tools to assess their financial viability and their benefits/costs for the population of interest.
Graduate attributes: Professional Skills
Students will perform effectively within the professional environment. They will work within a team, demonstrating interpersonal skills such as effective listening, negotiating, persuading and presentation. They will be flexible and adaptable to changes within the professional environment.
Assignment Tasks
Task 1 – Healthcare Funding & Regulatory Environment
(a) Outline the recent developments in the financial and legal/regulatory environment of health and social care service delivery. (15 marks)
(b) Considering the usefulness of 3 alternative funding options, draw a conclusion on what the best form of funding would be for the health and social care sector. (15 marks)
- (1000 Words)
- (30 Marks)
- (LO: 1)
Task 2 – Financial Analysis & Investment Appraisal (BUPA Case Study)
(a) Du Pont Analysis: Review the financial statement for BUPA Group and determine the profitability of the business.
- Calculate and analyse the Return on Equity (ROE) using Du Pont Analysis for 2021 and 2020. (5 marks)
- Explain how Du Pont Analysis could be used in decision-making. Is this business viable in this case? (10 marks)
- Industry Average for Healthcare Sector: ROE: 11.6% | Debt Ratio: 35% (15 marks total)
(b) Investment Appraisal (NPV & IRR): BUPA has two possible mutually exclusive service offerings. The Finance Manager projected the following investment information. The company's cost of capital is 10%. Evaluate these investment options with Net Present Value (NPV) and Internal Rate of Return (IRR) techniques. Explain what each of these values mean and make a recommendation on which option the company should invest in, justifying this decision. (15 marks)
| Cash Flows (£) | Premium Option | Basics Option |
|---|---|---|
| Initial Investment | -650,000 | -515,000 |
| Year 1 Net Cash Flows | 175,000 | 125,000 |
| Year 2 Net Cash Flows | 178,000 | 130,000 |
| Year 3 Net Cash Flows | 150,000 | 140,000 |
| Year 4 Net Cash Flows | 190,000 | 150,000 |
| Year 5 Net Cash Flows | 192,000 | 160,000 |
| Residual Value of Equipment | 50,000 | 40,000 |
- (700 Words)
- (30 Marks)
- (LOs: 3 & 4)
Task 3 – Board Briefing Report: Role of Finance & Financial Health
Assuming the role of a financial advisor, write a briefing report to the board of directors of the BUPA Group to cover the following:
- (a) Explain the process to prepare financial statement. (10 marks)
- (b) Determine the Debt Ratio and include a statement on the solvency position of the company. (10 marks)
- (c) Critically appraise the role of the traditional finance function for healthcare organisations. (10 marks)
Ten additional marks are allocated for presentation, referencing and academic writing. (10 marks)
- (1300 Words)
- (35 Marks)
- (LOs: 2 & 3)
Additional notes:
Students are required to indicate the exact word count on the title page of the assessment.
The word count excludes the title page, tables, figures, diagrams, footnotes, reference list and appendices. Where assessment questions have been reprinted from the assessment brief these will also be excluded from the word count. ALL other printed words ARE included in the word count. See 'Word Count Policy' on the homepage of this module for more information.
End of assignment