Financial analysis in healthcare Coursework Example | Topics and Well Written Essays - 750 words

Financial analysis in healthcare - Coursework Example The performance of an organization comprises of the measured actual output of an organization against the set target output. A positive correlation exists between organizational performance and financial effectiveness. The real organizational output increases with financial stability and effective investment decisions. Economic effectiveness is particularly important for organizational performance based on its influence on the profits, return on investments and the return on the assets of an organization. For the initially invested funds to generate returns, subsequent investments that aim at building the capacity for production are made (Turner, 2011). These investments depend on the stability of a firm’s financial framework. When more profits are generated, the amount of resources reinvested and the reserves increase. The expansion of the investment of an organization holding other factors constant results to increased profitability and returns. An effective investment requires an effective financial strategy in order to generate real returns and produce the maximum yield. Every investment opportunity is faced with uncertainty and risk. Organizations with a sound investment and financial base are bound to survive bad times in the business cycle such as depressions and recessions. Organiza tions with unstable financial strategies are most likely to close down operations during these bad times. How well an organization performs in terms of competitiveness and market share are a function of its investment and financial strategies. An organization with an effective investment and economic base competes effectively in the market through proper investment of adequate resources to support its brand and hence excellent organizational performance. Organizations with an adequate financial history can attract a wide range of stakeholders that matter to the organizational