CALA Financial Management & Budgeting Flashcards

What financial metric measures the percentage of revenue remaining after all operating expenses are paid?

Answer: Operating profit margin

Operating profit margin measures how much profit remains from revenues after subtracting all operating expenses, expressed as a percentage.

Which Medicaid program most commonly funds assisted living services for low-income residents in the US?

Answer: Home and Community-Based Services (HCBS) waivers

Medicaid HCBS waivers are the primary mechanism states use to fund assisted living and similar residential care services for eligible low-income individuals.

An assisted living administrator is conducting a variance analysis. What does a negative variance in labor costs indicate?

Answer: Labor costs were higher than budgeted

In expense categories, a negative variance means actual costs exceeded the budgeted amount, indicating overspending on labor.

What is the purpose of a capital expenditure budget in an assisted living facility?

Answer: Plan for major asset purchases and facility improvements

A capital expenditure budget plans for the purchase or improvement of long-term assets such as equipment, renovations, or major facility upgrades.

Which document provides an assisted living administrator with a month-by-month projection of cash inflows and outflows?

Answer: Cash flow projection

A cash flow projection forecasts when money will come in and go out each month, helping the administrator ensure the facility can meet its financial obligations.

In assisted living billing, what is a 'level of care' fee structure?

Answer: A tiered pricing model where fees increase based on the amount of assistance a resident requires

A level of care fee structure charges residents different rates depending on their assessed needs, with higher care needs resulting in higher fees.