In the United States, one woman out of every four women succumbs from a heart disease. The coronary heart disease (CHD) is the most common form of heart disease affecting women in the nation. CHD occurs due to a buildup of plaque in the inner walls of the coronary arteries. Today, it is considered to be the leading killer disease for both men and women in the U.S. This essay is a simple revenue and expense budget for six months, for a start-up establishment, which offers healthcare s to women suffering from the heart disease in the U.S. The essay also develops a break-even analysis for the start-up, a justification for the revenue and expenses indicating the sources of funds for the project, explanation of a budget variance and the current weeks financial analysis for the project.
Simple Revenue and Expense Budget for the Past Six Months
The following is a simple six-months revenue and expense budget for the project. The budgeted period started from November 1, 2015, and up to April 30, 2016. The revenues for the projected budget were to be obtained from two primary sources, from the patients clinical services, and from donations. Under the physician or clinical services, the gross estimated sum to be raised for the period of six months was to be two hundred thousand dollars. Although the project will offer subsidized cost for all the heart treatment services to women, the patients will have to meet the larger portion of the medical expenses.
Under the donations, the project will obtain most of its finances from health and wealth welfare organizations, which are based on different parts of the world, and the government. Some of the organizations that have pledged to offer financial aid to the project include the Equality Now, WHO, Family Care International and Catalyst. Others included the National Organization for Women, Global Fund for Women, United Nations as well as the government. The expected expenses for the project would arise from salaries, supplies, utilities, interest on borrowings, insurance, rental lease, employees benefits and other direct expenses. This budget is summarized in the chart below.
Totals for the Proposed Budget
From November 2015 to April 2016
Revenues Currency (USD)
Physician or clinical services 150,000
Ancillary services 50,000
Total Gross Patient Service Revenue 200,000
WHO donations 80,000
Family Care International 25,000
National Organization for Women donations 35,000
Global Fund for Women donations 120,000
Government donations 250,000
UN Grants 450,000
Operating Revenue 1,025,000
Net Operating Revenue 1,225,000
Expenditures Salaries 35,000
Interest on Borrowings 5,000
Rental Lease 100,000
Employees Benefits 20,000
Other Direct Expenses 5,000
Total Operating Expenses 230,000
Net Operating Capital 995,000
The Break-Even Analysis
This is the analysis that determines the point at which the total revenue attained equals the total cost associated with attaining the revenue. It is an important step during the execution of a project as it aids in the calculation of the known margin of safety. That is the point where the sum of revenues in a project exceeds the break-even point. In a mathematical context, the formulation of the breakeven analysis is performed by using the equation below.
Fixed Costs Variable Costs = Breakeven Point (Units)
Nevertheless, in the context of this project, the two units that should be considered include the net revenues of the project and the total sum of the operating expenses. This means to attain the breakeven point, the total sum of expenditures should be equated to the same value of revenue attained for the project. In this case, the total value of expenses incurred during the project is $230,000. This means that the breakeven point for this project is at $230,000.
Articulation of Revenue and Expenses
The funds for this project were greatly financed by the government and other human welfare associations. In numerous nations, the government is the leading source of funds for most healthcare availing institutions. In this project, a proposal was addressed to the U.S. Department of Health and Human Services. After it was reviewed and approved, the project attained the funds to launch its start-up, in structuring a facility aimed at treating women suffering from the heart disease. In addition, a sizeable amount of the startup capital came from donations availed by various human welfare associations.
Such associations support various projects around the world, which offer support services to disadvantaged persons. This project sought to offer treatment of the heart disease at a low cost to women in the United States. This is because the cost of treating the disease is remarkable high to be afforded by numerous women in the nation. This is more so particularly because past research has indicated that majority of women who are low-income earners in the U.S. lack medical insurance. As a result of this occurrence, there has been a large number of women who succumb from the disease in the nation each year.
In addition, the project managers borrowed some of the startup revenue from monetary lending institutions. In this project, the land granted by the government as the site for project construction was used as the collateral to attain the loan. The loan was availed at an interest rate of sixteen percent per month on the reducing balance. The final source of revenue for the start-up was from the patients, who paid subsidized amounts as payments for their treatments. This amount was used to clear various operational expenses incurred on a monthly basis in the project.
The expenses incurred during this research were largely operational expenses. These are expenses that must be incurred in order for the project to operate smoothly. In this context, salaries were paid to the people who offered their services for the project functions to run. Those included doctors, electricians, cleaners, nurses and caretakers among others. The utility expenses were incurred through payments for electricity, water, cable connection and calls. The interest on borrowings was the accrued sum of interest incurred due to the amount loaned as revenue for startup. Since the project was involved in offering healthcare services to the public, it was essential for it to have an insurance cover. This was so as to cover itself from any contingencies that may arise when offering health care services to the women suffering from the heart diseases.
The other expenses that were incurred in the course of running the project involved payments for rental lease. Although the government had offered some of the lands for construction of structures for the project, it was not enough to build sufficient wards for patients. For this reason, some of the nearby buildings were leased and renovated into wards. The expenses incurred in the form of the employees benefits were those involving transporting the staff to and from the project site by bus every day. The employees were also offered meals during lunch break during the six months period. Finally, other direct expenses incurred were those associated with offering emergency medical assistance to patients with needy cases who could not raise the desired amount to acquire medical services.
Variance from The Budget
A budget variance is characterized as a periodic measure that is used by an individual, corporation or governments aimed at quantifying the differences between the budgeted figures and the actual figures. A favorable budget variance is denoted by a gain on the variance while an unfavorable budget variance is represented by a loss in the variance. The chart diagram below illustrates the budget variance for proposed project. In this context, a positive variance was observed between the proposed budget and the actual budget.
Totals for the Proposed Budget
From November 2015 to April 2016
Proposed Budgeted Amount Used Actual Budget Amount Used Variance
Revenues Currency (USD) Currency (USD) Currency (USD)
Physician or clinical services 150,000 176,000 26,000
Ancillary services 50,000 48,000 -2000
Total Gross Patient Service Revenue 200,000 224,000 24000
Loans 50,000 56,000 6000
WHO donations 80,000 74,000 -6000
Family Care International 25,000 33,000 8000
Catalyst 15,000 23,000 8000
National Organization for Women donations 35,000 45,000 10000
Global Fund for Women donations 120,000 120,000 0
Government donations 250,000 230,000 -20,000
UN Grants 450,000 570,000 120,000
Operating Revenue 1,025,000 1,151,000 126,000
Net Operating Revenue 1,225,000 1,375,000 150,000
Expenditures Salaries 35,000 43,000 8,000
Supplies 25,000 15,000 -10,000
Utilities 15,000 20,000 5,000
Interest on Borrowings 5,000 4,500 -500
Insurance 25,000 20,000 -5,000
Rental Lease 100,000 100,000 0
Employees Benefits 20,000 25,000 5,000
Other Direct Expenses 5,000 5,000 0
Total Operating Expenses 230,000 232,500 2,500
Net Operating Capital 995,000 1,142,500 -
Net Variance 147,500
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