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Financial Analysis for Developing a Proposed Budget for DIVERSICARE HEALTHCARE

A strategic initiative in a business organization is a comprehensive plan that links up the companies’ objectives and its future goals and visions. Based on the results and outcomes from the SWOT analysis we conducted, as a measure to assess the company’s strengths, weaknesses, opportunities, and threats, my team came up with a tremendous life-changing initiative to upgrade the financial management of the DIVERSICARE HEALTHCARE organization. Referring to the financial statements we looked into, one of them being the organization’s income statement, it was discovered that the business was not on a sound financial footing and hence required critical and quick changes to rescue it from potential financial crises.

Some of the changes agreed upon for the organization’s financial betterments were that the organization would look into ways of reducing operational costs as lowest as possible to increase its gross profit. Reduction of these costs will create room to reduce expenses on the business, and hence with fewer expenses, the revenue increases; therefore, a discoverable profit will be noticed. Other changes were that an increase in sales revenue for the coming financial years was suggested by strategizing on best possible ways to bring revenue in, reducing the overall labor costs for the business, reducing the insurance premiums, and finally reducing the organization’s utilities to maximize incomes and save on expenses (Stolowy et al., 2022). All these changes set aside had the same outcomes, and that was that it would have maximized and stabilized the business’s financial standing by increasing its revenue and hence a high business growth rate.

The budget figure below illustrates the proposed comprehensive plan and a prepared simple budget to accomplish all changes and obligations intended to be achieved after the financial management was revised and improved.

 1. Income Amount in $
Revenue (salaries) $10000
Extra benefits $5000
Total income $15000
2. Expenses Amount
Equipment $1500
Training and education $5000
Space $1000
Staffing $500
Carriage inwards costs $500
Total expenses $8500
3. Balance Amount
Total income minus total expenses. $6,500

In this simple illustration of our budget, there will be a profit of $6500 in the organization that financial year, if all strategies are set, followed.

A budge of recent and previous financial statements was examined and tested to convey and understand the organization and the financial standing or performance of the business. I reviewed the balance sheet, the income statement, and the cash flow statement of the organization. The balance sheet contributed a lot in informing us of the fixed and current assets available in the business, the liabilities, and equity all in one place (Bryans, 2018). Analysis of this balance sheet can provide several different reviews to the analysts. Some analysts consider the firm’s equity to be from the deduction of the liabilities from the assets, while others look into the entire capital of the firm.

On the other hand, the income statement is used to access the kind of income a business earns and the cost of the expenses involved in its operational activities within the company. Generally, this financial statement provides the analysts with whether the business is making a profit or not (Bryans, 2018). It also shows with clarity all direct and indirect expenses a company incurs. For example, in the profit and loss account, total sales were $100000 while the expenditures totaled $ 115000 hence giving a noticeable loss of &15000 in the data we examined during the research. In conclusion, all three financial statements co-relate and work together to provide an overview and information about the business’s financial standing. Hence, the analysts should consider reviewing current data to make a sound decision and financial planning on any strategic initiative.


Boone, L. E., Kurtz, D. L., & Berston, S. (2019). Contemporary business. John Wiley & Sons. Retrieved from,+L.+E.,+Kurtz,+D.+L.,+%26+Berston,+S.+(2019).+Contemporary+business.+John+Wiley+%26+Sons&ots=K69rzKh7zd&sig=SmjxFuOZBMZPsEuxTzvGJIPUb_8

Bryans, W. (2018). Practical budget management in health and social care. Routledge. Retrieved from

Stolowy, H., Paugam, L., & Gendron, Y. (2022). Competing for narrative authority in capital markets: activist short sellers vs. financial analysts. Accounting, Organizations and Society, Forthcoming. Retrieved from


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