AHIP Exam AHM-520 Topic 5 Question 65 Discussion

Actual exam question for AHIP's AHM-520 exam

Question #: 65
Topic #: 5

The core of a health plan's strategic financial plan is the development of its pro forma financial statements. The following statements are about these pro forma financial statements. Select the answer choice containing the correct statement.

AA health plan's pro forma financial statements forecast what the plan's financial condition will be at the end of an accounting period, without regard to whether the health plan achieves its objectives.

BForecasting the balance sheet is more critical to the health plan than forecasting either the cash flow statement or the income statement, because the balance sheet drives the development of the other two statements.

CIn order to avoid allowing the desired financial results to drive the assumptions used in developing the pro forma income statement, a health plan should avoid linking these assumptions to the health plan's overall strategic plan.

DA health plan can use its pro forma cash flow statement to calculate the net present value of the health plan's strategic plan.

Show Suggested Answer

Suggested Answer: A

by Evangelina at Feb 05, 2023, 06:37 AM

Limited Time Offer

25%

Off

Get Premium AHM-520 Questions as Interactive Web-Based Practice Test or PDF

Contribute your Thoughts:

Submit Cancel

Sabrina

1 months ago

I think someone's been playing a little too much with their financial modeling software. Answer D is a bit of a stretch, don't you think?

upvoted 0 times

...

Marion

1 months ago

Using the cash flow statement to calculate NPV? That's genius! Sign me up for Answer D!

upvoted 0 times

Detra

4 days ago

User 2: I think Answer D is correct. It makes sense to use the cash flow statement for NPV calculations.

upvoted 0 times

...

Leoma

5 days ago

User 1: Using the cash flow statement to calculate NPV? That's genius! Sign me up for Answer D!

upvoted 0 times

...

Wilda

2 months ago

Linking assumptions to the strategic plan is essential for meaningful pro forma statements. Answer C is backward.

upvoted 0 times

Melynda

9 days ago

C) In order to avoid allowing the desired financial results to drive the assumptions used in developing the pro forma income statement, a health plan should avoid linking these assumptions to the health plan's overall strategic plan.

upvoted 0 times

...

Jarvis

15 days ago

B) Forecasting the balance sheet is more critical to the health plan than forecasting either the cash flow statement or the income statement, because the balance sheet drives the development of the other two statements.

upvoted 0 times

...

Destiny

17 days ago

A) A health plan's pro forma financial statements forecast what the plan's financial condition will be at the end of an accounting period, without regard to whether the health plan achieves its objectives.

upvoted 0 times

...

Rolande

2 months ago

The balance sheet is crucial, but the other statements are also vital for a comprehensive financial plan. Answer B is an oversimplification.

upvoted 0 times

Pamella

2 months ago

I think we need to consider all the pro forma financial statements to have a comprehensive view of the health plan's financial condition.

upvoted 0 times

...

Mohammad

2 months ago

I agree, the balance sheet is important, but all the statements play a crucial role in the financial plan.

upvoted 0 times

...

Socorro

2 months ago

A pro forma financial statement is supposed to reflect the plan's objectives, not ignore them. Answer A is clearly incorrect.

upvoted 0 times

Delsie

1 months ago

Yes, the balance sheet drives the development of the other two statements. Answer B is the correct choice.

upvoted 0 times

...

Stephaine

1 months ago

Answer B seems more reasonable. Forecasting the balance sheet is crucial for the health plan.

upvoted 0 times

...

Harris

2 months ago

I agree, the statements should not ignore the plan's objectives. So, answer A is not correct.

upvoted 0 times

...

Tresa

2 months ago

I think answer A is incorrect. The pro forma financial statements should reflect the plan's objectives.

upvoted 0 times

...

Misty

2 months ago

I agree with Mollie, forecasting the balance sheet is crucial for the health plan.

upvoted 0 times

...

Mollie

2 months ago

I disagree, I believe the correct statement is B.

upvoted 0 times

...

Ailene

3 months ago

I think the correct statement is A.

upvoted 0 times

...