Financial Structure of Financial Environment Financial structure is the mixture of financial instruments, financial markets and other financial institutions operating within the economy. ( Fase & Abma, 2003). Financial structure consists of a company's assets, capital and liabilities. Financial structure is also specific equity and long-term debts that firms employ to finance its business operations. Typically, financial structure of a company generally affects the business operations and value of a business. On the other hand, financial structure could also be described as the amount of organization's cash flow that goes to shareholders and creditor. Organizations use their financial structure to finance their short-term and long-term obligations and financial structure is different from capital structure since capital structure only focuses on the long-term source of funds, which include long-term debt, debentures, and equity capital shares.

On the other hand, financial environment constitutes the financial market that includes foreign exchange market, bond market, money market, stock equity market, real estate market, derivate market, commodity market and on-the-counter market. These markets constitute the platforms where buyers and sellers interact within financial environment. Within a financial environment, market participants include institution investors, individual investor and speculators. Moreover, both private and government authorities provide rules and regulations guiding the conduct of financial environment.

Description of Financial Structure of Each Financial Environment.

In the contemporary financial environment, there are various financial structures within financial environments. The equity market is one of the major financial markets that organizations employ to raise capital to satisfy their short-term and long-term obligations. Within the equity market, organizations raise capital from the public by selling shares to institutional investors, individual investor and international investors. Through this strategy, many organizations have been able to raise financial assets to finance both short-term and long-term investment by selling shares to the public. Moreover, a bond market is a fixed market or credit market that firms use to raise money to satisfy both their short-term and long-term obligations. Within financial environment, government issue and trade on debt securities to raise fund from the public. Similar to the government issued security, the corporate organizations also issue debt for business expansions and ongoing business operations. Most bonds market occurs through organized electronic trading network and over -the-counter. Moreover, the electronic trading network assists investors to buy and sell debt securities among themselves. Although, the stock market often commands media attention, however, bonds market is much larger than the stock markets.

Identification of Policies unique to each financial environment.

There are different polices guiding the financial environment. Policies guiding the auditing and financial reporting of business organizations are presented by the GAGAS (Generally Accepted Government Auditing Standards) that provides the framework and guidance for the high quality-auditing standard. Moreover, GAAP (Generally Accepted Accounting Principles) also set the rules and procedures required from all organizations to provide high quality accounting and financial statements. Adhering to GAAP and GAGAS policies is very critical to enhance quality financial records within financial environment. Following the WorldCom and Enron scandals that eroded investor's confidence within financial environment, the U.S. government enacted SOX (Sarbanes-Oxley) Act of 2002 that mandated all publicly traded business organizations to set up the internal control system to enhance quality of financial reporting. Moreover, SOX mandated public organizations to engage the service of external auditors to enhance the quality financial statements presented in the annual reports.

Apart from the auditing and accounting policies that organizations should follow, all stakeholders within financial environment should follow the rules and regulations guiding the conduct of financial environment. Within the stock market, board of directors should provide a quarterly dividend declaration policy that should take into account the company financial results, prevailing business conditions, company business model. More importantly, the listed companies should meet the listing criteria in the stock market, and the listing companies should monitor and enforce compliance with these standards. Within financial environment, taxes are charged on the gains realized from the financial market transaction....

Typically, many traders indulge in trading since it is a lucrative method to earn substantial profits. The trade policy requires traders to deduct all investing expenses from the tax to be paid to the Internal Revenue. Basically, the tax rate paid by trader is based on the capital gain tax rate and 28% may be charged on the short-term capital gains, where the tax rate for the long-term capital gain tax is 15%. Tax policies in financial environment require a trader to make the capital loss claim not more than $3,000. (Levine, 1991).
More importantly, governance is also implemented to encourage efficient use of financial resources within financial environment. As part of the governance strategy, the stock exchange utilizes wide varieties of regulatory bodies which include both private and public institutions to implement various regulatory approaches within financial market environment. Lee (2010) argue that CDS (central securities depositories), and CCPs (central counter-parties) and exchanges play a significant role in the operation of financial market. Typically, market infrastructure is determined by legal, formal and regulatory systems. The governance attributes within financial environment include the right of shareholders, and other market infrastructure institution. Recent financial crisis in the United States has heightened the interests of market participants on the infrastructure institution and financial market guiding the safe operations and investor protection. More importantly, extreme volatility within financial market also increases worries about the operation of financial institutions. Based on the public interest concerning the conduct of financial market institutions, the stock exchange market serves as governance entity that regulates the activities of financial market by establishing the trading rules as well as conducting the post-trade and real-time surveillance. More importantly, the stock exchange monitors the issuer disclosure and listing standard. (Konzelmann, 2009). Specifically, all major securities market have regulatory framework that monitor, implement rule-making as well as enforcing key functions of securities regulations.

Added to the policies discussed, financial policies provide the guideline for the conduct of financial operations. Financial policies are needed to regulate the conduct of financial operations since financial market is not the traditional market where the goods and services are sold.

Identification of prevalent Financial Management Practice in each Financial Environment

Financial management plays a critical role in overall management of business organizations. The primary role of financial management is to plan, utilize and acquire funds to maximize the efficiencies of corporate organizations. The key components of financial environment consist of financial markets, financial manager and investors. Investors play critical roles in the implementation of effective financial management practice in the capital market. Institutional investors use the financial management practice to make investment decision. Most importantly, investors use future cash flow to determine whether to invest their financial assets on the company stocks. A financial manager also determines whether to use debt for equity financing or to raise fund from the financial market. For example, when Dell Computer decided to expand its product line, the company obtained fund from institutional investors to finance its product line.

Despite the importance of financial management within financial environment, effective application of financial management practice is more difficult within healthcare environment than other industries.

Effectiveness of Financial Management practice within Healthcare organizations

Financial management provides the tools, concept and theory to make better decisions. The primary role of financial management is to plan, acquire and utilize funds to maximize the value and efficiencies of corporate organizations. However, healthcare organizations face challenges in implementing the financial management practice to enhance organizational efficiencies. In the present financial environment, healthcare organizations are increasingly operating within the hostile financial environment. The healthcare organizations are continuously facing financial risks because of the needs to comply with the government rules and regulations. The challenge of meeting the government regulations is numerous leaving the impact on the financial structure of healthcare organizations. Typically, management are facing daunting tasks to cut costs in the face of government regulations to deliver high quality healthcare. However, the services provided by healthcare providers…