Capital Budgeting in World Health Organization
World Health Organization is one of the largest healthcare organizations in the world, so it would be rather illustrative to examine the use of the capital budgeting based on its reports. In order to analyze the principles of capital budgeting that World Health Organization (WHO) used it is reasonable to study one of its recent financial reports. For this assignment the Financial Report and Audited Financial Statements for the year ended 31 December 2014 was chosen (World Health Organization, 2015). The reasons for choosing this exact report are the facts that it is rather recent and clearly illustrates the principles of capital budgeting in WHO in one of the recent years.
The report includes the description of several important financial aspects, such as cash flow or comparing budget with the actual expenses. However, the most important section for the current research would be the one that focuses on investments, as this part is the most descriptive of the aspect of capital budgeting. Even though in 2014 most of the investments were based on the short-term priorities and did not require using the principles of capital budgeting, WHO still made some large long-term investments, which would be a perfect example of the capital budgeting. For instance, the largest investments were headed towards the development of such programs as UNAIDS, UNITAID, International Computing Centre, Staff Health Insurance and so on. These programs made up the largest part of WHO’s investments in 2014 and are clear examples of the capital budgeting use because of the number of reasons. First, these programs have existed for a relatively long time till today, so they create an image of the organization in a certain way. Second, they have already proven their reliability, which made them a rather profitable branch of investment.
Overall, in 2014 World Health Organization used capital budgeting while planning to invest in the development of its own programs, which have already proven their profitability.
World Health Organization,. (2015). Financial Report and Audited Financial Statements for the year ended 31 December 2014. Sixty-eights World Health …