# Analyzing Financial Statements

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• Published : November 11, 2012

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HSM 260

Analyzing Financial Statements

By Darrell L. Lee

Axia College of University of Phoenix

October 31, 2012

Instructor: Danette Brown

Calculate the following: Current ratio< Long-term solvency ratio, contribution ratio, programs/expense ratio, general and management/expense ratio, and revenue/ expense ratio for the years 2003 and 2004.

Current ratio = current Assets

Current Liabilities

2003

Current Ratio = [pic]

Current Ratio = 0.87

2004

Current Ratio = Current Assets

Current liabilities

Current Ratio = [pic]

Current Ratio = 0.90 (rounded –up)

Long-Term Solvency Ratio

Long- Term… Solvency Ratio = Total Assets

Total Liabilities

Long- Term… Solvency Ratio = [pic]

Long- Term… Solvency Ratio = 1.38

2003

Contribution… Ratio = Last revenue source

Total Revenue

Contribution… Ratio = [pic]

Contribution… Ratio = 0.51 (rounded-up) 2004

Contribution… Ratio = Last revenue source

Total… Revenue

Contribution… Ratio = [pic]

Contribution… Ratio =0.49

Program Expense Ratio

2003

Program/ Expense Ratio = Total Revenue

Total Expense

Program/Expense Ratio = [pic]

Program/Expense Ratio = 1.0

2004

Program/Expense Ratio = Total Revenue

Total Expense

Program/ Expense Ratio = [pic]

Program/ Expense Ratio = 1.11

2003

Management/Expense Ratio = Total General and Management Expense

Total Expenses

Management/Expense Ratio = [pic]

Management/Expense Ratio = 0.28 (rounded –Up)

2004

Management/Expense Ratio = Total General and Management Expense

Total Expenses

Management/Expense Ratio = [pic]

Management/Expense Ratio = 0.33 (Rounded –up)

Revenue/Expense Ratio

2003

Revenue/Expense Ratio = Total Revenue

Total Expenses

Revenue/Expense Ratio = [pic]

Revenue/Expense Ratio = 0.94

2004

Revenue/Expense Ratio = Total Revenue

Total Expenses

Revenue/Expense Ratio = [pic]

Revenue/Expense Ratio = 1.11

Include the current ratio, long-term solvency ratio, contribution ratio, program/expense ratio, general and management/expense ratio, and revenue/expense ratio calculated in week four Assignment.

2002

Current Ratio = Current Assets

Current Liabilities

Current Ratio = [pic]

Current Ratio = 0.75

2002

Long-term Solvency Ratio = Total Assets

Total Liabilities

Long-term Solvency Ratio = [pic]

Long-term Solvency Ratio = 1.26

2002

Contribution Ratio = Last Revenue Source

Total Revenue

Contribution Ratio = [pic]

Contribution Ratio = 0.53

Program/Expense Ratio = Total Revenue

Total Expense

Program/Expense Ratio = [pic]

Program/Expense Ratio = 1.0 (Rounded –up)

2002

Management/Expense Ratio = Total General and Management/Expense

Total Expenses

Management/Expense Ratio = [pic]

Management/Expense Ratio = 0.30 (Rounded –Up)

2002

Revenue/Expense Ratio = Total Revenue

Total Expense

Revenue/Expense Ratio = [pic]

Revenue/Expense Ratio = 0.98

Provide a 200- to 300-word explanation of the importance of each ratio for all three years listed in Appendix D. Include a statement of whether the organization’s financial picture has improved or not within the three-year period specified in Appendix D.

Appendix D lists 5...