# Final to Hsm/260

Topics: Non-profit organization, Fundraising, Non-profit organizations Pages: 9 (2165 words) Published: July 24, 2010

Analyzing Financial Statements
Shelby Underhill
University of Phoenix

Title Page………………………………………………………………1 Table of Contents……………………………………………………...2 Abstract………………………………………………………………..3 Calculating Ratios……………………………………………………4-7 Explaining Ratios………………………………………………………8 Calculating Costs…………………………………………………….9-11 Explaining Budgets…………………………………………………12-13 Explaining Funding…………………………………………………14-16 References……………………………………………………………..17

Abstract
In any organization you will deal with money, it is part of the game. Yet knowing how to make sure the organization is making money, losing money or even breaking even can assure that the organization will be around for longer. It usually takes large amounts of money to run an organization, even a small one. Knowing where those funds come from, how to spend them, what you should spend them on, and how to make sure you are making a profit, knowing how to run an organization. Analyzing is the key factor, current ratio, long term ratio, program ratio, expense ratio, general management ratio are all common place in finance. Knowing how to solve for these will help anyone in the long run. .

Analyzing Financial Statements

XYZ Non-Profit Corporation 2003
Current Ratio:
Current ratio= Current assets/ Current liabilities

Long Term Solvency Ratio:
Long Term solvency ratio= total assets/ total liabilities

Contribution Ratio:
Contribution ratio= largest revenue/ total revenues

Program/Expense Ratio:
Program/Expense Ratio= total program expense/ total expenses

General and Management/Expense Ratio:
General and management/expense ratio= Total general and management expenses/ total expenses

Revenue/Expense Ratio:
Revenue/Expense Ratio= total revenues/ total expenses

XYZ Non-Profit Corporation 2004
Current Ratio:
Current ratio= Current assets/ Current liabilities

Long Term Solvency Ratio:
Long Term solvency ratio= total assets/ total liabilities

Contribution Ratio:
Contribution ratio= largest revenue/ total revenues

Program/Expense Ratio:
Program/Expense Ratio= total program expense/ total expenses

General and Management/Expense Ratio:
General and management/expense ratio= Total general and management expenses/ total expenses

Revenue/Expense Ratio:
Revenue/Expense Ratio= total revenues/ total expenses

XYZ Non-Profit Corporation 2002
Current Ratio:
Current ratio= Current assets/ Current liabilities

Long Term Solvency Ratio:
Long Term solvency ratio= total assets/ total liabilities

Contribution Ratio:
Contribution ratio= largest revenue/ total revenues

Program/Expense Ratio:
Program/Expense Ratio= total program expense/ total expenses

General and Management/Expense Ratio:
General and management/expense ratio= Total general and management expenses/ total expenses

Revenue/Expense Ratio:
Revenue/Expense Ratio= total revenues/ total expenses

Every ratio is important to an organization they help determine whether or not the organization is making money or losing money. The purpose of the current ratio is to assess a private nonprofit organization’s liquidity. The purpose of long-term solvency ratio is to assess the ability of a private nonprofit organization to pay annual expenses as they come due. The purpose of contribution ratio is to assess the organizations dependency on its major revenue source. The purpose of the programs/expense ratio is used by donors to make more informed decisions about the monies donated or granted. The purpose of the general and management/expense ratio is to determine the proportion of the organization’s expenses that go toward the administration of the private nonprofit organization. The purpose of the revenue/expense ratio is to determine if an organization is breaking even, making money, or losing money. Over the three years that XYZ Non-Profit Corporation has been in business they have...