HSM 260
Current Ratio
Table [ 1 ] | | 2002 | 2003 | 2004 | Current Ratio | Current Assets | $104,296.00 | 0.75 | $82,058.00 | 0.87 | $302,902.00 | 0.43 | | Current Liabilities | $139,017.00 | | $93,975.00 | | $699,004.00 | |
An organization’s current ratio shows how liquid the assets of the agency are by comparison to the short term debts that the agency must pay to continue its operations. This ratio is calculated by taking the assets that can be converted to cash within a year (current assets) and dividing it by the liabilities that are either currently due or will become due within a year (current liabilities). The current ratio, ideally, should be at 1.0 …show more content…
This number is interpreted to tell how much of a profit a non-profit agency has. In spite of the fact that non-profits do not exist to make money, they also must be careful not to lose so much money that they are unable to continue to provide programs and services. There is no maximum number that a human services agency should not exceed and some excess funds are even recommended to be set aside for financing replacements for worn or malfunctioning assets used for the programs, expansion activities, or unforeseen emergency expenses. This calculation should be at a minimum of 1.0 for the organization to not lose any money. If the number is higher it should not be too much higher, because the higher this number is shows that there are excess funds available that could have been used for programs and …show more content…
People from the community and surrounding areas could welcome the chance to pull together and host a Christmas feast and auction. Dinners could be purchased at a nominal fee for individuals and families. Businesses from the area could be encouraged to join in and support the cause by donating items to auction after dinner and then we could hold a Christmas dance. Getting a local news personality to come in as auctioneer would definitely buy the event some mention on our local stations resulting in advertising the event. Because the XYZ Corporation has been meeting the needs of the medically indigent for three years now are we are recognized as a 501(c) (3) nonprofit organization we could hold a joint fund raising activity with one of our affiliates such as United Way of America (Martin, 2001). By conducting our annual donor renewal campaign through our volunteers efforts our attempt would be to reach as many of our existing donors either through our mailing list, friends, program members, local business, or by telephone solicitations who may which to make contributions and are in need of reducing their taxable income (Martin, 2001) .
Conclusion
The break-even point of an agency shows how many clients the agency will need in order to meet its costs. Once the break-even point is met then any additional clients would provide profit for the organization. The