Analyzing Financial Statements
Final Project: Analyzing Financial Statements
By: Whitney Allen
(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
2003
2004
* Long-Term Solvency Ratio
2003
2004
* Contribution Ratio
2003
2004
* Programs/Expense Ratio
2003
1.0
2004
1.11
* Management/Expense Ratio 2003
2004
* Revenue/Expense Ratio
2003
2004
(Week Four Assignment)
2002
2002
2002
2002
2002
2002
(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 ratios that are each important in different ways. A non-profit organization uses the current ratio to evaluate its assets. These assets could be cash or other things such as donations and grants. This allows them to better understand what the company is worth by determining the company’s assets. A non-profit organization uses the long-term solvency ratio to find out if they are likely to be able to pay their bills and continue services in the future. This ratio will tell the non-profit exactly how much they depend on contributions from other sources outside of their organization. The organization uses the management/expense ratio to tell them how much they should set aside for administrative costs, besides their program costs. If they save too much money in this category, they spend less money on their programs. Meaning more money is going to management and the programs are not getting enough. This could result in a negative impact on the clients and the future of the organization. The revenue/expense ratio tells them how much funding they have used to support their fund-raising programs and
By: Whitney Allen
(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
2003
2004
* Long-Term Solvency Ratio
2003
2004
* Contribution Ratio
2003
2004
* Programs/Expense Ratio
2003
1.0
2004
1.11
* Management/Expense Ratio 2003
2004
* Revenue/Expense Ratio
2003
2004
(Week Four Assignment)
2002
2002
2002
2002
2002
2002
(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 ratios that are each important in different ways. A non-profit organization uses the current ratio to evaluate its assets. These assets could be cash or other things such as donations and grants. This allows them to better understand what the company is worth by determining the company’s assets. A non-profit organization uses the long-term solvency ratio to find out if they are likely to be able to pay their bills and continue services in the future. This ratio will tell the non-profit exactly how much they depend on contributions from other sources outside of their organization. The organization uses the management/expense ratio to tell them how much they should set aside for administrative costs, besides their program costs. If they save too much money in this category, they spend less money on their programs. Meaning more money is going to management and the programs are not getting enough. This could result in a negative impact on the clients and the future of the organization. The revenue/expense ratio tells them how much funding they have used to support their fund-raising programs and