Financial Ratios
The creditable performance calculation for the Valley of the Sun United Way (VSUW) is used to guarantee that their organization will perform at their most likely current ratio, long-term solvency ratio, contribution ratio, and general and management/expense ratio (Goetsch & Davis, 2010).
The current ratio will enable VSUW to easily see their current expenses that may be aquired and make sure that the organization has enough resources to pay all of their current obligations. VSUW will be able to see if there is ever a need to liquefy their assets to keep them from being in debt as well as keep them within their budget so that they are able to meet their expenditures. If VSUW can apply the long-term solvency ratio it will help them to keep current on their expenses and pay annual expenses as they incur. As indicated by the financial statements, VSUW has a positive credit rating and when they would apply this ratio they would be able to maintain in good standing and have room to demand accommodations as the case maybe (United Way, 2010).The adaptation of the current ratio and the long-term solvency ratio present matching short-term and long-term position of the financial condition of a private nonprofit human service agency (Goetsch & Davis, 2010). Another ratio that VSUW could use would be the contribution ratio. The objective of the contribution ratio is to evaluate the organization’s reliance on its main revenue supply. The percentages of contributions collected for VSUW show the decreased contributions in the previous year and VSUW can focus on collecting pledges or increase their provision for allowance for uncollected pledges in the current year. VSUW needs to keep in mind that if any of the revenue supply may be lost or a foundation grant is not renewed, the financial feasibility of the organization probably is in critical condition (Goetsch & Davis, 2010).
VSUW needs to keep up on contact with their revenue supply and focus



References: Goetsch, D. L., & Davis, S. B. (2010). Quality management for organizational excellence: Introduction to total quality (6th ed.). Upper Saddle River, NJ: Pearson.  United Way. (2010). Valley of the Sun United Way. Retrieved from http://www.vsuw.org/

You May Also Find These Documents Helpful

  • Best Essays

    Financial Ratios and Ratio

    • 4182 Words
    • 17 Pages

    1. Introduction This report provides a financial quarterly trend analysis for Costco Wholesale Corporation, Inc. founded in 1983. Costco Wholesale Corporation is the seventh largest retailer company in the world. As of July 2012, it was the fifth largest retailer, and the largest membership warehouse club chain in the United States ("Wikipedia, the free," 2011). Costco Wholesale Corporation’s stock is publicly traded on the National Association of Securities Dealers Automated Quotation (NASDAQ)…

    • 4182 Words
    • 17 Pages
    Best Essays
  • Good Essays

    Financial Ratios

    • 2008 Words
    • 9 Pages

    http://www.investopedia.com/university/ratios/liquidity-measurement/default.asp LIQUIDITY RATIOS: The first ratios we'll take a look at in this tutorial are the liquidity ratios. Liquidity ratios attempt to measure a company's ability to pay off its short-term debt obligations. This is done by comparing a company's most liquid assets (or, those that can be easily converted to cash), its short-term liabilities. In general, the greater the coverage of liquid assets to short-term liabilities the…

    • 2008 Words
    • 9 Pages
    Good Essays
  • Satisfactory Essays

    financial ratios

    • 1144 Words
    • 5 Pages

    FINANCIAL RATIOS Gross Profit to Sales (Gross Profit Ratio): profitability ratio that shows the relationship between gross profit and total net sales revenue. Gross margin/Net sales The gross margin is not an exact estimate of the company's pricing strategy but it does give a good indication of financial health. Without an adequate gross margin, a company will be unable to pay its operating and other expenses and build for the future. In general, a company's gross profit margin should be stable…

    • 1144 Words
    • 5 Pages
    Satisfactory Essays
  • Powerful Essays

    Financial Ratios

    • 7027 Words
    • 29 Pages

    Financial Reporting Problem: The Procter & Gamble Company “On my honor, as a student, I have neither given nor received unauthorized aid on this academic work.” _____________ _____________ _____________ _____________ Financial Reporting Financial Reporting Problem Fall 2011 [pic] In order to evaluate your understanding of the use of accounting information, you are asked to analyze the 2007…

    • 7027 Words
    • 29 Pages
    Powerful Essays
  • Satisfactory Essays

    Financial Ratios

    • 655 Words
    • 3 Pages

    Interpreting Financial Results FIN/571 July 22, 2013 Interpreting Financial Results Liquidity: Current Ratio Parrino, Kidwell, & Bates (2012) detail the current ratio as current assets divided by liabilities. The current ratio identifies a firm’s potential to pay short-term liabilities; higher liquidity is a good sign for potential creditors (Parrino et al., 2012). At the same time, however, the current ratio should not greatly exceed benchmarks of other competitors (Parrino et al., 2012)…

    • 655 Words
    • 3 Pages
    Satisfactory Essays
  • Better Essays

    Financial Ratios

    • 1286 Words
    • 6 Pages

    GROUP 1 REPORT FINANCIAL RATIOS Financial ratios are useful indicators of a firm’s performance and financial situation. Most ratios can be calculated from information provided by the financial statements. Financial ratios can be used to analyze trends and to compare the firm’s financials to those of other firms. In some cases, ratio analysis can predict future bankruptcy. SOURCES OF DATA FOR FINANCIAL RATIOS     Balance Sheet Income Statement Statement of Cash Flows Statement of Retained…

    • 1286 Words
    • 6 Pages
    Better Essays
  • Good Essays

    Financial Ratio

    • 3640 Words
    • 15 Pages

    a good indicator of the cost of using those buildings and equipment? Compare that situation to a company with new buildings and equipment where there will be large amounts of depreciation expense. The remainder of our explanation of financial ratios and financial statement analysis will use information from the following income statement: Example Corporation Income Statement For the year ended December 31, 2011 | | Sales (all on credit) | $500,000 | Cost of Goods Sold | 380,000…

    • 3640 Words
    • 15 Pages
    Good Essays
  • Good Essays

    Financial Ratios

    • 360 Words
    • 2 Pages

    The financial ratios are: Liquidity Ratio- The firms ability to satisfy the short term obligations. (Gitman, 2007) Activity ratio- That measure the speed with which various accounts are converted into sales or cash, inflows or outflows. (Gitman, 2007) Debt ratio- That measures the proportion of total assets financed by the firms creditors. (Gitman, 2007) Profitability ratio- measures enable the analyst to evaluate the firms profits with respect to a given level of sales a certain level of assets…

    • 360 Words
    • 2 Pages
    Good Essays
  • Good Essays

    Financial Ratio

    • 1799 Words
    • 8 Pages

    adequacy of income by comparing it to other items reported on the financial statements. 1) Return on Equity: One of the most important profitability ratios is return on equity (ROE). ROE is the amount of net income returned as a percentage of shareholders equity. Return on equity measures a corporation's profitability by revealing how much profit a company generates with the money shareholders have invested. The return on equity ratio is computed as follows: Return on Equity = | Net Income |…

    • 1799 Words
    • 8 Pages
    Good Essays
  • Good Essays

    Financial Ratios

    • 407 Words
    • 2 Pages

    TABLE OF CONTENTS INTRODUCTION 3 MANAGERIAL FINANCE: 3 FINANCIAL STATEMENTS ANALYSIS: 3 RATIO ANALYSIS: 3 FAUJI CEMENT BALANCE SHEET AND PROFIT AND LOSS ACCOUNT 4 RATIO ANALYSIS: 9 INTRODUCTION MANAGERIAL FINANCE: • Managerial finance is concerned with the duties of the financial manager in the business firm. • The financial manager actively manages the financial affairs of any type of business, whether private or public, large or small, profit-seeking or not-for-profit…

    • 407 Words
    • 2 Pages
    Good Essays