Ferland Milestone One

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1 Milestone One: Financial Analysis Kylie Ferland Southern New Hampshire University OL 445-H3935 Dr. Tomecca Williams January 21, 2024

2 Emerald City Community Economic Development Corporation (ECEED) has spent the last past 3 years, from 2012 to 2014, getting their finances in order. In 2012, their expenses were causing them to operate on a $123,000 deficit. In 2014, their expense allowed them to operate with $410,000 in a net profit. That means that they have reduced their expenses by $453,000. This shows that the organization has had considerable growth over the past three years. One thing to note is that ECEED has noted that each of the three buildings that the own have increased at 5% each year for the liabilities. This has had an impact on the assets each year. Emerald City Economic Development Corporation has collected much of their funding from the disability programming fees, development fees, and their school program. The disability program fees accounts for 28.78% of the revenue; the school program income accounts for 25.18% of the revenue; and the development fees accounts for 17.99% of the revenue. The largest expense for ECEED is the employees’ salaries. It takes 68.37% of the expenses. ECEED also has large balances on the real estate notes. This keeps their long-term liabilities high, which eliminates a lot of the room for net profit. When you look at the overall health of ECEED, there is room for improvement. As one looks at the financial statements of a nonprofit, they will see that an organization’s assets will be greater than their liabilities. You will also see that the net assets will be large enough to allow the organization to achieve their goals in the long-term (Scarano, 2022). ECEED does not show this and their financial position is not great in the long-term. The liquid assets are sufficient enough to cover their expenses at the moment, however, the real estate notes will continue to be an issue unless ECEED is able to increase revenue drastically. Even though they have been able to increase their net profit margins, it will be risky if they cannot increase the net assets further.

3 It is recommended to increase the revenues by at least 3% over the next five years to be able to stay ahead of the expenses. There will need to be more done though. I believe that there needs to be more fundraising done on the part of ECEED. They cannot always guarantee grants and donations from the community. Fundraising will do two things for the organization. This will allow the organization to raise the money to have a larger profit margin, which will allow them to stay ahead of the increase in expenses over the course of the next five years. It will also allow for great publicity and marketing. This will allow them to be able to get more donations from the local community and the large corporations in the area. If they were to do this, then they can stay ahead of the expenses and possibly expand programing in the future.

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4 References Scarano, J. (2022, November 4). Statement of Financial Position: What are Nonprofit Net Assets? Araize. https://araize.com/nonprofit-statement-of-financial-position/

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