5063- Financial Ratios

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Trine University *

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5063

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Finance

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Jan 9, 2024

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2

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1 AMERICAN REDCROSS FINANCIAL RATIOS Trine University 5063 Dr. Rob Shah April 6, 2023 Complete at least 4 various ratios to help prove the financial stability of the organization. (in Thousands) The American Redcross has $1,117,969 in Current assets and $494,351 in current liabilities. This essentially means that they have a current ratio of 2.2614. This is a good indicator because a current ratio of 2:1 or higher usually means the nonprofit has enough assets to cover its short-term obligations. The nonprofit also has a debt of $657,614k and total assets of $ 3,668,500 this means that the nonprofit has a debt-to-asset ratio of 17%. For a nonprofit like the American Redcross, this seems reasonable because it is indicating that the organization is not relying on debt in order to run its day-to-day operations. Next, we can generate the fundraising efficiency ratio from the total fundraising expense. We derive this from the amount received in contributions of $2,953,488 by the amount that the organization spent on fundraising of $324,325. This means that with a funding ratio of 17.85, they receive $17.85 for each dollar they spend on funding.
2 The final ratio would be the Savings Indicator Ratio which measures the ability of the organization to add to its net asset. The American Red Cross has $3,130,644 in revenue and $2,836,486 which means that they have a 0.104 saving indicator ratio. In a nonprofit, this means that they can save more money from their operations
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