Ratios Program expense Fund-raising efficiency Working capital (days) Days cash on hand 85.1 Answer is not complete. ABC XYZ Stronger Ratio % 73.6 % ABC Not-for-Profit XYZ Not-for-Profit days days XYZ Not-for-Profit days days XYZ Not-for-Profit
Ratios Program expense Fund-raising efficiency Working capital (days) Days cash on hand 85.1 Answer is not complete. ABC XYZ Stronger Ratio % 73.6 % ABC Not-for-Profit XYZ Not-for-Profit days days XYZ Not-for-Profit days days XYZ Not-for-Profit
Chapter12: Corporate Valuation And Financial Planning
Section: Chapter Questions
Problem 1Q
Question
Presented below are financial statements (except
ABC Not-for-Profit | XYZ Not-for-Profit | |||
---|---|---|---|---|
Statement of Activities | Unrestricted | Donor-Restricted | Unrestricted | Donor- Restricted |
Revenues | ||||
Program service revenue | $ 5,595,000 | $ 2,250,000 | ||
Contribution revenues | 3,327,500 | $ 750,000 | 3,200,000 | |
Grant revenue | 96,000 | $ 1,025,000 | ||
Net gains on endowment investments | 17,500 | |||
Net assets released from restriction | ||||
Satisfaction of program restrictions | 450,000 | (450,000) | 377,000 | (377,000) |
Total revenues | 9,390,000 | 396,000 | 5,827,000 | 648,000 |
Expenses | ||||
Education program expenses | 5,525,000 | 1,680,000 | ||
Research program expense | 1,350,000 | 2,232,000 | ||
Total program service expenses | 6,875,000 | 3,912,000 | ||
Fund-raising | 550,000 | 412,000 | ||
Administration | 650,000 | 990,000 | ||
Total supporting service expenses | 1,200,000 | 1,402,000 | ||
Total expenses | 8,075,000 | 5,314,000 | ||
Increase in net assets | 1,315,000 | 396,000 | 513,000 | 648,000 |
Net assets, January, 1 | 4,208,000 | 759,000 | 1,037,500 | 320,000 |
Net assets, December, 31 | $ 5,523,000 | $ 1,155,000 | $ 1,550,500 | $ 968,000 |
Statement of Net Assets | ABC Not-for-Profit | XYZ Not-for-Profit |
---|---|---|
Current assets | ||
Cash | $ 205,000 | $ 356,000 |
Short-term cash equivalents | 265,000 | 99,000 |
Supplies inventories | 32,000 | 150,000 |
Receivables | 439,500 | 188,500 |
Total current assets | 941,500 | 793,500 |
Noncurrent assets | ||
Noncurrent pledges receivable | 173,000 | 86,000 |
Endowment investments | 2,590,000 | |
Land, buildings, and equipment (net) | 3,175,000 | 1,768,000 |
Total noncurrent assets | 5,938,000 | 1,854,000 |
Total assets | $ 6,879,500 | $ 2,647,500 |
Current liabilities | ||
Accounts payable | $ 23,000 | $ 129,000 |
Total current liabilities | 23,000 | 129,000 |
Noncurrent liabilities | ||
Notes payable | 178,500 | |
Total noncurrent liabilities | 178,500 | |
Total liabilities | 201,500 | 129,000 |
Net Assets | ||
Unrestricted | 5,523,000 | 1,550,500 |
Donor restricted for purpose | 155,000 | 0 |
Donor restricted for endowment | 1,000,000 | 968,000 |
Total net assets | 6,678,000 | 2,518,500 |
Total liabilities and net assets | $ 6,879,500 | $ 2,647,500 |
Required:
-
Calculate the following ratios (assume
depreciation expense is $480,000 for both organizations and is allocated among program and supporting expenses):- Program expense.
- Fund-raising efficiency.
- Days cash on hand.
Working capital (expressed in days).
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