Analyzing Financial Statements
FINAL PAPER:
Axia College
HHS 265
Analyzing Financial Statements
Part I
Using Appendix B, calculate the following ratios:
Current ratio
Year
2002
2003
2004
Current ratio
104,296÷139,017 = 0.75
82,058 ÷ 93,975 = 0.87 302,902÷337,033 = 0.90
Long-term solvency ratio
Year
2002
2003
2004
Long-term solvency ratio
391,270÷310,246 = 1.26
359,863÷259,979 = 1.38
699,004÷338,937 = 2.06
Contribution ratio
Year
2002
2003
2004
Contribution ratio
617,169÷1,165,065 = 0.53
632,889÷1,244,261 = 0.51
1,078,837÷2,191,243 = 0.49
Management/Expense ratio
Year
2002
2003
2004
Management/ Expense ratio
351,000÷1,185,008 = 0.30
371,101÷1,316,681 = 0.28
445,819÷1,972,131 = 0.23
Revenue/Expense ratio
Year
2002
2003
2004
Revenue/Expense ratio
1,165,065÷1,185,008
= 0.98 1,244,261÷1,316,681 = 0.94
2,191,243÷1,972,131 = 1.11
Part II
Provide a 150- to 200-word summary of the importance of each ratio from Part I.
The liquidity of a private nonprofit human service organization can be found out by utilizing the current ratio. Liquidity signifies the level to which the organization has cash as well as other resources easily changeable into cash to cover existing working expenditures.
To find out the long-range fiscal solvency of the private nonprofit human service organization and its capability to pay yearly expenses as they become due, the long-term solvency ratio is calculated.
The contribution ratio is utilized to evaluate the dependence of a private nonprofit human service organization on its main income source.
The management/expense ratio is utilized to find out the ratio of private nonprofit human service organization’s general expenditure that goes to management or administration expenditure. Every dollar that goes for administration implies that one dollar less is on hand for programs and to give services to customers.
The idea of the revenue/expense ratio is to find out if a human service
Axia College
HHS 265
Analyzing Financial Statements
Part I
Using Appendix B, calculate the following ratios:
Current ratio
Year
2002
2003
2004
Current ratio
104,296÷139,017 = 0.75
82,058 ÷ 93,975 = 0.87 302,902÷337,033 = 0.90
Long-term solvency ratio
Year
2002
2003
2004
Long-term solvency ratio
391,270÷310,246 = 1.26
359,863÷259,979 = 1.38
699,004÷338,937 = 2.06
Contribution ratio
Year
2002
2003
2004
Contribution ratio
617,169÷1,165,065 = 0.53
632,889÷1,244,261 = 0.51
1,078,837÷2,191,243 = 0.49
Management/Expense ratio
Year
2002
2003
2004
Management/ Expense ratio
351,000÷1,185,008 = 0.30
371,101÷1,316,681 = 0.28
445,819÷1,972,131 = 0.23
Revenue/Expense ratio
Year
2002
2003
2004
Revenue/Expense ratio
1,165,065÷1,185,008
= 0.98 1,244,261÷1,316,681 = 0.94
2,191,243÷1,972,131 = 1.11
Part II
Provide a 150- to 200-word summary of the importance of each ratio from Part I.
The liquidity of a private nonprofit human service organization can be found out by utilizing the current ratio. Liquidity signifies the level to which the organization has cash as well as other resources easily changeable into cash to cover existing working expenditures.
To find out the long-range fiscal solvency of the private nonprofit human service organization and its capability to pay yearly expenses as they become due, the long-term solvency ratio is calculated.
The contribution ratio is utilized to evaluate the dependence of a private nonprofit human service organization on its main income source.
The management/expense ratio is utilized to find out the ratio of private nonprofit human service organization’s general expenditure that goes to management or administration expenditure. Every dollar that goes for administration implies that one dollar less is on hand for programs and to give services to customers.
The idea of the revenue/expense ratio is to find out if a human service