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Analyzing Financial Statements
Part I Using Appendix B, calculate the following ratios: Current ratio Year Current ratio 2002 104,296÷139,01 7 = 0.75 2003 82,058 ÷ 93,975 = 0.87 2004 302,902÷337,03 3 = 0.90
Long-term solvency ratio Year Long-term solvency ratio 2002 391,270÷310,24 6 = 1.26 2003 359,863÷259,97 9 = 1.38 2004 699,004÷338,937 = 2.06
Contribution ratio Year Contribution ratio 2002 617,169÷1,165,0 65 = 0.53 2003 632,889÷1,244,2 61 = 0.51 2004 1,078,837÷2,191,24 3 = 0.49
Management/Expense ratio Year 2002 2003 2004
819÷1.23 Revenue/Expense ratio Year Revenue/Expens e ratio 2002 1.261÷1.000÷1.1 85.191.972.11 Part II Provide a 150. The contribution ratio is utilized to evaluate the dependence of a private nonprofit human service organization on its main income source.94 2004 2.to 200-word summary of the importance of each ratio from Part I. the long-term solvency ratio is calculated.Management/ Expense ratio 351.9184.108.40.206÷1.244. Liquidity signifies the level to which the organization has cash as well as other resources easily changeable into cash to cover existing working expenditures. 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. The liquidity of a private nonprofit human service organization can be found out by utilizing the current ratio. The idea of the revenue/expense ratio is to find out if a human service .30 371.008 = 0.6 81 = 0.316.28 445.13 1 = 0.316. Every dollar that goes for administration implies that one dollar less is on hand for programs and to give services to customers.065÷1.98 2003 1. 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. 681 = 0.101÷1.0 08 = 0. 131 = 1.
” Part III For the program suggested in Appendix B.000. or losing funds.202 $1.101.0 0 Fixed costs: 2002 Rent and utilities Telephone TOTALS $150. The revenue/expense ratio can be considered as the organization’s “earnings margin.00 $117.00 $174.00 $125.473.00 2004 $150.000. calculate the following: Variable costs: Year Payroll as well as benefits Goods Additional Supervision Total 2002 $417.00 $115.00 Break-even position: Average quantity of units (clientele) Average program income (calculated) 8.999.33 .00 $79.00 2003 $150.798.00 $1.526.organization is breaking even.000.000.000.888.000.787.011. earning funds.000.0 0 2004 $915. 460.623.00 $24.142.00 $371.0 0 2003 $520.00 $445.819.008.903.000.00 $174.00 $351.00 $320.069.00 $174.000.131.101.00 $171.00 $24.000.00 $24.681.00 $1.00 $1.004.
Human service organizations are usually utilizing three main budgeting methods. and program budgeting method.61x 19. Its main function is fiscal control. These three main budgeting methods are line-item budgeting method.66 9.65x = 174. The key of this type of budgeting is its ease. therefore. The line-item budget can be understood by anybody involved. Resource distribution discussions and decisions have a tendency to be framed .65 $174. performance. and program budgets in a 350. It is. 000. performance budgeting method.139 pieces Part IV Discuss the purpose. disadvantages.to 700word essay. It can be arranged for a human service organization as well as for one or more personal programs.P Piece price A Mean fixed costs Mean changeable costs for B each unit Formula for BEP BEP Px=A+Bx $ 179. the cost of that service.00 $1 60. or their employee costs.000 + 160. Following are the drawbacks of line-item budgeting method: Line-item budgets don’t say anything regarding how much service a human service organization renders.61 179. and type of feedback provided by line-item.000 x = 9138. advantages. the quantity of outcomes the organization achieved. used as a means in controlling expenses.04x = 174. The most commonly used budgeting method is line-item budgeting method.
program services. and divisions of labor. Quality of services can also be tackled using outputs and outcomes which establish the level of services and how the quality is influenced through an increase in backing or a decrease. evaluations of program outcomes. and they increase the intensity of argument from service as well as efficiency worries to clients as well as effectiveness worries. The article of the fiscal strength and supervision of the agency is crucial in using cost for each output and outcome computations. the disadvantage of this kind of budgeting system is that human service organizations must employ refined cost analysis methods in order to find out the full cost of a program and to get exact unit costs. as well as the cost to the program of getting outcomes. Benefit s of program budgeting systems are that they give report about the quantity of (client) outcomes got by a human service program as well as the employee costs. performance assessment. as well as program efficiency. and whether they are or they are not financially good to the agency. Decisions can be made considering fixed and variable costs and how those influence the revenues. Performance budgeting scheme can be done at the program level only. . Outputs and outcomes give the information concerning the services. Program budgeting systems is to relate organization expenses to programs. The function of a performance budgeting system is to relate organization expenses to programs by deciding a program output (or item of service). the total program cost. are organizations should use refined cost analysis methods in order to find out the full cost of a program and to get exact unit costs. Conversely. Performance budgeting gives insights into the efficiency of a human service program. including determination of cost for each outcome. and that good outcome performance measures are often hard to build up. Its drawbacks. Cost for each output and outcome computations can give insight into a human service agency’s fiscal management plan to assess whether or not the objectives and goals are being met to render the services which support the mission. how they are executed. and the cost for each output or cost for each unit of service. nonetheless. can be decided to guarantee that funds are distributed correctly. services. Part V How can knowing the cost per output and cost per outcome benefit a human services agency? The sum of costs for all units of service is considered as cost for each outcome. Its benefits are: they give information on the subject of the amount of service rendered by a human service program as well as the employee costs and calculation of the cost for each output or for each unit of service and they lift the intensity of argument from line-items to program costs.by the line-items themselves since no additional information is obtainable. programs. Programming.
Both the program and performance budget use signs to assess operational and fiscal performance. and public safety. Annual Campaigns just mean a well-known fund-raising effort through direct mails or telephone solicitations to companies. There are many conventional methods used for fund-raising. fund-gathering endeavors are linked with non-profit organizations. and two types of entrepreneurial approaches to fund development. as well as individuals. public works. Program areas frequently used by government bodies include general government. human services. while a program budget highlights the advantages that the local community gets from municipal expenditures. charity-organizations. the agency couldn’t know probably how much to charge for their services. leisure services. the agency will most definitely be losing money. A performance budget highlights management efficiency.. The stress of program projects is on the achievement of long-term local community objectives.to 700-word response to the following: Identify and describe two types of traditional approaches to fund development. The procedure of fundraising is to seek and receive money or gifts by requesting contributions from governmental organizations. The key direction of the performance budget is that of improving the in-house supervision of the program in addition to controlling costs. corporations. individuals. organizations. Without knowing this. Funds are distributed to major program areas by the program budget. however the budgets have a special focus. concentrating on the projected results of services and activities to be continued. including Client Donations and Annual Campaigns. Generally. Part VI Provide a 350. What is the primary difference between a performance budget and a program budget? Why does a human services agency need to know this information? A performance budget distributes money to various programs within an agency as well as provides information about the service level on which the budget is predicated. 1. etc. The basic purpose of annual campaigns is to push the earlier . The service level is known by the utilization of performance measures.If you are unaware of the costs to get a certain outcome/output. Annual Campaigns: These usually take place in the last months of a year when individuals and corporations are expected to donate generously to reduce their taxable income.
2. a greater amount of knowledge along with expertise is necessary however it doesn’t succeed to generate a big amount of revenues during a brief period of time. etc. With the assistance of this system. 2. programs like the Bequest Programs are needed for Life Income Programs. to a non-profit human service organization or program after their deaths. During performance of these programs. as well as money. .donors into making additional donations and also increasing the sum of their donations. A well-designed fund-raising effort facilitates the clients to donate something for maintaining the cost of the program separately from the normal raising of revenues. Bequest Program: This long term fiscal development plan is a shape of planned giving where persons declare in their wills or estate plans concerning transferring particular properties. To fight the persistently increasing struggle for financial support. Client Donations: This conventional fund-raising endeavor refers to the independent contributions made by service recipients to human service organizations. persons can convey their thanks towards a human service organization for the services received by them as well as their dear ones. These programs are also alternatives of planned giving and are categorized into two kinds-Charitable remainder trusts and pooled income funds. 1. innovative methods are used by the programs as well as human service organizations. bonds. stocks. Life Income Programs: the services of an efficient expert linked to the area of fund development or good relations with a community foundation/trust department of bank. It is said that services similar to specific transportation. in-door care. are better placed to use the bequest programs to raise funds.
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