Paper Topic:

Final project HHS 265

Part I

Using Appendix B , calculate the following

Current ratio Current Assets / Current Liabilities

2002 Current ratio Current Assets (2002 (2002 ) Current Liabilities 104296 .00 139017 .00 0 .9

2003 Current ratio Current Assets (2003 (2003 ) Current Liabilities 82058 .00 93975 .00 0 .8

2004 Current ratio Current Assets (2004 (2004 ) Current Liabilities 302902 .00 337033 .00 0 .5

Long-term solvency ratio (Debt Ratio Long-term solvency ratio (Debt to Equity Ratio Long Term Debt /Equity

2002 Debt ratio 2003 Debt ratio 2004 Debt Ratio 2002 Debt to Equity ratio

Long Term Debt (2002 (2002 2003 Debt to Equity ratio Long Term Debt (2003 (2003 2004 Debt to Equity ratio Long Term Debt (2004 (2004 Contribution ratio 2002 Contribution ratio Revenue 617169 .00 1165065 .00 0 .3

2003 Contribution ratio Revenue 632889 .00 1244261 .00 0 .8

2004 Contribution ratio Revenue 1078837 .00 2191243 .00 0 .2

Management /expense ratio Management expenses 2002 Management /expense ratio Management expenses (2002 (2002 )expenses 351000 .00 1185008 .00 0 .2

2003 Management /expense ratio Management expenses (2003 (2003 )expenses 371101 .00 1316681 .00 0 .3

2004 Management /expense ratio Management expenses (2004 (2004 )expenses 445819 .00 1972131 .00 0 .6

Revenue /expense ratio 2002 Revenue /expense ratio 2003 Revenue /expense ratio 2004 Revenue /expense ratio Part II

Provide a 150- to 200-word summary of the importance of each ratio from Part I

Current ratio is defined as the comparison between the current assets and current liabilities (Centium , Inc , 2008 . As good current ratio would be a ratio of 2 :1 . Having this ratio means that there are adequate short-term assets to meet short term liabilities . Having a ratio lower than 2 :1 indicates that there may be liquidity problems while a ratio greater than 2 :1 suggests that there is overtrading (Credit Research Foundation [CRF] , 1999

Long term solvency ratios determine the survival of a nonprofit organization for many years . Its main purpose is to know whether a nonprofit organization is on a road to bankruptcy . Long term solvency can be further divided to long term debt ratio , debt to equity ratio liabilities to assets ratio , and other ratios falling on this category (CRF , 1999

Contribution ratio measures how donation-dependent a nonprofit organization is . Higher value for this type of ratio will only mean that the nonprofit organization will be facing higher risks in operating the organization (Hankin , Sneider Zietlow , 1998

Management expense ratio is the same as management expense ratio in mutual funds , but it is used in nonprofit organizations . Management expense ratio is the ratio between the management expenses and the expenses . A higher management expense ratio means that the organization is efficient in utilizing its income from donations and other sources of funds (Hankin , Sneider Zietlow , 1998

Revenue expense ratio is the ratio between the organization . However , very high values are not acceptable because most of the revenue of the organization come from donations and grants . A very high value of the ratio indicates that the organization has little work being...

7 pages

60.0 KB

Free sing-up