TABLE 9.4
Financial Statement for a Small Nonprofit Organization
figure
The profit margin ratio is problematic because the nonprofit had a slight deficit this year. Questions that need to be answered include: Is this loss a one-time event or has this nonprofit been in this situation before? Is this nonprofit building intergenerational equity over time? What is the trend over five or ten years?
Looking at the degree of diversity in revenues, the analyst can see that this nonprofit organization depends heavily on government contracts; in contrast, contributions are quite a small proportion of the revenues. Certainly, the nonprofit would benefit from a greater emphasis on contributions.
It is possible to conclude that, although the nonprofit does not have immediate concerns about liquidity and solvency, this nonprofit organization needs to stabilize its profit margin and improve its sustainability of resources through revenue diversification. More could be learned through an in-depth examination of the sources and uses of revenue.
TABLE 9.5
Statement of Financial Position (Balance Sheet) for a Small Nonprofit Organization
Current assets
Cash $271,671
Temporary cash investments 619,941
Accounts receivable 45,918
Pledges receivable 183,962
Prepaid expenses 168,270
Total current assets $1,289,762
Long-term assets
Investments $2,033,200
Land, buildings 1,612,164
Other assets 30,751
Total long-term assets $3,676,115
Total assets $4,965,877
Current liabilities
Accounts payable $200,000
Accrued expenses 48,695
Total current liabilities $248,695
Long-term liabilities
Mortgage $381,458
Total liabilities $630,153
Net assets
Unrestricted $2,509,727
Temporarily restricted 825,997
Permanently restricted 1,000,000
Total net assets $4,335,724
Total liabilities and net assets $4,965,877
TABLE 9.6
Statement of Activities (Income Statement) for a Small Nonprofit Organization
Revenue
Contributions $565,032
Grants 1,182,215
Government contracts 1,459,639
Fees and membership dues 529,243
Interest and gains 86,637
Total revenue $3,822,766
Expenses
Salaries $2,187,465
Benefits 475,454
Total PS $2,662,919
Chen, G., G., Forsythe, W., D., Weikart, A., L., Williams, W., D. (06/2008). Budget Tools: Financial Methods in the Public Sector, 1st Edition. [Strayer University Bookshelf]. Retrieved from https://strayer.vitalsource.com/#/books/9781483304571/