How Can I Measure the Liquidity of My Nonprofit? [PDF]

One of the key measurement tools is financial ratio analysis. It involves taking data from your organization's financial

4 downloads 19 Views 217KB Size

Recommend Stories


How can I keep my Bitcoins safe?
Open your mouth only if what you are going to say is more beautiful than the silience. BUDDHA

How can I green my church?
Life is not meant to be easy, my child; but take courage: it can be delightful. George Bernard Shaw

How can I sell my Share Certificates?
Come let us be friends for once. Let us make life easy on us. Let us be loved ones and lovers. The earth

[PDF] How I Made My First Million on the Internet and How You Can Too!
Ask yourself: How do I feel about the pace of my life? Is it too fast, too slow, or just about right?

How accurately can we measure dose clinically?
Knock, And He'll open the door. Vanish, And He'll make you shine like the sun. Fall, And He'll raise

Can I sell my crib?
The happiest people don't have the best of everything, they just make the best of everything. Anony

How Can I Get Repairs from My Landlord?
Keep your face always toward the sunshine - and shadows will fall behind you. Walt Whitman

How Can I Get Help Paying For My Medication?
Silence is the language of God, all else is poor translation. Rumi

How can I control dust in my bagging operation
Life isn't about getting and having, it's about giving and being. Kevin Kruse

How Can I Identify And Value My Stamps
Learn to light a candle in the darkest moments of someone’s life. Be the light that helps others see; i

Idea Transcript


menu

Sign Up for our E-Newsletter Client Portals Contact us CAREERS WHY MFA Benefits Career Growth Core Values Fast Facts Caring for the Community Life at MFA What Makes Us Unique Virtual Office Tour EXPERIENCED PROFESSIONALS STUDENTS OPEN POSITIONS OUR THINKING INSIGHTS Tax Audit Assurance Risk Financial Reporting General Business Transactions Valuation Due Diligence Nonprofit Healthcare WHITEPAPERS PUBLISHED ARTICLES AND PRESS QUOTES MULTIMEDIA FIRM NEWS EVENTS TEAM AUDIT AND TAX TEAM VALUATION TEAM FIRM ADMINISTRATION MFA CORNERSTONE CONSULTING MFA CAPITAL ADVISORS MFA GLOBAL MFA ASSET MANAGEMENT MFA TALENT MANAGEMENT INDUSTRIES TECHNOLOGY Software Computer Hardware and Peripherals LIFE SCIENCES ALTERNATIVE ENERGY BANKS AND FINANCIAL INSTITUTIONS FINANCIAL SERVICES Broker-Dealers Private Equity and Venture Capital Registered Investment Advisors NONPROFITS MANUFACTURING HEALTHCARE PROFESSIONAL SERVICES REAL ESTATE AND CONSTRUCTION RETAIL AND CONSUMER PRODUCTS FRANCHISING SERVICES TAX PLANNING AND COMPLIANCE Business Tax Individual, Family and Fiduciary Tax State and Local Tax (SALT) AUDIT AND ASSURANCE U.S. and International Audits Reviews and Compilations Fund Audits Employee Benefit Plan Audits Internal Audit System and Organization Controls (SOC) Reports Bank Field Examinations Broker-Dealer Audits RIA Surprise Examinations PUBLIC COMPANY SERVICES TECHNICAL ACCOUNTING ADVISORY Revenue Recognition ASC 740-10 Accounting for Uncertainty in Income Taxes ASC 740 Tax Provisions TRANSACTION SERVICES Due Diligence Business Transition Planning M&A Advisory VALUATION Tax Reporting and Planning GAAP (Fair Value) Reporting Litigation Support General Business Advisory LITIGATION SUPPORT FRAUD AND FORENSIC ACCOUNTING BUSINESS PERFORMANCE ENHANCEMENT SARBANES-OXLEY (SOX) COMPLIANCE INTERNAL CONTROLS IT ADVISORY Cybersecurity Assessments Strategic IT Consulting IT Compliance and Internal Controls Infrastructure Management Application Development Desktop Support Services EQUITY COMPENSATION WEALTH MANAGEMENT INSTITUTIONAL CONSULTING PROFESSIONAL STAFFING WHO WE ARE A PERSONAL MESSAGE FROM OUR MANAGING PARTNER WHAT MAKES US UNIQUE OUR CLIENTS Client Testimonials MFA Client Service Philosophy Client Satisfaction FAST FACTS THE MFA COMPANIES MFA - Moody, Famiglietti & Andronico MFA Cornerstone Consulting MFA Capital Advisors MFA Asset Management MFA Talent Management MFA Global Nonprofit How Can I Measure the Liquidity of My Nonprofit? October 2015

Financial performance measurement is a strategy a Nonprofit organization can use for evaluating operations, programs, services and financial stability. One of the key measurement tools is financial ratio analysis. It involves taking data from your organization’s financial statements, using it to calculate ratios appropriate for your Nonprofit, and then benchmarking those ratios against past performance, management objectives or other organizations. Utilizing financial ratio analysis can help you assess your organization’s overall financial condition and liquidity and flag patterns that might not be conducive to your success. If we look closer at liquidity, there are certain measures that can be used to ensure your organization has a sufficient level of cash flow for continued programmatic operations and growth. There are three main financial ratios you may want to consider to measure liquidity: 1. Current ratio equals current assets divided by current liabilities. A 2-3 ratio generally indicates that the organization has adequate liquid funds to pay its current obligations. 2. Quick ratio equals current assets (less any inventory amounts) divided by current liabilities. A ratio of 1 - 2 generally indicates an organization has adequate liquid funds to pay its current obligations without selling inventory. 3. Organizational liquidity funds indicator equals expendable net assets divided by average monthly total expenses. Expendable net assets are calculated as net assets less restricted endowments, fixed assets and prepaid expenses. This indicator measures how many months the organization has before it will consume its liquid assets, assuming that no additional revenue flows into it. The higher the ratio, the better the liquidity. Once calculated, these ratios can be used to benchmark your organization by comparing it to other similar Nonprofits. Comparing your organization’s performance to benchmarks allows you to zero in on areas with the greatest potential for improvement. Using this information, you may be able to improve performance without making significant changes in your operations. Further, when comparing against similar Nonprofits, you might improve performance by simply adopting best practices used by your peers. You can obtain information on other nonprofits’ metrics from websites such as GuideStar and Charity Navigator. Using monthly, quarterly or even yearly financial ratio analysis can help you understand your organization’s liquidity and provide you with valuable insight into its financial future. You will be able to identify the strengths and weaknesses of your organization and take appropriate actions to improve its liquidity.

Thank you for your comment. Leave a Reply Name Email Organization Comment POST YOUR COMMENT Please fill the captcha Please fill the captcha again Error, your email hasn't been sent Please fill empty fields Material Discussed in this article is meant to provide general information and should not be acted on without obtaining professional advice tailored to your firm's individual and specific needs. Any tax advice contained in this communication (including any attachments) is not intended or written to be used, and cannot be used by any person or entity, for the purpose of (i) avoiding penalties that may be imposed on any taxpayer or (ii) promoting, marketing or recommending to another party any transaction or matter addressed herein. This information is for general guidance only and is not a substitute for professional advice. RELATED TEAM MEMBERS Joyce Ripianzi Lead Partner – Nonprofit Practice (978) 557-5349 SEND EMAIL

DOWNLOAD BROCHURE

To learn more, download our Nonprofit Practice brochure. RELATED INDUSTRIES

Nonprofit Practice &npsp; Contact us

Contact Us Contact Us *First Name *Last Name *Company/Organization *Title/Role *Email *Phone Message

*Message Send a message

MAIN LINKS Who We Are Services Industries Team Our Thinking Careers at MFA Home THE MFA COMPANIES MFA Cornerstone Consulting MFA Capital Advisors MFA Asset Management MFA Talent Management MFA Global CONTACT US 1 Highwood Drive Tewksbury, MA 01876 P (978) 557-5300 F (978) 685-2333 Submit RFP Contact Us SOCIAL MEDIA Connect on LinkedIn Like us on Facebook Follow us on Twitter Website Terms and Conditions Website Privacy Policy Recruitment Policy © Copyright 2017 | MFA - Moody, Famiglietti & Andronico, LLP | All Rights Reserved

Home WHO WE ARE SERVICES INDUSTRIES TEAM OUR THINKING CAREERS Sign Up for our E-Newsletter Client Portals Contact us Search Show All Files

Back

Help Us Build You A Better Web Experience Click Here

Smile Life

When life gives you a hundred reasons to cry, show life that you have a thousand reasons to smile

Get in touch

© Copyright 2015 - 2024 PDFFOX.COM - All rights reserved.