Use the financial statements from Charlottesville, Virginia, to conduct
your own analysis. Two years are provided so that a comparison between
years can be made. Students are advised to use the format in the spread-
sheet in Table 9.4 and add an additional column for FY 2005 so that the
ratios can be compared side by side. (Please note that NPS used in the
days payable ratio is 20 percent of the total expenditures.)
When students compare the ratios, they should focus on measures of
liquidity, long-term solvency, and asset management ratios.
TABLE 9.4
Financial Statement for a Small Nonprofit Organization
FY 2006
1. Current ratio Current assets $1,289,762 = 5.19Current liabilities $248,695
2. Working capital Current assets-current liabilities
$1,289,762 minus $248,695 = $1,041,067
3. Quick ratio Quick assets $1,121,492 = 4.51Current liabilities $248,695
4. Debt-to-asset ratio Total liabilities $630,153 = 0.17Total assets $3,676,115
5. Days payable ratio All accounts payable × 365 days $73,000,000 = 2.83 daysNPS expenses $1,161,884
6. Profit margin ratio Surplus -$2,037 = -0.053%Revenue -$3,822,766
7. Common size ratio Line item amount Contributions $565,032 14.78%
Total amount Grants 1,182,215 30.93
Government contracts 1,459,639 38.18
Fees 529,243 13.84
Interest 86,637 2.27
$3,822,766 100.00%