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l Presented below are financial statements (except cash flows) for two not-for-profit organizations. Neither organization has...

l

Presented below are financial statements (except cash flows) for two not-for-profit organizations. Neither organization has any permanently restricted net assets.

ABC Not-for-Profit XYZ Not-for-Profit
Statement of Activities Unrestricted Temporarily
Restricted
Unrestricted Temporarily
Restricted
Revenues
Program service revenue $ 5,605,000 $ 2,236,600
Contribution revenues 3,333,400 $ 747,900 3,180,900
Grant revenue 95,700 $ 979,600
Net gains on endowment investments 17,500
Net assets released from restriction
Satisfaction of program restrictions 450,000 (450,000 ) 374,700 (374,700 )
Total revenues 9,405,900 393,600 5,792,200 604,900
Expenses
Education program expenses 5,630,600 1,551,700
Research program expense 1,276,000 2,245,400
Total program service expenses 6,906,600 3,797,100
Fund-raising 455,000 357,000
Administration 670,000 1,230,000
Total supporting service expenses 1,125,000 1,587,000
Total expenses 8,031,600 5,384,100
Increase in net assets 1,374,300 393,600 408,100 604,900
Net assets January 1 4,228,000 754,500 991,600 298,700
Net assets December 31 $ 5,602,300 $ 1,148,100 $ 1,399,700 $ 903,600
STATEMENT OF NET ASSETS ABC Not-for-Profit XYZ Not-for-Profit
Current assets
Cash $ 98,200 $ 239,700
Short-term investments 247,900 92,700
Supplies inventories 30,000 140,500
Receivables 224,500 82,900
Total current assets 600,600 555,800
Noncurrent assets
Pledges receivable 475,000
Long-term investments 2,600,000
Land, buildings, and equipment (net) 3,084,800 1,988,000
Total noncurrent assets 6,159,800 1,988,000
Total assets $ 6,760,400 $ 2,543,800
Current liabilities
Accounts payable $ 23,000 $ 128,100
Total current liabilities 23,000 128,100
Noncurrent liabilities
Notes payable 178,500
Total noncurrent liabilities 178,500
Total liabilities 201,500 128,100
Net Assets
Unrestricted 5,625,000 1,454,400
Temporarily restricted 933,900 961,300
Permanently restricted 0 0
Total net assets 6,558,900 2,415,700
Total liabilities and net assets $ 6,760,400 $ 2,543,800

Required:
a. Calculate the following ratios (Assume 365 days):

  • Program expense.
  • Fund-raising efficiency.
  • Working capital.

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