Analyzing Financial Statements essay

The liquidity of a private nonprofit human service organization can be found out by utilizing the current ratio. Liquidity signifies the level to which the organization has cash as well as other resources easily changeable into cash to cover existing working expenditures. To find out the long-range fiscal solvency of the private nonprofit human service organization and its capability to pay yearly expenses as they become due, the long-term solvency ratio is calculated. The contribution ratio is utilized to evaluate the dependence of a private nonprofit human service organization on its main income source.

The management/expense ratio is utilized to find out the ratio of private nonprofit human service organization’s general expenditure that goes to management or administration expenditure. Every dollar that goes for administration implies that one dollar less is on hand for programs and to give services to customers. The idea of the revenue/expense ratio is to find out if a human service organization is breaking even, earning funds, or losing funds. The revenue/ expense ratio can be considered as the organization’s “earnings margin. ” part Ill For the program suggested in Appendix B, calculate the following.

The key of this type of budgeting is its ease. The line-item budget can be understood by anybody involved. Following are the drawbacks of line-item budgeting method: Line-item budgets don’t say anything regarding how much service a human service organization renders, the cost of that service, the quantity of outcomes the organization achieved, or their employee costs. Resource distribution discussions and decisions have a tendency to be framed by the line-items themselves since no additional information is obtainable. Performance budgeting scheme can be done at the program level only.

The function of a performance budgeting system is to relate organization expenses to programs by deciding a program output (or item of service), performance assessment, the total program cost, and the cost for each output or cost for each unit of service. Its benefits are: they give information on the subject of the amount of service rendered by a human service program as well as the employee costs and calculation of the cost for each output or for each unit of service and they lift the intensity of argument from line-items to program costs, program services, programs, as well as program efficiency.

Conversely, the disadvantage of this kind of budgeting system is that human service organizations must employ refined cost analysis methods in order to find out the full cost of a program and to get exact unit costs. Program budgeting systems is to relate organization expenses to programs, evaluations of program outcomes, as well as the Cost to the program of getting outcomes. Performance budgeting gives insights into the efficiency of a human service program.

Benefit s of program budgeting systems are that they give report about the quantity of (client) outcomes got by a human Irvine program as well as the employee costs, including determination of cost for each outcome, and they increase the intensity of argument from service as well as efficiency worries to clients as well as effectiveness worries. Its drawbacks, nonetheless, are organizations should use refined cost analysis methods in order to find out the full cost of a program and to get exact unit costs, and that good outcome performance measures are often hard to build up.

Part V How can knowing the cost per output and cost per outcome benefit a human services agency? The sum of costs for all units of service is considered as cost for each outcome. The article of the fiscal strength and supervision of the agency is crucial in using cost for each output and outcome computations. Cost for each output and outcome computations can give insight into a human service agency’s fiscal management plan to assess whether or not the objectives and goals are being met to render the services which support the mission.

Outputs and outcomes give the information concerning the services, how they are executed, and whether they are or they are not financially good to the agency. Programming, services, and divisions of labor, can be decided to guarantee that funds are distributed correctly. Decisions can be made considering fixed and variable costs and how those influence the revenues. Quality of services can also be tackled using outputs and outcomes which establish the level of services and how the quality is influenced through an increase in backing or a decrease.

If you are unaware of the costs to get a certain outcome/output, the agency couldn’t know probably how much to charge for their services. Without knowing this, the agency will most definitely be losing money. What is the primary difference between a performance budget and a program budget? Why does a human services agency need to know this information? A performance budget distributes money to various programs within an agency as well as provides information about the service level on which the budget is predicated. The scenic level is known by the utilization of performance measures.

The key direction Of the performance budget is that of improving the in-house supervision of the program in addition to controlling costs,. Funds are distributed to major program areas by the program budget, concentrating on the projected results of services and activities to be continued. Program areas frequently used by government bodies include neural government, leisure services, human services, public works, and public safety. The stress of program projects is on the achievement of long- term local community objectives.

Both the program and performance budget use signs to assess operational and fiscal performance; however the budgets have a special focus. A performance budget highlights management efficiency, while a program budget highlights the advantages that the local community gets from municipal expenditures. Part VI Provide a 350- to 700-word response to the following: Identify and describe two types of traditional approaches to fund development, and two types of entrepreneurial approaches to fund development.

The procedure of fundraising is to seek and receive money or gifts by requesting contributions from governmental organizations, charity- organizations, corporations, as well as individuals. Generally, fund-gathering endeavors are linked with non-profit organizations. There are many conventional methods used for fund-raising, including Client Donations and Annual Campaigns. 1 . Annual Campaigns: These usually take place in the last months of a year when individuals and corporations are expected to donate generously to reduce their taxable income.

Annual Campaigns just mean a well-known fund-raising effort through direct mails or telephone solicitations to companies, individuals, organizations, etc. The basic purpose of annual campaigns is to push the earlier donors into making additional donations and also increasing the sum of their donations. 2. Client Donations: This conventional fund-raising endeavor refers to the independent contributions made by service recipients to human service organizations. A well-designed fund-raising effort facilitates the clients to donate something for maintaining the cost of the program separately from the normal raising of revenues.

To fight the persistently increasing struggle for financial support, innovative methods are used by the programs as well as human service organizations. 1 . Bequest Program: This long term fiscal development plan is a shape of planned giving where persons declare in their wills or estate plans concerning transferring particular properties, stocks, bonds, as well as money, to a non- profit human service organization or program after their deaths. With the assistance of this system, persons can convey their thanks towards a human service organization for the services received by them as well as their dear ones.

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