The following two financial statements—a statement of activities (profit and loss summary) and a statement of

Question

The following two financial statements—a statement of activities (profit and loss summary) and a statement of financial position (balance sheet)—are for the Council on Social Work Education for fiscal year 1998. (See Tables 5.3 and 5.4.) Review these two financial statements and compute the following ratios: current ratio, long-term solvency ratio, contribution ratio, programs/expense ratio, and revenue/expense ratio.

Comment on each of these ratios. Do the ratios appear high or low? Are the

ratios in keeping with the standards discussed in this chapter? Overall, how would you describe the financial condition of the Council on Social Work Education? Why can’t a management and general/expense ratio and fund-raising/expense ratio becomputed?

Richmond, Virginia, Senior Center

Comparative Ratios

Fiscal Years FY01, FY02, and FY03

Current ratio

Long-term

solvency ratio

Contribution

ratio

Programs/

expense ratio

General and

management/

expense ratio

Fund-raising/

expense ratio

Revenue/

expense ratio

FY01

.97

1.10

.35

.60

.25

.15

.95

FY02

.95

1.08

.37

.55

.27

.18

.96

FY03

.93

1.05

.40

.50

.30

.20

.98

Answer 1

1) You did not ask a question

2) The answer is obviously to a take home exam

3) You have the information in front of you

DA