Problem Solving - Case Study Example

Accounting 14-10 ratio formula 2006 2007 Current ratio Current assets/ current liabilities 11133813/3851715 =2.8906 13305806/4059893=3.2773Days of cash on handCash + marketable securities/ ((operating expenses- bad debts- depreciation)/365)1044193/((28975560/365))=13.151909606/((31179694/365))=22.35Debt ratioTotal debt/ total assets7282098/3851715=1.899245913/4059893=2.28Debt to equity ratioTotal debt/ total net assets7282098/11133813=0.659245913/13305806=0.69Total margin ratioIncrease in net assets/ total unrestricted revenues and other support-308597/28499346=-0.

0108-371761/29450264=-0.012Program service ratioProgram service expenses/ total expenses24394594/28975560=0.841925851994/31179694=0.829114-11The financial statements of ACLU reflect the activities of their local affiliates because there is an accounting for the local affiliate transactions. That is the indicator that has been used to show that they reflect such transactions. ACLU received donations of endowment type in 2007 because the donations have been included as unrestricted in the financial statements of the company.

The temporary net assets that were restricted by 31st 2007 were 2916537 while $ 7020720 of the net assets was unrestricted. The checking account for the company can be considered to be the cash equivalent for the company. The short term liquidity of ACLU improves with time and that is a good indicator for the company.The return on assets of the company shows the ability of the company to increase profits as a result of the productivity accruing from the net assets. The measure will show the productivity of the company.

The productivity of the company will affect the ability of the company to increase profits and, hence, the financial position of the company. The company mainly relies on donations as opposed to loans. That means that it will have no financial obligation to external firms or financial institutions (Finkler 2010).If I were a fund raising manager, I would mainly focus on the current members as opposed to new members. If a person wants to make donations and would want to know the amount of money that will be put in the major activities of the company, I would advise on the use of efficiency ratios.

14-12All the chapters were audited because the final report was given by the company. The financial statements are not free of error because auditing is an exercise that involves sampling and that could be subject to some approximation error. The donation of land and buildings should be treated differently as capital items and they should be capitalizing in the recording of their receipt.If wish sued LIFO method, the net assets would have increased as opposed to the use of FIFO. The service that qualifies as a program service is management and general services.

The decrease in net assets could be as a result of the losses from the stock market because the investments have been incorporated as part of assets of the company. Wish does not include any provisions for a law suit because they have not indicated such an instance. The overall assessment of the finances of wish shows that the company is doing well but has the potential of doing much better.ReferenceFinkler, S. A. (2010). Financial management for public, health, and not-for-profit organizations (3 rd ed.). Upper Saddle River, NJ: Prentice Hall.