Analysis of RIBA Using Financial Ratios - Case Study Example

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The paper will research the strategic, performance and ratio aspects used in this paper to examine the operations of RIBA as these areas provided the basis to evaluate the company’s progress. It explores the varied aspects of the use of financial statements to understand the performance of a charity. …
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Download file to see previous pages RIBA crafted programs and strategies to increase its self-sufficiency represented by a reduction of internal administrative expenses, offering increased services through the use of digital platforms and more self-generating revenues. It is the increased emphasis on an internal self-revenue generation that was found to be the most significant aspect. This is because external donations represent competing with a large number of other charitable organizations that are all vying for a limited pool of funds. This means that with increased emphasis on global humanitarian, environmental and other issues, these types of areas could very well garner increased donations that might erode some of RIBA’s important donor contributions. Through internal revenue generation represented by member subscriptions, the purchase, and sale of investment properties, and other areas, RIBA has increased its generation of funds to underpin its charitable operations. This is a critical aspect as it h\as helped and will continue to aid the charity in establishing an ongoing sustainable operation in the future. In terms of charitable organizations, the analysis of these types of financials differ considerably from a for-profit operation as the donations and revenues generated are primarily distributed for varied activities undertaken (Zietlow, Hankin & Seidner, 2011). The exception is the hedge that charitable organizations maintain against the unforeseen revenues to be raised in ensuing years (Zietlow et al, 2011). These represent unknown aspects that are subject to a possible change in a dramatic fashion as future donations can undergo changing donor and fundraising revenues, impacts of an uncertain economic climate, as well as changing individual and or corporate profits (Ryan & Irvine, 2012). In terms of the financial statements issued by charitable organizations, they differ considerably from for-profit companies (Brigham & Houston, 2012). A for-profit organization’s financial statements are comprised of a balance sheet, profit/loss statement, statement of cash flows and a statement of owners equity (Brigham & Houston, 2012). A nonprofit financial statement is comprised of a statement of financial position, statement of activities, statement of cash flows and a change in net assets (Brigham & Ehrhardt, 2013). In terms of a simplified explanation, a for-profit organization is reviewed based on in changes in revenue, net profit, operating costs and the value of the organization from one year to the next (Brigham & Ehrhardt, 2013). In the instance of a nonprofit, its activities are based on the number of donations and revenue-generating activities it has conducted (List, 2011). This report looked at the financial health of RIBA Architecture that is a global body comprised of a professional membership that seeks to drive excellence in architecture (RIBA Architecture, 2017).  The purpose of RIBA is to serve its members as well as society in the delivery of better buildings that increase the use of environmentally sustainable practices (RIBA Architecture, 2017). The performance report for RIBA is multi-faceted. ...Download file to see next pagesRead More
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