Government and Non-for-profit Accounting

Explain you answer.

Including:

• Program Expense Ratio = Program service expenses / Total expenses
• Fundraising efficiency = Fundraising expenses / Contribution revenue
• Working capital ratio = (Current assets - Current liabilities) / Total expenses

For government and non-for-profit organizations, which financial ratios would best used to determine the following (more than one could be selected):

1. Economic sensitivity
2. Interest coverage ratios
3. Covenants
4. Seniority
5. Recoverability

Ratio Source: Formula Village of Riverside Interpretation Financial Position: Government-wide statements (governmental activities) Financial Position: Governmental Activities $857.490 = 10% $8,421,600 This is a measure of the availability of resources to meet expenses. Larger values indicate stronger financial condition Unrestricted Net Position Total Expenses: Governmental Activities General Fund fund-basis statements Financial Position: General Fund Unassigned Fund Balance Total Expenditures + Other Financing Uses $615.990 = 11% $5,030,300+800,000 This is a more conservative measure of the availability of resources to meet expenses since excludes resources that are committed to restrictive funds. Larger values indicate stronger financial condition. Liquidity Government-wide statements (governmental activities) Quick Ratio Cash + Current Investments Current Liabilities $731,500 + 352,000 $196,300 + 80,000+ 190,000 A measure of the government's ability to finance short-term obligations 2.32 Higher values indicate greater liquidity. Solvency Government-wide statements (primary government) Leverage-debt to total assets $4,680,700 = 0.11 $43,663, 610 A measure of the proportion of a government's assets that are financed with debt. Small values indicate greater solvency. Coverage ratio- debt service Total Liabilities - Deferred Outflows Total Assets - Deferred Inflows Enterprise fund Statement of Cash Flows Cash Flows from Operations Interest Paid + Payments of Principal Governmental fund-basis statements $465,800 = 2.5 times $189.000 + 0 Indicates the availability of cash generated to meet current obligations on outstanding debt. Higher values indicate greater solvency. coverage Debt service to total expenditures $120,000+ 96.000 $5,030,300 + 216,000 Principal and Interest Expenditure Total Expenditures: General and Debt Service Fund = 4% A measure of the degree to which governmental expenditures are committed to debt service. Low values indicate greater flexibility and ability to manage additional debt. Ability to Pay Government-wide statements (primary government) Debt per capita $4,680,700 = $468 10,000 A measure of the government's ability to service debt or incur additional debt. Low values indicate greater flexibility and ability to manage additional debt. Total Liabilities Population Government-wide statements (primary government) Debt to assessed value of property Total Liabilities Assessed Value of Property $4,680,700 = 4.68% $100,000,000 A measure of the government's ability service debt or incur additional debt. Low values indicate greater flexibility and ability to manage additional debt