Financial Position of the Nonprofit Organization Is Essay

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financial position of the nonprofit organization is designed to provide specific insights about its liquidity, long time solvency and assets management ratios. These areas will help to determine if the entity is facing tremendous financial challenges. Moreover, they will highlight how administrators can seize upon new opportunities in the future.

To determine the strength of the nonprofit organization a comparison will be conducted with the city of Charlottesville. The below table is contrasting various financial ratios.

The Liquidity, Long Time Solvency and Asset Management Ratios for the Non-Profit vs. Charlottesville

Nonprofit (Table 9.4)

Charlottesville 2005

Current Ratio

Working Capital

$1,041,067

$32,953,718

Quick Ratio

Debt to Asset Ratio

.17

("Financial Statement for a Small Nonprofit," 2006) ("City of Charlottesville Net Assets," 2005)

Analyze the comparison of ratios

The current ratio is showing that the nonprofit is in a better financial condition to address short-term obligations and liquidity challenges.

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This is because they are several times higher than the figures for the city of Charlottesville. The working capital and quick ratios are illustrating a similar situation when it comes to the two entities. The debt to asset ratio is showing how the nonprofit has financed less of their assets with debt in contrast to the city of Charlottesville. These figures are indicating the nonprofit is in a stronger fiscal position. (Gibson, 2008) ("Financial Statement for a Small Nonprofit," 2006) ("City of Charlottesville Net Assets," 2005)

Analyze the measures of liquidity

The measures of liquidity are indicating that the nonprofit can be able to fund its short-….....

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