McGrew_MBA721 Section 1 5-2

McGrew_MBA721 Section 1 5-2 - McGrew | 1 Key Indicators for...

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M c G r e w | 1 Key Indicators for American Red Cross 1. Financial indicator levels & accounting (is it accurate and how are income and expenditures tracked?) 2. Expendable net assets 3. Ratio of program service expenses to total expenses 4. Budget/ cost of providing services 5. Expenses 1. Since for most financial indicators, it is not possible to define standard, desirable, or average values due to a scarcity of data, and the variety of organizations in the not-for-profit sector, the columns, “If High” and “If Low” are provided to help users consider what would be appropriate levels for a particular organization at a particular time. For example, The American Red Cross clearly needs more operating reserves than does an organization not subject to large, unpredictable, immediate demands on its resources (i.e., when the Big One hits.) 2. What is considered expendable net assets must be considered in each case. Most unrestricted net assets are normally included, however equity in property and
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McGrew_MBA721 Section 1 5-2 - McGrew | 1 Key Indicators for...

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