Question

AssIGNMENT 7.3. THE MLK SETTLEMENT HOUSE AND ITS PROFITS In FY 2010, the MLK Settlement House has $800,000 in unrestricted revenues and $780,000 in unrestricted expenses. In the previous year, FY 2009, the MLK Settlement House had $700,000 in unrestricted revenues and $685,000 in unrestricted expenses. What ratios would you use? What are the answers and what conclusions would you draw?

Answer 1

	FY 2010	FY 2009
Unrestricted revenues (a)	$ 800,000.00	$ 700,000.00
Unrestricted expenses (b)	$ 780,000.00	$ 685,000.00
Current ratio = (a)/(b)	$             1.03	$             1.02

A high current ratio indicates that a company is able to meet its short-term obligations. ... Increases in the current ratio over time may indicate a company is "growing into" its capacity.

"Unrestricted" funds are donations the nonprofit may use for any purpose. Unrestricted funds usually go toward the operating expenses of the organization or to a particular project that the nonprofit picks

"Unrestricted" funds are donations the nonprofit may use for any purpose. Unrestricted funds usually go toward the operating expenses of the organization or to a particular project that the nonprofit picks.

Current ratio = current assets/current liabilities