Page 29 - Finances for Non-Finance People

RATIO

• Solvency—the ability to meet long-term financial obligations

• Debt to Asset- identifies long-term financial health, a ratio of .4 is desired

• Debt to Equity- a ratio of below .4 is desired

• Asset Turnover- a high ratio is desired, less than $1 of revenue was generated

from every $ invested (not good)

• Days of Receivable- identifies how long it takes to collect a receivable (desired

30 days or less). A low number of days means nonprofit receives their (money)

quickly