Page 43 - NCCAA Finance Board Accountability

Ratios

Current Ratio Current Assets / Current Liabilities
The debt-to-asset ratio is a financial metric that
measures the proportion of a nonprofit

Working Capital Current Assets – Current Liabilities organization's total assets that are financed by

debt.

Quick Ratio Cash + Securities + Accounts
Receivable/Current Liabilities Nonprofits typically strive to maintain a low debt-

Debt to Asset Total Liabilities / Total Assets to-asset ratio to demonstrate financial stability and
minimize risk.

Debt to Equity Total Liabilities / Net Assets
In the nonprofit sector, it is common for

organizations to aim for a debt-to-asset ratio
Asset Turnover Total Unrestricted Revenues / Average below 0.5 or 50%. This means that the
Total Assets
organization's total debt represents less than half

Days Accounts Receivable *365 / of its total assets.
Receivable Unrestricted Revenue

Profit Margin Increase in Unrestricted Net Assets /
Unrestricted Revenue