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FINANCIAL ANALYSIS RATIOS TABLE | | 2002 | 2003 | 2004 | Current Ratio | .75 | .87 | .90 | Long-Term Solvency Ratio | 1.26 | 1.38 | 2.06 | Contribution Ratio | .53 | .51 | .49 | Programs/Expense Ratio | 1.0 | 1.0 | 1.11 | General & Management/Expense Ratio | .30 | .28 | .23 | Fundraising /expense Ratio | | | | Revenue/Expense Ratio | .98 | .94 | 1.11 | Each ratio is important for all three years of the Data for XYZ Corporation. The reasons are as follows: 1. Current Ratio – The purpose of the current ratio is to assess a private nonprofit human service agency’s liquidity. Current Ratio is important because it allows the agency to make sure they are not facing any liquidity problems. Liquidity means the extent to which the agency has cash and other assets readily convertible into cash to cover current operating expenses. 2. Contribution Ratio – The purpose of the contribution ratio is to assess the agency’s dependency on its major revenue source. Contribution ratio is important because it ensures the financial viability of the agency. 3. Program Expense Ratio – The programs/expense Ratio means that a private non-profit human service agency should spend a minimum of 60 percent of its total expenses for programs. It is important to meet this standard in order to help donors make an informed decision. 4. General & Management/Expense Ratio – The purpose of the general and management/ expense ratio is to determine the proportion of the agency expenses that go toward the administration means that one dollar less is available for programs and to provide services to clients. This ratio is important to show whether or not an agency should think about ways to reduce administrative costs. 5. Fundraising/expense ratio - The purpose of the fund-raising/expense ratio is to determine the proportion of agency expenses that go toward the various

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