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Fiscal analysis

Student:

Institution:

Introduction

            Fiscal analysis refers to the measured ratios of the futuristic elements of an entity. This paper focuses on the financial statements of Montana Nonprofit Association in delivering a fiscal analysis.

Defensive interval; this refers to the duration that the company would stay afloat if no further revenue would be introduced by third parties (Aswath, 2012). This is the duration within which the business can stand on its own  

(Cash + Securities + Receivables) ÷ Monthly Expenses

($375,544) / (49,551) = 7.56

Savings indicator: this is a ratio which shows how the management is able to save the profits that it generates. This is measured as a ration of the revenue and expenses (Hugo, 2006)

(Revenue – Total Expense) ÷ Total Expense

($585,536 - $594,619) / (594,619) = -.015.

Liquid Funds Indictor: this is a ration which shows the easiness in settling current liabilities. It indicates the funds that are easily convertible into cash (liquid) (Aswath, 2012).

(Total Net Assets – Restricted Net Assets – Fixed Assets) /Monthly Expenses

($292,949 - $230,319 - $0) / (49,551) = 1.26

Debt Ratio: this is the multiplicity factor of the property owned by the company and the amounts that it owes the third parties other than the shareholders equity (Aswath, 2012). This ratio is used by investors in evaluating the risk of their investment.

(Average Total Debt) / (Average Total Assets)

($82,595) / ($363,263) =.23 (or 23%)

Revenue Ratio: this is a ration that indicates the percentage contribution of each source of capital tom the total capital that the company has. It shows the sources that have taken higher and lower risk in the organization (Hugo, 2006). The shareholders use this ration to measure their investment against the investment of other lenders.

(Revenue Source) / (Total Revenue)

The first source that is considered in this analysis is discount product fees.

($76,930) / ($516,530) = 15%.

The second item that is considered in this analysis is project fees

($25,313) / ($516,530) = 5%.

Summary

            From the above analysis, the management at Montana has been able to show great decision making. A debt ratio of 23% is within the provision from the average of 25% that is gotten from the industry (Hugo, 2006). Also, distribution of source of funds shows that even if one source withdrew the organization would not go under.

References

Aswath, D. (2012). Investment Valuation. Mason: Cengage

Hugo, J. (2006). The Net Worth Approach to Fiscal Analysis. New York: Willey