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Directions: Answer the following questions using the Baruch College Fund’s Audited Financial Statements. Answers are due November 10, 2011 at 6:05 pm. If you decide to e-mail the test to me instead of turning in a hard copy, you are responsible for its format. I will print it “as is.” You will lose points if you do not put your name on it. Please treat this as you would a work assignment. Change date for exam!

1. (1 point) What type of opinion did the auditors give the BCF’s financial position? How do you know? Does this mean the BCF financial statement reflect no errors? Unqualified. Auditor’s opinion letter. No, simply means conform to GAAP and free from material error. 2. (2 points) What are the BCF’s two largest sources of total income in 2010? Use common-size ratios to show their importance to the BCF revenue portfolio. Provide year-over-year percentage increases for each. Contribution Income, FY2010: 10,004,245 19,884,491


Y/Y Change: =(10004245/8611418)-1 = 16.2% Net Investment Income, FY2010: 8,737,877 19,884,491


Y/Y Change: =(8737877/-15844736)-1 = 155.1% (note: need to make positive)

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3. (2 points) In 2010, did the BCF sell more investments than it purchased (excluding artwork)? In 2009? Support your answer with numbers from the financial statements and indicate from where you derived the information. Buy Sell Net

2010 (22,332,398) 25,330,167 2,997,769

2009 (51,282,263) 53,270,598 1,988,335

Sold more each year. Numbers from cash flow statement (cash flows from investing activities) 4. (2 points) What is the BCF’s current ratio for both 2010 and 2009 (note: Investments are long-term)? What is the quick ratio (excluding any receivables) for those years? How do these two measures of liquidity compare to each other? How would you assess the BCF’s liquidity overall? Current Ratios: 2010: =3177808+8939787+34998 0 =1797058 = 6.94 2009: =2721155+604919 9 =2313487 = 3.79 Quick Ratios: 2010: =3177808 =1797058 =1.77 2009:

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=2721155 =2313487 =1.18 Quick ratio is more conservative and much lower, below benchmark in fact. However, the trend is favorable overall. [Note: need to exclude long-term portion of contributions receivable] Source: Statement of Financial Position and Note B 5. (1 point) Does the BCF have bank accounts that exceed federal deposit insurance limits? How do you know? Yes. Note G

6. (2 points) What were the BCF’s operating (unrestricted) margins for 2010 and 2009? How much did it change (number and percent) from 2009 to 2010? 2010: =750875 =14059457 = 5.3% 2009: =-3849709 =11950607 = -32.2% Change: 4,600,584; 119.5% Source: Statement of Activities 7. (1 point) How much did the BCF spend on salaries and benefits as a percentage of expenses in 2010 and 2009? What was the percent change between the two years?

Salaries & Benefits Total



1,499,970 13,308,582

1,634,882 15,800,316

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Expenses % Total: % Change

11.27% -8.25%


8. (1 point) What was the BCF’s program expense ratio for 2010 and 2009? Where did you find this information? Programs Total Expenses % Total:

2010 10,813,590

2009 12,726,765

13,308,582 81.25%

15,800,316 80.55%

Statements of Functional Expense 9. (1 point) Calculate BCF’s Debt to Assets ratio for 2010 and 2009. Use Total Liabilities in your calculation for Debt.

Liabilities Assets Ratio:

2010 1,797,058 125,887,109 1.43%

2009 2,313,487 119,827,629 1.93%

10. (1 point) Calculate BCF’s Days of Cash on Hand for 2010 and 2009. Is the trend favorable? Most nonprofit financial experts suggest that organizations maintain 23 months of cash on hand for emergencies. How does this ratio compare to this rule of thumb?

Cash Operating Expenses Ratio:

2010 3,177,808

2009 2,721,155

13,308,582 87.15

15,800,316 62.86

Trend is positive. Ratio for both years is within a good range.

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11. (1 point) Does the BCF report any unrestricted or board-designated contributions in its endowment? How do you know? No, only donor-restricted funds are included in endowment. Note H.

Test bank financial management for public health and not for profit organizations 4th edition finkle