Financial Stability and Performance Analysis of Springboard for Arts Organization
Overview
This paper provides a comprehensive financial analysis of Springboard for Arts, examining the organization's financial stability, performance trends, and cash flow management across 2016 and 2017. The analysis evaluates the nonprofit's ability to meet short-term obligations, revenue generation capacity, and overall financial health, concluding that while the organization demonstrates partial stability and improved performance in 2017, it faces challenges with negative operating cash flows and limited long-term asset coverage.
What this coursework covers
- Financial Stability: Assessment of cash reserves, current ratio, and ability to cover liabilities
- Financial Performance: Analysis of revenue growth, net assets changes, and fundraising effectiveness
- Cash Flows: Examination of operating and investing activities across fiscal years
- Borrowing and Investments: Review of debt reliance and capital structure
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Springboard for Arts Financial Analysis
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Financial Stability
The company's value of cash and short term investments accounts for over 60% of its current liabilities. In 2017, for example, the company had cash and its short term investments accounting for 65% of its total debts. It is indicative of how the company is nearly able to use its cash assets to run the business and pay its bills. The company, however, recorded an increase in the value of unrestricted net assets in the year 2017 from 2016. The company has no debts. It shows it has enough resources generated from its income for running of its activities. However, the company is not very stable since it still recorded negative cash flows in both 2016 and 2017. The company has little net assets to cover its liabilities in the long run fully.
The company reported a high value of the current ratio in 2017. The company's current assets were four times more than its current liabilities. It also recorded a high value of cash ratio in both 2016 and 2017. The business can use its current liabilities to meet short term obligations when due. In this way, I can describe it as partially stable.
Financial Performance
Springboard Company reported a positive change in net assets during the year 2017. The positive change shows the company has less debt than its incomes. It also reported a positive change in cash flows in both operating and investing activities. The net revenue is positive.