Analysis Basics: Organizational Financial Health

Organizational Financial Health
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Organizational Financial Health
Information used to analyze an Organization’s Financial Health
Revenue reliability; refers to the track record of an organization’s bringing in recurring dollars on a rather unrestricted operating basis from year to year (DeVore, 2020).
Consistent surpluses; a financially healthy organization is one with reliable revenue which covers operating expenses and leads to surpluses (Krcil, 2020).
Appropriate liquidity; this shows the financial ability of an organization to withstand market risks and respond to new business opportunities.
Ability to manage debts; a healthy organization is one that can manage its ebbs as well as cash flows for upgrades, facility purchases, and operations (Zietlow, 2020).
Capacity to steward facilities; an organization which has no mission of owning equipment and property, it should maintain and replace such assets to maintain a healthy financial status (Finkler, S. A., Smith, D. L., & Calabrese, 2018).
Z-score and what it tells you
The Altman Z-score refers to the values obtained from a test on the credit strength of a company which gau...