Non profit art organization finance analysis. Springboard for Arts Financial Analysis

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. It is indicative of more revenue earned by the company than its expenses. The company’s management was therefore very effective in the generation of profits for its company.
When compared with previous year performance, The company had revenue of approximately $375 000 in 2017 as opposed to the $ 350 000 in 2016. The company earned more revenue in the year 2017 than in the previous year. The net assets for the company, however, were more in 2016 as opposed to 2017. This decrease in net assets could be a result of an increase in expenditure in 2017. The company, however, had a more increase in cash flows generated in 2017 than the cash generated in 2016. The performance in 2017 is generally better than the previous year's performance.
From the company’s revenue, approximately 88% of it is contributed. It may be so since the company is a not for profit organization that purely depends on donations for financing its activities. The company gets further finances through grants. The company’s management has been very successful in raising funds from donors. The company, however, incurred approximately 11% of its fundraising expenses. In my view, they are not overspending in this area. The income generated through contributions accounts for approximately 90% of their total revenue; hence more expenditure should be directed towards it.
Cash Flows
The company recorded negative cash flows in the year 2016 from both operating and investing activities. This could be a result of more receivables held as its current assets. In 2017, however, the company slightly improved, indicating a negative cash flow from the operating section but showed a positive value in its investing segment. The results of improvem...