Question

Using the Michael J Fox Foundation Consolidated Financial Statements for December 31, 2013 and 2012, please calculate the following:

1. The Current Ratio for December 31, 2012, and December 31, 2013 (10 points).
a. How does the 2013 current ratio compare with the 2012 current ratio?   
b. In nominal dollar terms, how much and in which direction did the numerator for the current ratio change?
c. In nominal dollar terms, how much and in which direction did the numerator for the current ratio change?
d. How do you evaluate the two current ratios in light of the nominal changes in current assets (the numerator) and current liabilities (the denominator)?   In other words can you apportion how much the ratio changed based upon the changes in its components (if you struggle with this it’s ok, this is worth one point of the question)?

2. The Quick Ratio for December 31, 2012, and December 31, 2013.
a. How does the 2013 quick ratio compare with the 2012 quick ratio?   
b. In nominal dollar terms, how much and in which direction did the numerator, cash, cash equivalents, and net receivables for the quick ratio change?
c. In nominal dollar terms, how much and in which direction did the denominator, current liabilities, for the quick ratio change?
d. How do you evaluate the two current ratios in light of the nominal changes in cash, cash equivalents, and net receivables (the numerator) and current liabilities (the denominator)?   In other words can you apportion how much the ratio changed based upon the changes in its components (as in question 1, this is worth one point of the question; feel free to ask questions)?

3. The Liabilities to Fund Balance Ration for December 31, 2012, and December 31, 2013.
a. Use your judgment and review the documents, then please define the denominator, unrestricted fund balances (there is a figure you can pull directly from the documents, or you may wish to create an estimate of your own based on your review of the documents).
b. How does the 2013 liabilities to fund balance ratio compare with the 2012 liabilities to fund balance ratio?   
c. How do you evaluate the 2012 and 2013 liabilities to fund balance ratios in light of the nominal changes in liabilities (the numerator) and unrestricted fund balances (the denominator)?   In other words can you apportion how much the ratio changed based upon the changes in its components (as in question 1, this is worth one point of the question; feel free to ask questions)?

4. Although the Michael J. Fox Foundation is a non-profit foundation and thus does not report an operationg “profit” as such, you could still estimate an “operating margin,” or “net contribution to fund balance.”   Please define and then estimate the Michael J Fox Foundations operating margin or net contribution to fund balance for 2013.

Estimate the operating margin as a) a ratio of operating margin to operating revenues, and b) as a percentage of operating revenues.

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Ratio Exercises

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