Analysis of Penumbra's Financial Statement
Julie VW
SMU
Non-Profit Financial Management I AA660
November 16, 2002
Based on the information in the financial statement, it appears the Penumbra Theatre Company took big steps in fiscal year ‘97 to reverse previous trends becoming a profitable and financially healthy organization. Looking at Penumbra's ability to pay what they owe, the accumulated profits and losses, and the amount of money that stays with the organization, in both 1996 and in 1997 indicates that their financial position in 1997 is good when compared to widely accepted standards, and excellent when compared to the financial activity of previous years.
At the end of fiscal year ‘95 Penumbra Theatre had accumulated $108,264 in losses. During fiscal year ‘96, the company kept $.04 for every dollar that came into the organization, (exhibit 6) the other $.96 paid for expenses associated with earning the money. The company lost an additional $57,111 that year bringing total losses to $165,375. At the end of fiscal year ‘96, with a current ratio of .38, (exhibit 1) Penumbra did not posses or expect to receive enough money to pay all bills and obligations due within 12 months.
In fiscal year ‘97 things changed. For the first time in at least two years, due in large part to contributions, the organization made money instead of losing it! During that year, the Penumbra Theatre Company kept $.25 of every dollar that came into the organization (exhibit 5). The change in net assets increased by 1093% (exhibit 4) with $567,342 profit at the end of the fiscal year. The 1997 current ratio of 1.95 (exhibit 2) implies that Penumbra has the resources to honor their short term obligations.
The Penumbra Theatre Company grew financially in 1997 to became an organization with resources to fund their mission. In Fiscal year ‘97, the company's current ratio increased 413% (exhibit 3), profits increased by 1093% (exhibit 4), and money staying in the organization increased by 525% (exhibit 7). The huge increases in key areas of operation indicate that Penumbra's financial position is excellent when compared to the financial activity of previous years.
Exhibit 1 Current ratio for FY ‘96
112,660 / 294,798 = 0.38
Exhibit 2 Current ratio for FY ‘97
471,474 / 242,401 = 1.95
Exhibit 3 Change in current ratio
‘97 ‘96 + / - % + / -
Change in
Current Ratio 1.95 .38 1.57 1.57 / .38 =
413%
Exhibit 3 Change in net assets
F.Y. '97 F.Y. ‘96 $ + / - % + / -
Change in Net
Assets 567,342 (57,111) 567,342
-(57,111)
_______
624,453 624,453 /
57,111 =
1093%
Exhibit 4 Total Margin ‘97
567,342 / 2,269,224 = .25
Exhibit 5 Total Margin ‘96
57,111 / 1,293,090 = .04
Exhibit 6 Changes in total margin
F.Y. ‘97 F.Y. ‘96 $ + / - % + / -
Total Margin .25 .04 .25-.04 = .21 .21/.04 = 525%
