Business 6600 essay, APA, 3 references, 650 words

Amyotrophic lateral sclerosis (ALS), also called “Lou Gehrig’s Disease,” is a progressive degenerative disease that affects nerve cells in the brain and spinal cord.  A non-profit organization, the ALS Association, is dedicated to defeating the disease.  It raises money and directs research to this end.  The Ice Bucket Challenge recently in the news raised over $100 million for such efforts.

There are many other non-profit organizations (see List of Nonprofit Organizations for examples http://charity.lovetoknow.com/List_of_Nonprofit_Organizations) that depend on donations to foster their efforts as well.

Financial ratios may help contributors better assess the financial health of a non-profit organization or how efficiently/effectively it uses donations.  The challenge is that the financial analysis applicable to for-profit organizations is only partially useful for nonprofit organizations.  For example, nonprofit organizations generally do not have profit margins; revenue streams are different; and, equity is much different.

Propose and name a new ratio (i.e., one that is not in the text) that could be used in the financial analysis of a nonprofit organization.  Identify the non-profit organization; explain what specific financial information would be needed; how the ratio would be calculated; and, what the ratio would communicate about the financial health of the organization.

Discuss what you see as your proposed ratio’s pros and cons.

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