DAY 1
What are four components of Not for Profit Business Model?
Cost Structure, Revenue Structure, Capital Structure and Program, Portfolio & Aligned Mission
True or False: Best practice is to include last year’s expenses when presenting the budget to the board for review
False
BEST PRACTICE: How often should you provide financial statements to the board for review?
Monthly
JEOPARDY ROUND - ANSWER:
This ratio is used to determine an organization's liquidity by dividing the current assets by the current liabilities. If you don't currently know, well you should.
QUESTION:
What is the current ratio ?
What part of CPA Canada Handbook contains Not for Profit Standards?
Part III
Name 3 benefits of budgeting
1. Proactive planning. This should be reasonable and attainable
2. Sustainability. Put long term plans into place
3. A monitoring tool.
4. Contingency Planning
5. Mitigation of risk
Which financial statement provides a snapshot of how a company is doing at a specific point in time?
Statement of Financial Position
JEOPARDY ROUND - ANSWER:
The auditor has obtained sufficient, reliable audit evidence and believes that they are presented fairly
QUESTION:
What is an unqualified audit opinion?
What are the components of NFP Financial Statements?
Statement of Financial Position, Statements of Operations, Statement of Changes in Net Assets and Statement of Cash Flows
Name two cons when budgets lack enough information and only totals are given:
1. Lack of directional information (are things getting better or worse). Board will therefore not be able to provide
direction.
2. Does not provide a snapshot of the YTD performance/progress
What are the three components that you should use to measure ATTRACTIVENESS when evaluating a program?
Participants, Funding and Volunteers
JEOPARDY ROUND - ANSWER:
Debt ratio
QUESTION:
What is the Balance Sheet ratio you should make sure to remove Deferred Revenue from ?
What is the difference between the Deferral method & Restricted Fund Method? (discussion question)
Revenue is recognized in the period that corresponds VS revenue is recognized when it is received, regardless of when it is used.
Name the 5 stages to building a budget in order
1. Assess the NPF biz model and develop goals
2. Estimate Costs
3. Forecast Revenue
4. Structure the Budget
5. Develop the budge & get it approved
Month/Quarter/Annual Actuals VS Budget, with Variance amounts & percentages
JEOPARDY ROUND - ANSWER:
Self-sufficiency or Earned Income Ratio
QUESTION:
When ratios are used to positively identity an organization that has the majority of its revenue as earned income?
What ratio measures the proportion that earned revenue is to the total budget ? (total earned income/total expenses).