Hsm 260 Final Composition

HSM 260


Feb 23, 2013

Calculation of Ratios:

Ratio| 2003| 2005

Current Ratio = Current Asset Current Liability| 0. 87| 0. 90| Long-Term solvency Ratio = Total Property / Total Liability| 1 ) 38| 2 . 06| Contribution Ratio sama dengan Largest Revenue Source/ Total Revenue| zero. 51| zero. 49| Management Expense Rate = Administration Expense/Total Expense| 0. 282| 0. 226| Program Expense Ratio sama dengan Program Expense/Total Expense| 0. 66| zero. 72| Income Expense Rate = Total Revenue/Total Expense| 0. 945| 0. 111

Importance of Proportions:

Current Ratio: Current proportion measures the capability of the business in paying current the liability. Higher the present ratio, better the fluidity position in the company. Generally, a current ratio of 2: one particular is considered nearly as good. Current Ratio = Total Current Property / Total Current Legal responsibility 2003 Current Ratio=$82, 058. 00/$93, 975. 00=0. 87

2005 Current Ratio=$302, 902. 00/$337, 033. 00=0. 898=0. 85

Current ratio of XYZ firm is increasing from zero. 75 in year 2002 to 0. 90 in year 2004. It indicates that organization has good liquidity and in a position of spending current liability. XYZ provides actually increased its liquidity position.

Long term solvency Percentage: Long-term solvency ratio assess a industry’s ability to meet interest and principal obligations on long lasting debt and similar commitments. It is the best indicator intended for assessing long lasting solvency risk is a business ability to generate earnings during years. Long lasting solvency Rate = Total Asset as well as Total Responsibility

2003 Long-Term solvency Ratio=$359, 863. 00/$259, 979. 00=1. 38

2005 Long-Term solvency Ratio= $699, 004. 00/ $338, 937. 00=2. summer

Long-Term solvency ratio provides improved coming from 1 . dua puluh enam in year 2002 to 2 . 06 in season 2004. It implies that XYZ has superior its ability to meet log-term debt responsibilities and its long lasting solvency is usually intact.

Contribution Ratio: Contribution ratio is described as a proportion of most significant revenue coming from a supply and total revenue. This kind of ratio explains to how much a particular source of income contributes to major margin from the company. It also indicates the dependence create profit of the company on one source. Contribution Ratio sama dengan Largest Earnings Source/ Total Revenue

2003 Contribution Ratio= $632, 889. 00 $1, 244, 261. 00=0. 508=0. 51 2005 Contribution Ratio=$1, 078, 837. 00/$2, 191, 243. 00=0. 49

2003 Contribution ratio of XYZ is definitely 0. fifty-one and in 2005 Contribution proportion is zero. 49, this means the single resource is surrounding over half or near half of the gross margin. XYZ should cure the dependence on sole source.

Managing Expense Proportion: Management expenses include advertising, administrative costs, sales expense. It is not operating expense. Excessive Management expenditure ratio can be not regarded as good. Any company will try to lower its supervision expenses to control cost. Managing expense ratio is defined as the management expenditure as a percentage of total cost. Administration Expense Ratio = Administration Expense/Total Price

2003 Supervision Expense Ratio=$371, 101. 00/$1, 316, 681. 00=0. 2818=0. 282 2004 Management Charge Ratio=$445, 819. 00/$1, 972, 131. 00=0. 226

Management Expense rate has decreased from 29. 6% in year 2002 to twenty-two. 6% in year 2005. It is a good indication and demonstrated that XYZ has been capable of controlling its administration expenses.

System Expense Proportion: Program Expenditure ratio is very important for Non-profit organizations. It indicates how much with the total expenses of a non-profit organization is definitely program related. High software expense proportion indicates that non-profit organization is more useful and it will help the organization in fund elevating. Generally System expense proportion more than 74% is considered as good. Program Expense Ratio = Program Expense/Total Expense

2003Program Expense Ratio=

520, 069+171, 622. 77+150, 000+24, 000=865, 691. 77

865, 691. 77/1, 316, 681=0. sixty six

2004 System Expense Ratio=

915, 787. 20+320, 525. 52+150, 1000. 00+24, 000. 00=1410312. seventy two

1, 410, 312. 72/1, 972, 131=0. 72



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