Presented below are financial statements (except cash flows) for two not-for-profit organizations. Neither organization has any permanently restricted net assets.

A. Calculate the following ratios:
• Program expense
• Fund-raising efficiency
• Working capital
B. For each ratio, explain which of the two organizations has the stronger ratio?

Statement of Activities ABC Not-for-Profit XYZ Not-for-Profit Temporarily Temporarily Unrestricted Restricted Unrestricted Restricted Revenues $2,250,000 3,327,500 750,000 3,200,000 Program service revenue Contribution revenues Grant revenue Net gains on endowment $5,595,000 96,000 $1,025,000 17,500 Net assets released from Satisfaction of program 50,000 (450,000 377,000 377,000) 9,390,000 Total revenues 96,000 5,827,000 648,000 Expenses Education program expenses Research program expense 5,621,000 1,256,000 1,559,000 2,256,000 Total program service Fund-raising Administration 6,877,000 456,000 650,000 3,815,000 356,000 1,229,000 Total supporting service 1,106,000 7,983,000 1.407,000 4,208,000 1,585,000 Total expenses Increase in net assets Net assets January 1 Net assets December 31 5,400,000 396,000 759,000 1,037,500 320,000 427,000 648,000 $5,615,000 $1,155,000 $1,464,500$ 968,000 STATEMENT OF NET ASSETS ABC Not-for-Profit XYZ Not-for-Profit Current assets Cash Short-term investments Supplies inventories Receivables $ 105,000 265,000 32,000 239,500 641,500 $ 256,000 99,000 150,000 88,500 593,500 Total current assets STATEMENT OF NET ASSETS ABC Not-for-Profit XYZ Not-for-Profit Noncurrent assets Pledges receivable Long-term investments Land, buildings, and equipment (net) 465,000 2,590,000 3,275,000 6,330,000 $6,971,500 1,968,000 1,968,000 $2,561,500 Total noncurrent assets Total assets Current liabilities Accounts payable $ 23,000 23,000 S 129,000 129,000 Total current liabilities Noncurrent liabilities Notes payable Total noncurrent liabilities Total liabilities 178,500 178,500 201,500 29,000 Net Assets Unrestricted Temporarily restricted Permanently restricted 5,615,000 ,155,000 1,464,500 968,000 0) 2,432,500 $2,561,500 1 6,770,000 $6,971,500 Total net assets Total liabilities and net assets