The financial statements analysis is a crucial practice in seeking to understand strengths and vulnerabilities. That helps identify possible risks and areas that can be leveraged for better performance. Also, it is crucial in establishing an organization’s competitiveness. In that respect, this report presents a summary of Kansas City YMCA’s financial statements analysis identifying short-term as well as long terms strengths and vulnerabilities. The report also provides an overview of the nonprofit organizations effectiveness and competitiveness.
The organization identifies and responds to social needs that are critical for the people of the Kansas City since the year 1860. They do that by developing skills and the emotional well-being of the community through training and education and, provision of financial assistance and support to healthier communities in collaborations with the policymakers. The organization achieves that with the support of volunteers, leaders, partners and donors across Kansas (Kansas City YMCA, 2015a). In 2013, it touched 158,872 people’s lives across the Kansas City. The organization’s volunteers are the key to its operations with over 3,653 volunteers providing service hours in 2013 when 3,842 people donated to the organization. In 2014, grants and support campaign provided $3,552,874 for charitable assistance, free and subsidized programs as well as scholarships to $47,805 (Kansas City YMCA, 2015b).
Immediate financial strengths and vulnerabilities
An organization’s short-term strengths and vulnerabilities are defined by its ability to meet its short-term obligations. In that respect, the organization’s short-term solvency over years 2011, 2012 and 2013 which was 0.92, 1.04 and 2.1 respectively shows improving solvency. In that respect, the organization has improved from the 2011 inability to cover current liabilities using the current assets to the 2012 and 2013 years where current assets were significantly higher to pay for the liabilities.
Long-term financial strengths and vulnerabilities
Long time strengths and vulnerabilities are defined by the ability to sustain operations. Among the key measures of the ability is the long term’s solvency that determines the ability to meet the longer obligations. In that respect, the organization's past solvency trend show a decrease over the years 2011, 2012 and 2013 with a solvency of 55%, 55%, and 52% respectively.
Also, the organizations funding could be uncertain given that it is greatly dependent on the support of donors, community and organizations. In that respect, there is a risk given that there could be policy changes that could negatively affect funds sources from government agencies while possible public image issues could negatively impact support from donors and the community (Guide Star, 2015).
Organization’s effectiveness and competitiveness
An organization competitiveness and effectiveness are determined by various aspects including its ability to raise funds, suitability of its revenue sources as well as its cost control measures. In that respect, the organization’s past performance in revenues, funds sourcing and management can be summarized as follow.
The 2014 revenues and public support totaled to $41,808,392 while that of 2013 amounted to $40,508,016. That shows an improvement in revenues collection hence enhancing the organization's foundation. The 2014 public support comprised of 71% grants and fees from the government agencies, 20% United way’s grants and 9% contributions, all totaling to $11,646,607. In 2013, public support amounted to $20,750,517 comprising of $7.6M in grants and fees from the government agencies, $1.07 M from United way’s grants and $2.04M from contributions. That indicated an increase in grants in 2014 compared to 2013. On the other hand, 2014 earned revenues comprised of 55% of the organization's programs and 45% from memberships totaling to $30,161,785. In 2013, earned revenue amounted to $29,757, 499 comprising of $16.13M from the organization's programs and $13.65M from memberships. The revenues also showed an improvement (Kansas City YMCA, 2015b).
Regarding the expenses, the programs and services expenses for 2014 totaled to $41,809,392 with the programs costing $34,594,957 while allocated expenses amounted to $7,213,435. In 2013, the program expenses amounted to $34,141,725 while allocated expenses amounted to $6,366,291. That indicated an increase in expenses with relatively more increase in allocated expenses. For program expenses, healthy living accounted for 37% of the expenses, youth’s development 43% and headset 20%. In 2013, healthy living amounted to $13.48M, youth’s development $13.9M and headset 6.7M. For the allocated expenses, supporting services accounted for 64% of the expenses while the change in the net assets accounted for 28%, and financial costs accounted for 8%. In 2013, supporting services amounted to 4.8M, change in the net assets amounted to $0.822 M and financial costs amounted to $0.66M (Kansas City YMCA, 2015b).
In view of the analysis, it is clear that the organization has been effective in fundraising management as well as cost control given that its revenues have been rising with having a gradual rise in line with activities increase. In that respect, the organization is effective and its funds management enhances competitiveness as a leading social support provider in the Kansas City. The improving funds management is also demonstrated by the following chart.
Source: (Guide Star, 2015).
The chart indicates an improvement in management with expenses in 2012 and 2013when they were less than revenues compared to the year 2011 when the expenses exceeded the organization’s revenues (Guide Star, 2015).
Guide Star. “YMCA of Greater Kansas City.” Web. 24 July 2015. http://gkccf.guidestar.org/profile/1415/ymca-greater-kansas-city.aspx
Kansas City YMCA. “Legacy of Service,” 2015a. Web. 24 July 2015. http://www.kansascityymca.org/ymain/713
Kansas City YMCA. “YMCA 2012 Annual Report,” 2015b. Web. 24 July 2015. http://issuu.com/ymca2012annualreport/docs/ymcaofgkc_2014annualreport_issu?e=8042650/12867041