Lee Financial Statement

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Lee College Financial Statements and Analysis ACC380 Lee College Financial Statements and Analysis Lee College is a private not-for-profit organization. Organizations such as this are not owned or controlled by a government and no individual or group of individuals hold a legally enforceable residual claim to the net assets of the organization. Since the activities of private not-for-profit organizations are commonly financed through voluntary contributions, their financial statements are primarily intended for the use of donors and potential donors. According to its financial statements, Lee College appears to be efficiently utilizing its resources to fulfill its mission, rather than for fund-raising and administration. Lee College’s…show more content…
Further, separate revenues, expenses, gains, losses, and reclassifications are also provided for each class of net assets. It can also be noted that expenses are reported as decreases in unrestricted net assets. The Statement of Cash Flows is the third statement required. This statement uses the standard FASB categories of operating, investing, and financing. Either the direct or indirect method is permitted. Statement 117 “requires that donor-restricted cash that must be used for long-term purposes is classified as cash flows from financing activities” (Copley, 2011, p. 318). Typically at the bottom of the statement is where noncash and financing activities are shown, as their disclosure is also…show more content…
These statements now may be used in evaluating the performance of Lee College. Evaluating the performance and financial position for not-for-profit organizations and governments is difficult because they vary greatly in size. Their relative performance based on gross amounts reported in the financial statements does not provide a clear picture and in order to facilitate comparisons; many that use the financial statements often calculate ratios. The most commonly used measure of not-for-profit efficiency is the program expense ratio. This ratio is calculated by taking a total of the program expenses and dividing by the total expenses for an organization. It provides a measure of the efficiency of the not-for-profit organization in utilizing its resources to fulfill its mission, rather than the fund-raising an administration. For Lee College, the program expenses total an amount of $13,550,000. This figure is taken from the total of educational and general expenses line of the Statement of Unrestricted Revenues, Expense, and Other Changes in Unrestricted Net Assets. The auxiliary enterprises expenses are not calculated in this amount because they include college operations that are usually intended to be self-supporting. Lee College’s total expenses equal an amount of $17,050,000 which

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