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Financial Ratios for Seventh day Adventist Academies DS Penner PhD AD Lopes MA North American Division Office of Education Proj by xkv17320

VIEWS: 53 PAGES: 23

									          Financial Ratios
for Seventh-day Adventist Academies

               DS Penner, PhD
                AD Lopes, MA




  North American Division Office of Education
             Project Affirmation
               1990 ( revised 2005)
Purpose of the Book: The purpose of this book is to provide an additional way to look at
the fina ncial h ealth o f Adve ntist aca dem ies. Fina ncial ra tios are w idely u sed in busin ess to
explain relationship between different elements in the financial operations. This book,
origina lly w ritten in 199 0 as a pa rt of Project Affirmation, is designed to be used primarily in
Seventh-day Ad ventist secondary schools. Along with the statement of financial activities
and a “H igh ligh ts” pa ge (s ee Pe nn er, The Fin ancial Repo rt) administrators, managers and
boards will better understand the financial condition of the school. Excepting the definitions
and form ulas wh ich are technical by their very nature, the m aterial is written in less
technical terms so that persons without extensive training in financial accounting will be
able to understand and utilize the ratios in decision-making. While financial ratios may
hav e not b een w idely u sed in SD A seco nda ry schoo ls, it is hope d tha t the su gge stions in this
doc um ent will help provide a nother a ven ue for un derstan din g.

Contents: The first section (pp 3-5) introduces the concept of financial ratios. The second
section (pp 6-15) consists of a selection of twenty-one financial ratios that might be useful
in the secon dary sc hool se tting. Th ese w ere selected and ada pted from d ozen s of possib le
ratios currently used in higher education and by commercial businesses. Not all ratios may
be practical or beneficial in every situation a nd each school will, no dou bt, choose those
ratios that appear to be most useful in their situation. Each ratio is defined four
ways–m oving from general to specific. The Purpose of the ratio is sum marized in a one-
senten ce statem ent an d is follow ed by a sim ple, no n-tech nical Explanation that will help the
reader to interpret the ratio. Both the Definition and the Form ula are w ritten in m ore
technical terms for those who will calculate the ratios. This section concludes with a
sum ma ry of the academ y financial ratios (pp 15 -16). The third section (p p 17-2 2),
populated with real but dated figures, has been left in this revision simply as a samp le of
what the ratios look like as trends or comparisons. The ratios were prepared from
inform ation su bm itted in 199 0 by fou r academ ies, tw o bo arding and two day academ ies. A
short bibliography of works used in preparation of this documents concludes this document
(p 2 3). A cad em y fina ncia l state m ents use d to calcu late the ra tios a re no t referen ced.

Sup plem ent: In 1990 a fourth section, printed separately, w as also prepared w hich
contained ratios reported in financial statements submitted by many academies at that
time. The ratios were reported according to size and type (day or boarding) and showed the
av era ge s and the ra ng es for e ach ra tio. Th is w as pa rtic ularly valua ble for com pa rin g one ’s
indiv idua l schoo ls with SD A na tiona l norm s. If a school foun d itself outs ide the rang e it
cou ld ex am the re asons for th at differen ce an d pe rhaps m ake som e po sitive adju stm ents.
How ever, this in form ation ag es rap idly and a com parison with olde r data is n ot as useful.
Since it has not been updated, it is not included in this revision. New averages should be
calcula ted e very five ye ars and distrib uted in a ne w sup plem ent.

Sin ce the o rigina l pub lication is no lon ger in p rint, it is hop ed tha t this revised docu m ent w ill
make this m aterial available once again. Although the current comp arative ratios are not
available at this tim e, it is still felt that the explan ation of the ratios can be of help to th ose
wis hin g to k now m ore abou t the academ y fina ncia l situation.
                                                                                               DS Penn er
                                                                                      11 September 2005




Financial Ratios for Seventh-day Adventist Academies, revised 2005, Penner and Lopes                 page 2
Part I: Introduction
Those re spo nsib le for th e m anagem ent of Seven th-d ay A dve ntist edu catio nal institutions are
regu larly con fronte d w ith th e task of ev alu atin g th e fina ncia l ope rations o f the sc hoo l.
School principals and business manag ers, board mem bers and chairpersons are all called
upon to make important decisions about schools based on their understanding of the
financia l repo rts of th e org anization.
     In order to make decisions on the future needs of the school, they must be able to see
trends and make comparisons. This can be done through a detailed analysis of the financial
statements. In order to make a more informed decision one mu st know where to look for
the pe rtinen t inform ation , und erstand the figu res wh en loca ted, interp ret the da ta so as to
perceive trends, project that information to the future, and then apply the information to the
current decision to be made. Software accounting packages can present a wide range of
detail of which much is included in the monthly statements. If everything is included in the
financial report, board members and administrators face an imm ense task of sorting through
the minutia. There must be a better way to see the “big picture” and scan the various
trends. Financial ratios are just the thing –a type of shortha nd or snap shot giving a quick
check on sp ecific financia l issues.
     Further few b oard m em bers hav e the tim e or patien ce to com plete this process fo r every
item on the agenda. In addition, many are not trained in accounting and are often
overwhelmed and confused at what is presented. Instead of focusing on decision-making,
tim e is used in attem pting to find th e inform ation (som e acad em ies ha ve bee n kn own to
produce m onthly finan cial statemen ts several hund red pages in length) or in m aking sen se
of the figures presented. If vital informa tion could be reduced to a few , simple percen tages,
m ore ind ividu als w ould be ab le to qu ickly un derstan d the o verall situ ation and particip ate in
decisio n-m akin g. Fina ncial ra tios are de sign ed to as sist in this effort.
     The id ea of finan cial ratios is w idely u sed in busin ess an d ha s been ada pted for use in
higher education. In order to assist in understanding the finances of the academies and as
an aid to pla nn ing , the “F ina ncia l Stra tegies Ta sk Fo rce” for Project Affirmation in 1990
requested that this information be collected and made available to the North American
Div ision second ary sc hoo ls.
     The concept of this book was originally inspired by Ratio Analysis in Higher Education
prepared by individuals associated with Peat, Marwick, Mitchell & Co.; L. F. Rothschild,
Unterberg, Towbin; and John M inter Associates, Inc. Some ratios such as the balance sheet
and operating ratios are taken from the Academy Accounting Manual prepared by the
General Conference of Seventh-day Adven tists Auditing Service.

Definition: Financial ratios simply state a relationship between two numbers. By combining
two n um bers, a th ird, possib ly m ore usefu l, figure can be create d. Ch abo tar (19 89) in
"Financial Ratio Analysis Comes to Nonprofits" notes that relationship between tuition
revenu es an d in struc tion al ex pen se m ay b e m ore u seful tha n either n um ber a lone (p 1 88 ).
Further, Brigham (1989) suggests that financial ratios are "designed to reveal the relative
strengths and weaknesses of a company as compared to other companies in the same
industry, and to show whether the firm's position has been improving or deteriorating over
time" (p 2 87).
    As n oted , in th e bu sine ss com m un ity fin ancial ra tios a re w idely us ed. The p rim ary
purposes a re in ma nagerial an alysis and in determin ing credit worthin ess. Other uses, just
to nam e a few , includ e: estim ating sales, pred icting co rporate failu re, determ ining credit
ratin g, an d ca lculatin g risk . The em ph asis m ay d iffer som ew hat in n onp rofit org anizations.
Wh ile other organizations stress profitability, Anthony (1980) advises, the "emphasis of
ratio ana lysis in n onp rofits is o n ste wa rdsh ip and acco un tab ility" ( cited by C habotar, p 1 89 ).
Stewardship and accountability are unquestionably high priority goals for SDA educational
institutions.

Financial Ratios for Seventh-day Adventist Academies, revised 2005, Penner and Lopes                 page 3
The Use of Financial Ratios: In a sch ool se tting ratios are d esig ned to sh ow in ve ry
simple terms the financial strength of the school, its reliance on specific sources of funding,
and the percentage of that funding needed for major categories of expense. The great
strength of financial ratios is that it adjusts for both the effects of time and a cross
organizations. This allows comparison with various size organizations and over a period of
years where a similar comparison of actual figures would be confusing due to inflation and
grow th/d eclin e.
    There are several types of ana lysis in which financial ratios are used. “Trend an alysis”
examines the school's financial ratios over time and is used to determine the improvement
or deterioration of its financial situation, a shift in funding, or an area of increasing expense.
To care for abnormalities in financial trends, a minimum time span recommended is five
years. “Co m parativ e ratio an alysis” co m pares o ne sch ool's ratios w ith tho se of othe r schools
with similar characteristics. Comparisons are particularly useful for demand and
con tribu tion ratios .
    A review of academy financial statements shows that the ratios most comm only reported
are the Cu rren t Ra tio, the Liquid ity R atio and the Percentage of Required Working Capital
Ra tio. Although useful, these ratios reveal only one aspect of the financial picture. Other
areas of academy operations perhaps not reported as ratios are the demand and
contribution ratios. These ratios includ e am ong oth ers: personnel resource allocations;
dependence on student financial aid; plant operation and maintenance costs; and church/
conference sub sidies.
    A word of caution is in order at this point. Financial ratios are only one of many
m ethod s of evalu ation . Other ev alua tion an d repo rting tech niqu es should b e com bine d to
com plete th e pictu re of the sch ool at an y give n m om ent. Ra tios can also be mis leadin g if, in
com paring scho ols or o ne y ear w ith a nother, classificatio n of in com e an d ex pen ses vary
exte nsiv ely. C habotar als o cau tion s the users to rem em ber th at national norm s are
"averages not ideals" and that they are only "a reflection of prevailing and sometim es
undesirable, financial conditions" (p 191). Consequently, a school may wish to choose a
different ta rget fo r its pa rticular situ ation oth er tha n th e reported norm .
    Analytical tools, such as ratios, reveal important information about a given financial
entity. The challenge facing academy administrators and board members is to understand,
interpret and take the necessary steps to ensure that academy resources are optimized and
that its mission is achieved. Ignoring the warnings of financial indicators such as
represented in these ratios is similar to a pilot who, as the aircraft takes off on a flight from
New York to Lo ndo n, disreg ards a g aug e indic ating low fu el. Finan cial ratios ca n he lp to
focus d iscussio n an d dec ision-m akin g on essentia l issues a nd ca n he lp give valua ble
direction to academy administration and board.




Financial Ratios for Seventh-day Adventist Academies, revised 2005, Penner and Lopes             page 4
Som e Exam ples of Financial Ratios: In the following sections twenty-one financial ratios
are d eveloped. Thes e ratio s are m erely exam ples ; the re are m any oth ers. Th ese ra tios a re
defined in the following section.

A. Balance Sheet Ratios
   N Liqu idity R atio
   N Cu rrent Ra tio
   N Percentage of Required Working Capital
   N Percentage of Re ceivables to Op erating Fun d Balan ce
   N Debt Percentage
   N Percentage of Operating Fund Balances to Earned Operating Income

B. Operating Ratios
   N Percentage of Net Income to Total Earned Income
   N Percentage of Operating Expense to Total Earned Income
   N Accounts Receivable Turnover

C. Contribution Ratios
   N Tuition to Op eration Expe nse R atio
   N Au xiliary Ind epen den ce Ra tio
   N Con ference S ubs idy to O peratin g Exp ense R atio
   N End owm ent an d Inve stm ent Inco m e to Op erating Expe nse R atio

D. Dema nd Ratios
   N Person nel C osts to Inco m e Ra tio
   N Instruction al Person nel C osts to Tu ition Inco m e Ra tio
   N Adm inistrativ e Person nel C osts to Tu ition Inco m e Ra tio
   N Su ppo rt Staff Person nel C osts to Tu ition Inco m e Ra tio
   N Stu den t Labo r (On- Cam pus ) to Tota l Stud ent Inco m e Ra tio
   N Percen tage o f Em ploye e Rela ted Ex pen se to Tota l Person nel C osts
   N Op eration and Ma inten ance of Plant to Incom e Ra tio
   N Sch olarsh ip to Tu ition Inco m e Ra tio




Financial Ratios for Seventh-day Adventist Academies, revised 2005, Penner and Lopes          page 5
Part II: The Financial Ratios

A. Balance Sheet Ratios
   N Liqu idity R atio
   N Cu rrent Ra tio
   N Percentage of Required Working Capital
   N Percentage of Re ceivables to Op erating Fun d Balan ce
   N Debt Percentage
   N Percentage of Operating Fund Balances to Earned Operating Income

Liq uid ity R atio
Purpose: The purpose of the Liquidity Ratio is to measure the academy's ability to repay
debts that are du e within on e year using its ava ilable cash resources.

Explanation: The higher the ratio the better. A ratio of 1:1 (100%) or higher indicates that
the organization is capable of paying all its current financial commitments as listed on the
bala nce sh eet.

Definition:
   Nu m erato r: Cash an d Ban ks include all C ash, Ma rketable Secu rities (such as bond s,
   stock certifica tes, certificates of d epo sit or of in deb tedn ess, etc) an d oth er Investm ents.
   Receivab les from High er Organiza tions are funds du e to the academ y by the C onference
   or Un ion.

    Den om inator: Cu rrent Liab ilities inclu de all cla im s or oblig ation s expe cted to b e paid
    within a year. Total Operating Fund Balance includes Allocated and Unallocated Fund
    Balan ces.

                                  Cash a nd Ba nks
                         +        Securities and Investmen ts
                         +        Receivab les from High er Organiza tions
                                  Total Current Liab ilities
                         +        Unallocated and Allocated Operating Fund Ba lance



Cu rre nt Ra tio
Purpose: The purpose of the Current Ratio is to measure the academy's ability to repay
debts that are due within one year using its available cash and other assets easily converted
into cash .

Explanation: This ratio me asures liquid ity and solven cy. If the ratio is 1:1 (100 % ), debts
which m ust be paid within one year are just covered by available current assets. The rule of
thum b is: the greater the ratio the better. (The usua l ratio is 2:1).

Definition:
   Nu m erato r: A Current Asset is unrestricted cash or other asset which can be converted
   into cash or other similar asset, or useful goods or services, within one year. Examples
   of Current Assets are: Cash , Accounts R eceivable (Ne t), Notes Receivable (C urrent),
   Mercha ndise an d Sup plies, Prepaid Expen ses, Due from O ther Fund s, etc.

    De nom inator: A Current Liability is an existing obligation or claim against existing
    assets, expected to be pa id within a year or less. Examp les of Current Liabilities are:

Financial Ratios for Seventh-day Adventist Academies, revised 2005, Penner and Lopes               page 6
    Accounts Payable, Notes Payable (Current), Deferred Restricted Operating Income,
    Depo sits, etc.

    It is imp ortant to ensu re that rece ivab les are ind eed co llectible a nd in vento ries usab le if
    the ratio is to be a m ean ing ful in dica tor of fin ancial p ositio n.

                                  Total Current A ssets
                                  Total Current Liab ilities



Percentage of Required Working Capital
Purpose: The purpose of the Percentage of Required Working Capital ratio is to show the
academ y's financial ability to continue op erations for a short period of time (say 2 m onths)
withou t any incom e and still be able to m eet its obligations.

Explanation: The higher the ratio the better. A percentage of 100 or above indicates that
the academy has at least adequate funds to meet operational expenses for 1.8 months if the
den om inatio nal p olicy of 15 % is used in the ra tio (see D efinition below ). A favora ble ratio
does n ot nece ssarily m ean that th e acad em y has sufficient C ash b ecau se the C urrent A ssets
ava ilab le m ay n ot be in th e form of Ca sh o r easily con verte d in to Cash .

Definition:
   Nu m erato r: Working Capital represents the difference between Total Current Assets and
   Tota l Cu rrent Liab ilities.

    De nom inator: Requ ired Workin g Cap ital is a standard set by d enom inational po licy
    specifying the amount of working capital to be carried by an academy in order to provide
    a safe ma rgin for operational costs. For academ ies the Operating Activity fund ba lance
    shou ld equ al 15 % of the U nrestricted Incom e of the Ed ucatio nal a nd A uxilia ry Activity
    sections for the current year. Auxiliary Activity includes the Bookstore, Cafeteria,
    Do rm s, Lau nd ry an d S taff Ho usin g.

                                  W orking Cap ital
                                  Req uired W orking Cap ital



Percentage of Receivables to Operating Fund Balance
Purpose: The p urpo se of the Pe rcentag e of Rece ivab les to Op erating Fun d Ba lance ratio is
to show th e am ount of credit extended by the acad em y to students an d other debtors.

Explanation: The lower the percentage the better. A high percentage m ay indicate a
sizable number of delinquent debtors or that credit facilities are too generous. A norm has
not been established. The Academy Accounting Manual recommends a maximum of 60-
65% . At registration there may be a sharp increase and at graduation a decrease.

Definition:
   Nu m erato r: Accounts Receivable Net and Notes and Loans Receivable are balance sheet
   item s repre sen ting the to tal of a ccou nts a nd note s du e from stud ents an d oth er debtors
   after m akin g pro visio n for b ad or doub tful d ebts .

    De nom inator: The Un allocated an d Allocated O perating Fu nd Ba lance is the difference


Financial Ratios for Seventh-day Adventist Academies, revised 2005, Penner and Lopes                page 7
    between the Total Assets and Total Liabilities in the Operating Fund, but excludes any
    long term Acco un ts Pa yab le.

                                  Accou nts R eceiva ble N et
                         +        Notes and Loans Receivable
                                  Unallocated and Allocated Operating Fund Ba lance



Debt Percentage
Purpose: The purpose of the Debt Percentage ratio is to show the degree of relative
freedom from creditors dema nding repaym ent of debts.

Explanation: The lower the percentage the better the position. A low percentage indicates
that th e acad em y is largely free from p ressure to p ay acc oun ts, due to creditors, tha t fall
within the current year. If debt percentages are high or increasing, it is a signal for caution
to administration.

Definition:
   Nu m erato r: A Cu rrent Liab ility is an e xisting obliga tion or cla im aga inst exis ting a ssets
   expe cted to b e paid with in a ye ar or less. Exa m ples of C urrent Lia bilities are: Accou nts
   Pay able, No tes Pa yab le (C urren t), De ferred Res tricted Op eratin g Inc om e, De pos its, etc.
   Other Operating Liabilities are non-current comm itments and include, for examp le,
   Ag enc y Fu nd s, No tes Pa yab le (Lo ng Term ), Loa ns P aya ble ( Lon g-T erm ), etc.

    De nom inator: The Un allocated an d Allocated O perating Fu nd Ba lance is the difference
    between the Total Assets and Total Liabilities in the Operating Fund, but excludes any
    long term Acco un ts Pa yab le.

                                  Total Current Liab ilities
                         +        Other Op erating Liabilities
                                  Una llocated & Allocated Operating Fund Balance s



Percentage of Operating Fund Balances to Earned Operating Income
Purpose: The purpose of the Percentage of Operating Fund Balances to Earned Operating
Incom e ratio is to sh ow th e short-te rm o peratin g viab ility of the ac adem y in term s of its
ability to generate income.

Explanation: The hig her th e ratio the b etter th e po sition .

Definition:
   Nu m erato r: The Un allocated an d Allocated O perating Fu nd Ba lance is the difference
   between the Total Assets and Total Liabilities in the Operating Fund but excludes any
   long-te rm Acco un ts Pa yab le.

    De nom inator: Earned Operating Income includes all income generated by the academy
    but exclud es Sub sidies, Donation s, etc.

                                  Una llocated & Allocated Operating Fund Balance s
                                  Earned Operating Income




Financial Ratios for Seventh-day Adventist Academies, revised 2005, Penner and Lopes              page 8
B. Operating Ratios
   N Percentage of Net Income to Total Earned Income
   N Percentage of Operating Expense to Total Earned Income
   N Accounts Receivable Turnover

Percentage of Net Income to Total Earned Income
Purpose: The p urpo se of the Pe rcentag e of Net Inc om e to Tota l Earne d Incom e ratio is to
show the academy's dependence on external funding.



Explanation: A positive ratio means that the academy does not rely on external Operating
Su bsid ies. A neg ative ratio m ean s tha t the academ y req uires exte rnal Op eratin g S ub sidie s.
For exa m ple, a -.95 indica tes lim ited de pen den ce, wh ile a figu re of -.75 w ould indica te
grea ter de pen den ce.

Definition:
   Num erator: Net Income refers to the balance that remains w hen all Operating Expenses
   are deducted from Earned Incom e.

    De nom inator: Earned Operating Income includes all income generated by the academy
    but exclud es Sub sidies.

                                  Net Income
                                  Earned Operating Income



Percentage of Operating Expense to Total Earned Income
Purpose: The p urpo se of the Pe rcentag e of Op erating Expe nse to T otal Ea rned In com e ratio
is to show the percentage of expenses that is covered by the income the academ y
generates.

Explanation: The lower the percentage the better. Manag ement gen erally has greater
control over Operating Expenses than over Income and this ratio shows to a certain extent
ma nagem ent's ability to control expenses.

Definition:
   Nu m erato r: Total Operating Expenses are all expenses incurred in conducting the
   regular operating activities of the academy but exclude Capital Expenditures and
   Improvem ents.

    De nom inator: Earned Operating Income includes all income generated by the academy
    but exclud es Sub sidies, Donation s, etc.

                                  Total Ope rating Expen se
                                  Earned Operating Income



Accounts Receivable Turnover
Purpose: The purpose of the Accounts Receivable Turnover ratio is to determine the
average n um ber of days it takes to collect accounts du e from studen ts and other de btors.




Financial Ratios for Seventh-day Adventist Academies, revised 2005, Penner and Lopes              page 9
Explanation: The lower the number the better. A low number indicates that students and
other debtors pa y their accou nts p rom ptly . Every academ y m ust e stab lish its cred it term s
to students and this ratio must be interpreted with this policy as a guide.

Definition:
   Nu m erato r: Net Stud ent Incom e includes Tu ition, Fees and oth er student cha rges (such
   as Do rms , Cafeteria, etc.) to stu den t accou nts w heth er actua lly received or not.

    De nom inator: The average of Accounts Receivable is calculated by adding the opening
    balance of Accounts Receivable at the beginning of the period to the closing balance of
    Accounts Receivable at the end of the period, divided by 2. To determine the average
    num ber of days to collect receivables, divide 365 days by receivable turnover. Academ y
    Balance Sheet m ay not report student separate from com mercial Accounts Receivable.

                                  Net Student Income
                                  Average A ccounts R eceivable from Studen ts
                                  (A/R Beginning + A/R Ending divided by 2)



C. Contribution Ratios
   N Tuition to Op eration Expe nse R atio
   N Au xiliary Ind epen den ce Ra tio
   N Con ference S ubs idy to O peratin g Exp ense R atio
   N End owm ent an d Inve stm ent Inco m e to Op erating Expe nse R atio

Tu ition to O pe rating Ex pe ns e R atio
Purpose: The purpose of the Tuition to Operating Expense Ratio is to show the percentage
of Operating Ex penses tha t are covered by Tuition and Fee s.

Explanation: A high ratio indicates that the academy is tuition-driven. Since Tuition and
Fees are directly related to student enrollment, an academ y that is heavily dependent on
tuition to finan ce its ope rations is suscep tible to sev ere finan cial crisis sho uld en rollm ents
decline sha rply. Conversely, a low ratio m ight indicate a sig nificant reliance on con ference
or outside funding.

Definition:
   Nu m erato r: Tuition and Fees includes all amou nts charged to student accounts whether
   actua lly received or not.

    De nom inator: Total Operating Expenses are all expenses incurred in conducting the
    regular operating activities of the academy but exclude Capital Expenditures and
    Improvemen ts as well as Auxiliary and Industry expenditures such as the Bookstore,
    Ca feteria , Dorm s, Lau nd ry an d S taff Ho usin g.

                                  Tuition and Fees
                                  Total Expen se (excluding Auxiliary an d Industries)



Au xilia ry I nd ep en de nc e R atio
Purpose: The purpose of th e Au xilia ry Ind epe nd enc e Ra tio is to sho w w hether A uxi liary
Income covers Expenses or, more imp ortantly, to what extent the auxiliaries are subsidized


Financial Ratios for Seventh-day Adventist Academies, revised 2005, Penner and Lopes             page 10
by or are subsidizing the instructional program.

Explanation: A ratio of 1 :1 (1 00 % ) or hi gh er ind icate s tha t the Au xilia ry is break ing even .
Ratios of m ore than 1:1 (100% ) indicate a profit (which ma y, in fact, be helping to reduce
the tuition rate or cover overspend ing) an d those low er than 1:1 (100% ) indicate a loss
(which ma y be draw ing resources aw ay from the in structional funds).

Definition:
   Nu m erato r: Auxiliary Income includes the Bookstore, Cafeteria, Dorms, Laundry and
   Staff Housing.

    Den om inator: Auxiliary Expense includes the Bookstore, Cafeteria, Dorms, Laundry and
    Staff Housing.

                                  Auxiliary Income
                                  Auxiliary Expense



Co nfe ren ce Su bs idy to O pe rating Ex pe ns e R atio
Purpose: The purpose of the Conference Subsidy to Operating Expense Ratio is to show the
level of financial support contributed by the conference to the operating income of the
academy.

Explanation: The h ighe r the ratio th e m ore the co nferen ce is con tributin g to the acad em y to
cover op erating expen ses. This m ay ind icate a stron g sup port for secon dary e duc ation in
the conference or it may sug gest a restructuring of tuition or the development of other
outside funding. It could also mean inefficient operation of school resources, human and
finan cial.

Definition:
   Nu m erato r: Conference Operating Subsidy is the amount of Unrestricted Funds that the
   conference provides to the academy for a given year for Operating Expenses. This may
   come in the form of salary subsidies, etc. This figure does not include any capital
   appropriations, student scholarships or any other monies which are to be used other
   than operating.

    De nom inator: Total Operating Expenses are all expenses incurred in conducting the
    regular operating activities of the academy but exclude Capital Expenditures and
    Improvemen ts as well as Auxiliary and Industry expenditures such as the Bookstore,
    Ca feteria , Dorm s, Lau nd ry an d S taff Ho usin g.

                                  Conference Operating Subsidy
                                  Total Expen se (Excluding Auxiliaries and Industries)



En do w m en t an d Inv estm en t In co m e to Ope rating Ex pe ns e R atio
Purpose: The pu rpose of the Endow me nt and Investmen t Income to O perating Exp ense
Ratio is to show the level of contribution that Endowm ent Income and Investment Incom e
ma ke toward Operating Expenses.

Explanation: A rising ratio of Endow me nt Incom e sugge sts that there has been an increase


Financial Ratios for Seventh-day Adventist Academies, revised 2005, Penner and Lopes               page 11
in th e am oun t of En dow m ents to th e aca dem y an d/o r that they ha ve b een invested we ll. A
declin ing ratio m ay ind icate a n um ber of un derlyin g factors, inc ludin g a ch ang e in
investment policy, less favorable investment opportunities, or a decline in the amount of
End ow m ents ava ilab le for in vestm ent. A de cline m ay a lso in dica te that ex pen ditu res are
rising faster than Endow men t Income.

Definition:
   Nu m erato r: Endo wm ent an d Inve stm ent Inco m e inclu des all in com e from investm ents
   and Unrestricted Endowment funds. It also includes gains and losses on investments, as
   well as expired term endowm ents, expired annuity and life-income contracts as well as
   Intere st Ea rned on o ther fund in vestm ents (un restricted) .

    De nom inator: Total Operating Expenses are all expenses incurred in conducting the
    regular operating activities of the academy but exclude Capital Expenditures and
    Improvemen ts as well as Auxiliary and Industry expenditures such as the Bookstore,
    Ca feteria , Dorm s, Lau nd ry an d S taff Ho usin g.

                                  Investment and Un restricted Endowm ent Income
                                  Total Expen se (Excluding Auxiliaries and Industries)



D. Demand Ratios
   N Person nel C osts to Inco m e Ra tio
   N Instruction al Person nel C osts to Tu ition Inco m e Ra tio
   N Adm inistrativ e Person nel C osts to Tu ition Inco m e Ra tio
   N Su ppo rt Staff Person nel C osts to Tu ition Inco m e Ra tio
   N Stu den t Labo r (On- Cam pus ) to Tota l Stud ent Inco m e Ra tio
   N Percen tage o f Em ploye e Rela ted Ex pen se to Tota l Person nel C osts
   N Op eration and Ma inten ance of Plant to Incom e Ra tio
   N Sch olarsh ip to Tu ition Inco m e Ra tio

Pe rso nn el C os t to Inco m e R atio
Purpose: The purpose of the Personnel Cost to Income R atio is to show the percentage of
Incom e that is spent on p ersonnel costs.

Explanation: The higher the ratio the larger the portion of income that is spent on
person nel.

Definition:
   Nu m erato r: Total Personnel Costs include Salary, Benefits and all other worker-related
   expenditures incurred with Administrative, Instructional and Support staff. All Student
   Lab or is ex clud ed.

    De nom inator: Total Income includes all Earned and Donated Income, including
    unrestricted Conference Operating Subsidy.

                                  Total P ersonn el Costs
                                  Total Income




Financial Ratios for Seventh-day Adventist Academies, revised 2005, Penner and Lopes           page 12
Instruc tion al P ers on ne l Co sts to T uition Inco m e R atio
Purpose: The p urpo se of the Ins truction al Person nel C osts to Tu ition Inco m e Ra tio is to
show the percentage of Tuition and Fees Income that is spent on Instructional Personnel
salaries and be nefits.

Explana tion: This ratio highlights the amount of funds that are designated for instructional
personnel, as opposed to administration, maintenance, etc., and is something of an
indication of emphasis on instruction.

Definition:
   Nu m erato r: Instructional Personnel Costs include salary, benefits and worker-related
   expenses for Teachers, Registrar and the Librarian. All Student Labor is excluded.

    De nom inator: Tuition and Fees in clud es all am oun ts charg ed to stu den t accou nts
    wh ether ac tually received or not.

                                  Instruction al Person nel C osts
                                  Total Tuition and Fees

Ad m inistrative Pe rso nn el C os ts to T uition Inco m e R atio
Purpose: The p urpo se of the A dm inistrativ e Person nel C osts to Tu ition Inco m e Ra tio is to
show the pe rcentag e of Tuitio n an d Fee s that is sp ent on Adm inistrativ e Person nel.

Explanation: This ratio provides an indication of whether administrative costs are too high,
reaso nable o r low .

Definition:
   Nu m erato r: Adm inistration Sala ries and Ben efits inclu des th e Sala ries, Ben efits and all
   worker-related costs for the Principal, Vice Principal, Adm inistrative Secretary, Business
   Manager and other office and security staff. All Student Labor is excluded.

    De nom inator: Tuition and Fees in clud es all am oun ts charg ed to stu den t accou nts
    wh ether ac tually received or not.

                                  Total A dm inistration Sala ries and Ben efits
                                  Total Tuition and Fees



Su pp ort Staff Pers on ne l Co sts to T uition Inco m e R atio
Purpose: The p urpo se of the S upp ort Staff Perso nne l Costs to T uition Incom e Ra tio is to
sho w w hat perc entage of Tu ition and Fees is spe nt on Supp ort Staff.

Explanation: This ratio p rovid es a g uid elin e to d eterm ine app ropria te lev els of S up port
Staff. It is not possible to prescribe what levels are ideal because institutions vary in age,
operation, enrollm ent size, etc.

Definition:
   Nu m erato r: Supp ort Staff inc lud es an yon e em ployed by P lan t Serv ices a nd Au xilia ry
   (Bookstore, Cafeteria, Dorms and Laundry and Staff Housing). If Industry operations
   are part of the academy, the manager's salary and benefits is also included. All Student
   Labor is excluded.


Financial Ratios for Seventh-day Adventist Academies, revised 2005, Penner and Lopes           page 13
    De nom inator: Tuition and Fees in clud es all am oun ts charg ed to stu den t accou nts
    wh ether ac tually received or not.

                                  Total S upp ort Staff Sa laries an d Be nefits
                                  Total Tuition and Fees



Stud en t La bo r (O n-Ca m pu s) to T otal S tude nt Inco m e R atio
Purpose: The p urpo se of the S tude nt Lab or (on-c am pus ) to Tota l Stud ent Inco m e Ra tio is
to show the extent to which Total Student Income returns to students in the form of on-
cam pu s studen t lab or.

Explanation: This ratio indicates the exten t to which th e academ y uses studen t labor as a
tuition discou nt.

Definition:
   Nu m erato r: Studen t Labor (on-cam pus) includ es all student labo r costs, including those
   from Instructional and Auxiliary activities (Bookstore, Cafeteria, Dorms, etc.) but
   exclu des stu den t labor in com e from indu stries or outsid e em ploym ent.

    De nom inator: Total Student Income includes Tuition, Fees and other student charges
    (such as Do rms , Cafeteria, etc.) w heth er actua lly received or not.

                                  Stude nt Labor (on ca mp us)
                                  Total Student Income



Perce ntage of Em ployee Related Exp ense to To tal Person nel Co sts
Purpose: The purpose of the Percentage of Employee Related Expense to Total Personnel
Costs ratio is to show what percentage of Total Personnel costs is spent on Benefits and
worker-related costs.

Explanation: Salaries are generally fixed for a        period of time whereas em ployee related
expe nses (se e definitio n be low) are difficult to   p redict an d can rise to un expe cted lev els
depending on many factors, for example, staff          turnover related costs, Board policies and
legal requiremen ts prescribed by governmen t.          Spiraling costs in these areas can be traced
in a trend analysis of this ratio over time.

Definition:
   Nu m erato r: Em ploye e Rela ted Ex pen ses inclu des A llowa nces a nd B enefits an d all
   worker-related costs, such as, Educational Allowances, Retirement contributions, Social
   Secu rity, Wo rkm en's Co m pen sation , Movin g costs, etc., bu t exclud e Sala ry and all
   Stude nt Labor costs.

    De nom inator: Tota l Perso nn el Co sts in clud es S alary, Be nefits an d all other w orker-
    related expen ditures incurred with Adm inistrativ e, Instruction al an d Su ppo rt staff. All
    Stu den t Lab or is ex clud ed.

                                  Em ployee Re lated Expen se
                                  Total P ersonn el Costs




Financial Ratios for Seventh-day Adventist Academies, revised 2005, Penner and Lopes            page 14
Ope ration an d M ain ten an ce of P lan t to Inco m e R atio
Purpose: The purpose of the Operation and M aintenance of Plant to Income R atio is to show
what percentage of Total Income is spent on Plant Operation and M aintenance.

Explanation: The lower the ratio the better. This ratio may indicate that plant is aging and
that the academy is required to spend more on major repairs and improvemen ts. Deferred
m ainten ance (not ke epin g up with repairs) w ill keep th is ratio low but w ill leave th e plan t in
poor condition . This ratio migh t also identify that there is wastag e or inefficiency. Since
acad em y facilities va ry in size a nd a ge, it is difficult to se t a norm , but com parison over tim e
and with facilities of sim ilar size an d ag e m ay be helpfu l.

Definition:
   Nu m erato r: Operation and Maintenance of Plant includes all operating costs including
   salaries.

    De nom inator: Total Income includes all Earned and Donated Income, including
    unrestricted Conference Operating Subsidy.

                                  Total P lant O peratio n an d M ainten ance Costs
                                  Total Income



Sc ho lars hip to T uition Inco m e R atio
Purpose: The purpose of the Scholarship to Tuition Income R atio is to give an indication of
the level of Financial Aid.

Explanation: The hig her th e ratio the g reate r the le vel of sup port that stud ents are
receiving in the form of financial assistance.

Definition:
   Nu m erato r: Scholarships includes all funds provided to students in the form of Financial
   Aid including all scholarships whether they be conference, local church, alumn i or
   acad em y and wh ether fun ded from o peratin g fun ds, end owm ents or d irect pay m ent.

    De nom inator: Tuition and Fees in clud es all am oun ts charg ed to stu den t accou nts
    wh ether ac tually received or not.

                                  Scholarships
                                  Total Tuition and Fees




Financial Ratios for Seventh-day Adventist Academies, revised 2005, Penner and Lopes             page 15
Summ ary of Academy Financial Ratios

Liquidity Ratio: The p urpo se of the Liq uidity Ratio is to m easu re the aca dem y's ability to
repay deb ts that are due w ithin one yea r using its available cash resources.

Current Ratio: The p urpo se of the C urrent R atio is to m easu re the aca dem y's ability to
repay debts that are due with in on e year u sing its availa ble cas h an d oth er assets ea sily
con verte d in to cash.

Pe rce ntag e o f Req uired W orkin g C ap ital: The purpose of the Percentage of Required
W orkin g C apital ra tio is to sho w th e aca dem y's fina ncia l ability to con tinu e op eratio ns for a
short p eriod of tim e (say 2 mo nths ) with out an y incom e and still be ab le to m eet its
obligations.

Percentage of Receivables to Operating Fund Balance: The purpose of the Percentage
of Receivables to Operating Fund Balance ratio is to show the amount of credit extended by
the acade my to students an d other debtors.

Debt Percentage: The purpose of the Debt Percentage ratio is to show the degree of
relative freedom from creditors dema nding repaym ent of debts.

Percentage of Operating Fund Balances to Earned Operating Income: The purpose of
the Percentage of Operating Fund Balances to Earned Operating Income ratio is to show the
short-term operating viability of the academy in terms of its ability to generate income.

Percentage of Net Income to Total Earned Income: The purpose of the Percentage of
Net Income to Total Earned Income ratio is to show the academy's dependence on external
funding.

Percentage of Operating Expense to Total Earned Income: The purpose of the
Percentage of Operating Expense to Total Earned Income ratio is to show the percentage of
expense s that is covered by the Incom e the academ y generates.

Acco unts R eceivab le Turn over: The p urpo se of the A ccoun ts Rece ivab le Turn over ratio is
to determine the average number of days it takes to collect accounts due from students and
other debtors.

Tuition to Operating Expense Ratio: The pu rpose of the Tuition to Op erating Expe nse
Ratio is to show the percentag e of Operating Ex penses tha t are covered by Tuition and Fee s.

Auxiliary Independence Ratio: The p urpo se of the A uxilia ry Indep end ence R atio is to
show whether Auxiliary Income covers Expenses or, more importantly, to what extent the
auxiliaries are subsidized by or are subsidizing the instructional program.

Conference Subsidy to Operating Expense Ratio: The pu rpose of the Conference
Subsidy to Operating Expense Ratio is to show the level of financial support contributed by
the conference to the operating income of the academy.

Endowm ent and Investment Income to Operating Expense Ratio: The purpose of the
Endowm ent and Investment Income to Operating Expense Ratio is to show the level of
contribution that Endowment Income and Investment Income make toward Operating
Expen ses.

Financial Ratios for Seventh-day Adventist Academies, revised 2005, Penner and Lopes                 page 16
Personnel Cost to Income Ratio: The p urpo se of the Pe rsonn el Cost to Incom e Ra tio is
to show th e percentage o f Income tha t is spent on person nel costs.

Instructional Personnel Costs to Tuition Income Ratio: The purpose of the
Instructional Personnel Costs to Tuition Income R atio is to show the percentage of Tuition
and F ees Incom e that is spent on Instructiona l Personnel salaries and benefits.

Administrative Personnel Costs to Tuition Income Ratio: The purpose of the
Adm inistrative Personnel Costs to Tuition Income Ratio is to show the percentage of Tuition
and Fees th at is spen t on A dm inistrativ e Person nel.

Support Staff Personnel Costs to Tuition Income Ratio: The purpos e of the Su pp ort
Staff Personnel Costs to Tuition Income Ratio is to show what percentage of Tuition and
Fees tha t is spent on S up port Sta ff.

Student Labor (On-Campus) to Total Student Income Ratio: The purpose of the
Stude nt Labor (on-ca mp us) to Total Stud ent Incom e Ratio is to show the extent to wh ich
Tota l Stu den t Incom e retu rns to stud ents in th e form of on-cam pu s studen t lab or.

Percentage of Employee Related Expense to Total Personnel Costs: The purpose of
the Percentage of Employee Related Expense to Total Personnel Costs ratio is to show what
percentage of Total Personnel costs is spent on Benefits and w orker-related costs.

Operation and Maintenance of Plant to Income Ratio: The purpose of the Operation
and Ma inten ance of Plant to Incom e Ra tio is to sho w w hat p ercenta ge of Tota l Incom e is
spent on Plant Operation and Maintenan ce.

Scholarship to Tuition Income Ratio: The purpose of the Scholarship to Tuition Income
Ratio is to give an indication of the level of Financial Aid.




Financial Ratios for Seventh-day Adventist Academies, revised 2005, Penner and Lopes        page 17
Part III

Academ y Exam ples: The following examples are included in this revision only as
illustrations of what a collection of ratios would look like for an academ y or what comparison
figu res m igh t tell u s if they w ere as sem bled . The se ex am ples (with n am es rem oved) w ere
taken from actual academy financial statements 1985-1988. A new comparative study
should be done to give upd ated figures.

                                          A dv en tist A ca de m y
                                               Boarding A

    Year                                                             84-85 85-86 86-87 87-88

Balance Sheet Ratios

    Liqu idity R atio                                                .15     .09        .13    .14

    Cu rrent Ra tio                                                2.04    1.58        1.97   3.93

    Percentage of Required Working Capital                         1.18      .81       1.32   2.18

    Percen tage o f Receiva bles to
       Operating Fund Balance                                        .21     .39        .30    .16

    Debt Percentage                                                  .97   1.73        1.03    .34

    Percentage of Operating Fund Balances                            .44     .30        .38   .60
       to Earned Operating Income

Operating Ratios

    Percen tage o f Net Incom e to Tota l
       E arn ed In co me                                           -.34     -.27        .10    .22

    Percentage of Operating Expense to
       Total Earned Income                                         1.31    1.28        1.16   1.10

    Accounts Receivable Turnover                                     21       19        14     16

Contribution Ratios

    Tuition to Op eration Expe nse R atio                            .76     .78        .92    .84

    Au xiliary Ind epen den ce Ra tio                                .85     .87        .89    .98

    Conference Subsidy to Operating
       Expe nse R atio                                               .11     .22        .20    .15

    Endowm ent and Investment Income to
       Op erating Expe nse R atio                                .0076 .0060 .0002 .0011




Financial Ratios for Seventh-day Adventist Academies, revised 2005, Penner and Lopes                 page 18
Demand R atios

    Person nel C osts to Inco m e Ra tio                            .47      .45       .47   .50

    Instructional Personnel Costs to Tuition
        Incom e Ra tio                                              .54      .51       .52   .52

    Administrative Personnel Costs to Tuition
       Incom e Ra tio                                               .19      .20       .15   .17

    Support Staff Personnel Costs to Tuition
       Incom e Ra tio                                               .32      .35       .35   .38

    Student Labor (On-Campus) to Total Student
       Incom e Ra tio                                               .20      .19       .19   .15

    Percentage of Employee Related Expense
       to Tota l Person nel C osts                                  .18      .20       .18   .23

    Operation and Maintenan ce of Plant to
       Incom e Ra tio                                               .29      .24       .17   .20

    Sch olarsh ip to Tu ition Inco m e Ra tio                    .0304 .0200 .1182 .1435




Financial Ratios for Seventh-day Adventist Academies, revised 2005, Penner and Lopes               page 19
Comparative Examples

    Year                                                   84-85 85-86 86-87 87-88

Balance Sheet Ratios

    Liqu idity R atio
        Academy A       (boarding)                          .15     .09      .13        .14
        Academy B       (boarding)                          .24     .08      .03        .18
        Academy C       (day)                               .78     .63      .64        .64
        Academy D       (day)                               .49     .48      .79       1.70

    Cu rrent Ra tio
        Academy A       (boarding)                        2.04  1.58  1.97             3.93
        Academy B       (boarding)                        8.82  5.59  3.14             3.40
        Academy C       (day)                             4.62 25.68 24.09             9.08
        Academy D       (day)                              .87  1.08  1.95             6.02

    Percentage of Required Working Capital
       Academy A (boarding)                               1.18      .81    1.32        2.18
       Academy B (boarding)                                .72      .78     .77         .79
       Academy C (day)                                    3.12     2.12    2.16        1.31
       Academy D (day)                                    -.09      .05     .66        1.67

    Percentage of Re ceivables to Op erating Fun d Balan ce
       Academy A (boarding)                         .21             .39      .30        .16
       Academy B (boarding)                         .58             .54      .51        .62
       Academy C (day)                              .22             .25      .20        .19
       Academy D (day)                              .92             .49      .65        .66

    Debt Percentage
       Academy A (boarding)                                 .97    1.73    1.03         .34
       Academy B (boarding)                                 .14     .16     .39         .35
       Academy C (day)                                      .28     .04     .04         .12
       Academy D (day)                                      .97     .84     .76         .40

    Percentage of Operating Fund Balances to Earned Operating               Income
       Academy A (boarding)                      .44   .30                  .38    .60
       Academy B (boarding)                      .21   .34                  .24    .25
       Academy C (day)                           .88   .61                  .54    .33
       Academy D (day)                           .17   .18                  .18    .17




Financial Ratios for Seventh-day Adventist Academies, revised 2005, Penner and Lopes          page 20
Operating Ratios

    Percentage of Net Income to Total Earned Income
       Academy A (boarding)                     -.34               -.27      .10        .22
       Academy B (boarding)                      .06                .17      .05        .03
       Academy C (day)                          -.08               -.16      .14        .07
       Academy D (day)                          -.08               -.09      .01       -.02

    Percentage of Operating Expense to Total Earned Income
       Academy A (boarding)                     1.31   1.28                1.16        1.10
       Academy B (boarding)                     1.11   1.04                1.11        1.12
       Academy C (day)                          1.69   1.71                1.40        1.42
       Academy D (day)                          1.46   1.52                1.33        1.38

    Accounts Receivable Turnover
       Academy A (boarding)                                130      132       99       109
       Academy B (boarding)                                194       91       79        70
       Academy C (day)                                      38       33       39        57
       Academy D (day)                                     125       66       64        59



Contribution Ratios

    Tuition to Op eration Expe nse R atio
        Academy A (boarding)                                .76     .78      .92        .84
        Academy B (boarding)                                .61     .91      .98        .90
        Academy C (day)                                     .51     .45      .48        .45
        Academy D (day)                                     .66     .62      .71        .68

    Au xiliary Ind epen den ce Ra tio
        Academy A (boarding)                               .85      .87     .89         .98
        Academy B (boarding)                              1.63      .99     .70         .73
        Academy C (day)                                    .94     1.39    1.47        1.39
        Academy D (day)                                      -        -       -           -

    Con ference S ubs idy to O peratin g Exp ense R atio
       Academy A (boarding)                            .11          .22      .20        .15
       Academy B (boarding)                            .15          .22      .19        .20
       Academy C (day)                                 .14          .22      .25        .24
       Academy D (day)                                 .11          .12      .14        .13

    End owm ent an d Inve stm ent Inco m e to Op erating Expe nse R atio
       Academy A (boarding)                        .0076 .0060 .0002               .0011
       Academy B (boarding)                        .0149 .0116 .0104               .0227
       Academy C (day)                             .0000 .0000 .0000               .0000
       Academy D (day)                             .0007 .0009 .0000               .0006




Financial Ratios for Seventh-day Adventist Academies, revised 2005, Penner and Lopes          page 21
Demand R atios

    Person nel C osts to Inco m e Ra tio
       Academy A (boarding)                                 .47       .45      .47       .50
       Academy B (boarding)                                 .46       .42      .45       .47
       Academy C (day)                                      .77       .72      .67       .66
       Academy D (day)                                      .78       .84      .71       .77

    Instruction al   Person nel C osts to Tu ition Inco m e Ra tio
        Academy      A (boarding)                          .54     .51         .52       .52
        Academy      B (boarding)                          .57     .54         .50       .52
        Academy      C (day)                               .80     .95         .99      1.03
        Academy      D (day)                                 -       -           -         -

    Adm inistrativ e Person nel C osts to Tu ition Inco m e Ra tio
       Academy A (boarding)                             .19      .20           .15       .17
       Academy B (boarding)                             .17      .16           .15       .16
       Academy C (day)                                  .23      .29           .29       .30
       Academy D (day)                                     -       -             -         -

    Su ppo rt Staff Person nel C osts to Tu ition Inco m e Ra tio
        Academy A (boarding)                            .31       .34          .24       .26
        Academy B (boarding)                            .29       .29          .23       .27
        Academy C (day)                                 .13       .10          .12       .16
        Academy D (day)                                    -        -            -         -

    Stu den t Labo r (On- Cam pus ) to Tota l Stud ent     Inco m e   Ra tio
        Academy A (boarding)                                .20       .19      .19       .15
        Academy B (boarding)                                .14       .14      .15       .15
        Academy C (day)                                     .08       .11      .10       .08
        Academy D (day)                                     .11       .11      .11       .09

    Percen tage o f Em ploye e Rela ted Ex pen se to Tota l Person nel         C osts
       Academy A (boarding)                            .18      .20             .18      .23
       Academy B (boarding)                            .24      .20             .19      .19
       Academy C (day)                                 .09      .26             .30      .19
       Academy D (day)                                 .17        -               -        -

    Op eration and Ma inten ance of Plant to Incom e Ra tio
        Academy A (boarding)                         .29              .24      .17       .20
        Academy B (boarding)                         .22              .18      .12       .13
        Academy C (day)                              .09              .03      .04       .03
        Academy D (day)                                -                -        -         -

    Sch olarsh ip to Tu ition Inco m e Ra tio
        Academy A (boarding)                             .0304 .0200 .1182 .1435
        Academy B (boarding)                             .0000 .0000 .0000 .0069
        Academy C (day)                                  .0160 .0209 .0164 .0379
        Academy D (day)                                      -     -     -     -




Financial Ratios for Seventh-day Adventist Academies, revised 2005, Penner and Lopes           page 22
Selected Bibliography

    Anth ony, R. N. "Mak ing Sen se of Nonbu siness Accou nting." Harvard Business Review
       58 (May/June 1980): 83-93.

    Brig ham , Eug ene . Fundamentals of Financial Management. 5th ed. Chicago: The
        Dry den Press , 198 9.

    Chab otar, Kent John . "Financial Ratio A nalysis Com es to Nonp rofits." Journal of Higher
       Education 60, 2 (March/April 1989): 188-208.

    Genera l Confere nce Au ditin g S ervices. Academy Accounting Manual. Washin gton, DC :
       General Conference of Seventh-day Adventists, 1984.

    Minter, John; Hughes, K. Scott; Robinson, Daniel D.; Turk, Frederick J.; Buchanan, A.
       Dean; an d Pra ger, F redric J. Ratio Analysis in Higher Education. New York: Pe at,
       Marwick, Mitchell & Co., 1982.

    Office of Arch ives and Sta tistics . Fina ncial S um m ary of Edu cation al Institu tions: N orth
        American Division, 1984-1985. Washington DC: General Conference of Seventh-day
        Adven tists.

    Office of Arch ives and Sta tistics . Fina ncial S um m ary of Edu cation al Institu tions: N orth
        American Division, 1985-1986. Washington DC: General Conference of Seventh-day
        Adven tists.

    Office of Arch ives and Sta tistics . Fina ncial S um m ary of Edu cation al Institu tions: N orth
        American Division, 1986-1987. Washington DC: General Conference of Seventh-day
        Adven tists.

    Office of Arch ives and Sta tistics . Fina ncial S um m ary of Edu cation al Institu tions: N orth
        American Division, 1987-1988. Silver Spring, MD: General Conference of Seventh-
        day Ad ven tists.

    Pen ner, D avid S. “Th e Fin ancial R epo rt: Ke ep it S im ple A nd Un derstan dable” , Journal of
        Adventist Education, (December 1999/January 2000): 34-38.




Financial Ratios for Seventh-day Adventist Academies, revised 2005, Penner and Lopes            page 23

								
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