Case Study: Wamc's Overall Financial Health

559 Words 3 Pages
To: The Investors and Donors
From: Sarah Napolitano, Financial Analyst
Subject: WAMC’s Overall Financial Health
Date: May, 16 2016

WAMC, a nonprofit public telecommunications entity provided financial statements for the assessment of their overall financial health. WAMC receives substantially all of its support and revenue from listeners, underwriters, fees for the production of programming, and under various federal and state grants. Consequently, in conducting a ratio analysis of the financial statements provided for the years 2009 and 2010 determined the WAMC’s financial health is rather poor. The ratios were calculated to determine the liquidity, solvency and profitability of WAMC, those ratios helped interpret WAMC’s overall financial health. Concluding from the financial statements provided for the years 2009 and 2010 that WAMC was financially weak.
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In 2010, a current ratio of .85 had been calculated, their total current assets came to $1,218,966 and their total current liabilities amounted to $1,426,558. These values were found on the statement of financial position. A good current ratio should be greater than 1, WAMC’s current ratio decreased from 2009 to 2010 which indicates that they are struggling to meet their financial obligations. The liquidity ratio measures WAMC’s ability to utilize its available resources to meet their short term commitments. If they cannot meet their short term commitments on time, WAMC will eventually become insolvent and may require reorganization or

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