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TABLE 9.4Financial Statement for a Small Nonprofit OrganizationfigureThe profit margin ratio is problematic because the nonprofit had a slight deficit this year. Questions that need to be answered include: Is this loss a one-time event or has this nonprofit been in this situation before? Is this nonprofit building intergenerational equity over time? What is the trend over five or ten years?Looking at the degree of diversity in revenues, the analyst can see that this nonprofit organization depends heavily on government contracts; in contrast, contributions are quite a small proportion of the revenues. Certainly, the nonprofit would benefit from a greater emphasis on contributions.It is possible to conclude that, although the nonprofit does not have immediate concerns about liquidity and solvency, this nonprofit organization needs to stabilize its profit margin and improve its sustainability of resources through revenue diversification. More could be learned through an in-depth examination of the sources and uses of revenue.TABLE 9.5Statement of Financial Position (Balance Sheet) for a Small Nonprofit Organization Current assets      Cash     $271,671Temporary cash investments     619,941Accounts receivable     45,918Pledges receivable     183,962Prepaid expenses     168,270    Total current assets     $1,289,762       Long-term assets      Investments     $2,033,200Land, buildings     1,612,164Other assets     30,751    Total long-term assets     $3,676,115           Total assets     $4,965,877Current liabilities      Accounts payable     $200,000Accrued expenses     48,695Total current liabilities     $248,695Long-term liabilities      Mortgage     $381,458       Total liabilities     $630,153       Net assets      Unrestricted     $2,509,727Temporarily restricted     825,997Permanently restricted     1,000,000    Total net assets     $4,335,724           Total liabilities and net assets     $4,965,877 TABLE 9.6Statement of Activities (Income Statement) for a Small Nonprofit Organization Revenue         Contributions     $565,032   Grants     1,182,215   Government contracts     1,459,639   Fees and membership dues     529,243   Interest and gains     86,637      Total revenue     $3,822,766       Expenses         Salaries     $2,187,465   Benefits     475,454      Total PS     $2,662,919Chen, G., G., Forsythe, W., D., Weikart, A., L., Williams, W., D. (06/2008). Budget Tools: Financial Methods in the Public Sector, 1st Edition. [Strayer University Bookshelf]. Retrieved from https://strayer.vitalsource.com/#/books/9781483304571/