Part 1 – Last page of Spreadsheet
1.Read the case study description found on page 175 of your text.
2.Using the data provided in the spreadsheet above to complete your budget tab (8.5). Round all numbers to the nearest $1,000, dropping the zeros (i.e., all numbers expressed should be in thousands of dollars. $123,115 would be rounded down and entered as $123).
3.You are encouraged to seek entrepreneurial solutions in your budget.
Part 2 – Analysis and Recommendations
You will complete a narrative document that describes the current financial situation of the organization, and a written line-item justification for your budget recommendations. This should include:
1.As indicated on tab “YM 8.3 Template”, calculate all ratios relevant to this organization.
2.Describe the health of the organization financially, including discussion of ratios relative to benchmarks as appropriate.
3.An explanation of how you arrived at each line item in your budget proposal, and any assumptions you have made.
4.Any additional recommendations you may wish to make (long-term strategies, ethical considerations, proposed policies, etc.).
Submit your Excel spreadsheet and Analysis/Recommendation Word document.
Case Study description from page 175 of text below:
CASE STUDY: CREATING A BALANCED BUDGET FOR MANAGEMENT DECISION MAKING It is September 1, 2011. The executive director of the nonprofit organization Youth Movement has just resigned to accept a position with another youth-serving organization. You are the director of programs for Youth Movement and have been named interim acting executive director. In June 2011, the prior executive director did not present a FY 2011/12 (July 1, 2011–June 30, 2012) proposed bud- get for approval by the board of directors because he had recently become aware of the following financial problems for FY 2011/12:
■■ The federal grant for the HOPE program was going to be reduced by 50 percent.
■■ The corporate grant for general support (unrestricted) was going to be eliminated.
■■ The individual contribution for general support (unrestricted) was going to be eliminated.
Given these large financial problems, the board of directors told the executive director that he could take “a few months” to determine how he would propose a balanced budget with cost reductions and/or revenue increases. He never completed the task.
The board of directors has now instructed you to present a FY 2011/12 balanced budget for approval by the board no later than September 30, 2011. Using Tables 8.12 through 8.15 for reference, follow the steps outlined below to build a balanced budget proposal. The data you will need include Youth Movement’s current statement of financial position, statements of activities with comparative data, a trial balance sheet, and details of temporarily restricted net assets.