Nonprofit Management All-in-One For Dummies

Chapter 10

Reporting Financial Condition on a Statement of Financial Position

IN THIS CHAPTER

Knowing what the statement of financial position reveals

Classifying assets and liabilities

Using the numbers to analyze your position

Some experts feel that out of all the financial statements, the statement of financial position is the most important. The statement of financial position provides a quantitative report of your organization’s financial health. It demonstrates responsibility and accountability. It also monitors the progress of your organization and its financial condition.

This chapter walks you through this important financial statement and shows you how to use the numbers on your statement of financial position to analyze your nonprofit’s financial health.

Grasping What the Statement Says about Your Nonprofit

The statement of financial position (also known as the balance sheet) reveals what your nonprofit owns (the assets) and what it owes (the liabilities) as of a particular date. The difference between your nonprofit’s total assets and total liabilities equals your nonprofit’s net assets:

Assets – Liabilities = Net assets

A statement of financial position reveals ...