Financial Management for Public, Health, and Not-for-Profit Organizations

Chapter 14

14-10. Lafayette Film Center (LFC) is a not-for-profit theater that presents independent films. In addition to revenue from theater admissions, LFC relies on concession and caf sales, grants and other external support, theater rental sales, and proceeds from special events and other programs that not only promote appreciation for independent films, but also generate grants and contributions. LFCs new executive director has asked you, as the director of finance, to provide an analysis of the organizations financial position. Refer to Exhibits 14-7 through 14-10; these exhibits present LFCs statements of financial position, statements of activities, analysis of expenses by nature and function, and statements of cash flows for the years ended December 31, 2024 and 2023.

1. Does LFC have an endowment? How do you know?
2. How much of LFCs net assets with donor restrictions were reclassified as unrestricted in 2024? Where can this be found in the statements of financial position and statements of activities?
3. Calculate the four profitability ratios presented in the chapter for LFC for 2024 and 2023 as well as the percent change in each from 2023 to 2024. By which measure did LFCs profitability deteriorate the most, and by how much?