Information from the 2015 Form 990 and the 2016 audited financial statements for Feeding America follows. Although Form 990 indicates it is for 2015, it is actually for the period July 1, 2015, to June 30, 2016, the same time period as the 2016 audited financial statement. Use the following information to complete the exercise.
Required
a. Compute the following performance measures using the Form 990 data presented in this exercise.
- Current ratio - liquidity.
- Revenues/expenses - going concern.
- Program expenses/total expenses - program effectiveness.
- Public support/fund-raising expenses - fund-raising efficiency.
b. Using the audited financial statements provided in this exercise, calculate the same ratios listed in requirement a.
158 ACC-325 FEEDING AMERICA, 2015 FORM 990 (PARTS VIII, IX, AND X) Form 990 (2015) FEEDING AMERICA 36-3673599 Page 10 Part IX Statement of Functional Expenses Section 501(c)(3) and 501(c)(4) organizations must complete all columns. All other organizations must complete column (A). Check if Schedule O contains a response or note to any line in this Part IX. X Do not include amounts reported on lines 6b, 7b, (A) 8b, 9b, and 10b of Part Vill. Total expenses (B) expenses Management and Fundraising general expenses expenses Grants and other assistance to domestic organizations and domestic governments. See Part IV, line 21 . . 2, 336, 741, 082. 2, 336, 741, 082 Grants and other assistance to domestic individuals. See Part IV, line 22 . . . . . . . . . 10, 000. 10, 000. 3 Grants and other assistance to foreign organizations, foreign governments, and foreign individuals. See Part IV, lines 15 and 16 . . 4 Benefits paid to or for members . . 5 Compensation of current officers, directors, trustees, and key employees . 3, 339, 573 . 1, 286, 110. 1, 703, 723. 349, 740. 6 Compensation not included above, to disqualified persons (as defined under section 4958(1)(1)) and persons described in section 4958(c) (3)(B) . . 0 7 Other salaries and wages . 20, 996, 336. 13, 441, 023. 2, 269, 589. 5, 285, 724. 8 Pension plan accruals and contributions (include section 401(k) and 403(b) employer contributions) 1, 166, 650 718, 175. 145, 935 302, 540. 9 Other employee benefits 2, 419, 445. 1, 597, 411. 226, 416. 595 , 618. 10 Payroll taxes . . . 1, 764, 075. 1, 100, 980. 248, 160 . 414, 935. 11 Fees for services (non-employees) a Management b Legal . . . . 14, 270. 14, 270 c Accounting . . 153, 092. 153, 092. d Lobbying . . . 127, 641. 127 , 641 e Professional fundraising services. See Part IV, line 17. 2, 483, 495. 2, 483, 495. f Investment management fees 78 , 179 . 78 , 179. g Other. (if line 11g amount exceeds 10% of line 25, column (A) amount, list line 1 1g expenses on 10, 760, 662 6, 096, 188. 881, 425 . 2, 674 . 3, 783, 049. 12 Advertising and promotion . 3, 202, 786. 1, 736, 328 . 721, 803. 191, 491. 1, 463, 784. 13 Office expenses . . . 1, 028, 014. 114, 720. 14 Information technology . 5, 732, 424. 4, 000, 277 . 370, 365. 1, 361, 782. 15 Royalties. . 1, 501, 004. 0 . 6 Occupancy 828 , 024. 308, 752. 364, 228. 17 Travel . . . . . . . . 1, 973, 106. 1, 539, 062. 158, 189 . 275, 855 . 8 Payments of travel or entertainment expenses for any federal, state, or local public officials 19 Conferences, conventions, and meetings 1, 530, 784. 1, 356, 486. 73, 558. 100, 740. 20 Interest . . . . . . 21 Payments to affiliates . . . o . 22 Depreciation, depletion, and amortization 567, 125. 130, 797. 81 , 162 . 94 , 023 . 55, 166. 23 Insurance . . . . . . . . 53, 631 . 18 , 450. 21, 942. 24 Other expenses. Itemize expenses not covered above (List miscellaneous expenses in line 24e. If line 24e amount exceeds 10% of line 25, column (A) amount, list line 24e expenses on Schedule O.) a PRODUCE_ 18 , 435, 856. 18, 435, 856. b POSTAGE_&_PRINTING 8, 927, 957. 3, 927, 957. C DISASTER_PURCHASES__ _ 389 , 476. 389, 476 a PROFESSIONAL _DEVELOPMENT 197 , 708. 18, 282. 142, 548 36, 878. e All other expenses .. 202, 790. 61, 603. 130, 310. 10, 877 . 25 Total functional expenses. Add lines 1 through 24e 2, 423, 837, 553. 2, 390, 690,235. 7, 172, 292 . 25, 975, 026. 26 Joint costs. Complete this line only if the organization reported in column (B) joint costs from a combined educational campaign_and fundraising solicitation. Check here following SOP 98-2 (ASC 958-720) . SE1052 1.000 Form 990 (2015) Source: Internal Revenue Service 552Accounting for Governmental & Nonprofit Entities, 18th Edition 159 FEEDING AMERICA, 2015 FORM 990 (PARTS VIII, IX, AND X) FEEDING AMERICA 36-3673599 Form 990 (2015) Page 11 Part X Balance Sheet Check if Schedule O contains a response or note to any line in this Part X. .. . ... (A) Beginning of year (B) End of year Cash - non-interest-bearing 50 , 397, 174. 1 0 . 2 40, 644, 516. Savings and temporary cash investments. 0. Pledges and grants receivable, net 8, 034, 291. 3, 681, 950. 4 37, 507, 788. Accounts receivable, net . 5, 102, 161. Loans and other receivables from current and former officers, directors, rustees, key employees, and highest compensated employees. Complete Part II of Schedule L 0. 5 0 . Loans and other receivables from other disqualified persons (as defined under section 4958(f)(1)), persons described in section 4958(c)(3)(B), and contributing employers and sponsoring organizations of section 501(c)(9) voluntary employees' beneficiary Assets organizations (see instructions). Complete Part II of Schedule L. 0. 6 0 . Notes and loans receivable, net . 0. 7 0 . Inventories for sale or use . . 24, 600. 8 457, 548. 9 29, 808 . Prepaid expenses and deferred charges 175, 630. 10 a Land, buildings, and equipment: cost or other basis. Complete Part VI of Schedule D 10a 7,213, 502. b Less: accumulated depreciation. . . . . . . . . . 10b 3,763, 148. 2, 092, 891. 10c 3, 450, 354. 11 investments - publicly traded securities . . . . . . . . . 23, 656, 392. 11 23, 761, 847. 12 Investments - other securities. See Part IV, line 11 . 31, 374. 12 13 Investments - program-related. See Part IV, line 11 560, 289. 13 35, 332 . 797, 657 . 14 Intangible assets . . . 0. 14 0. 15 16 Other assets. See Part IV, line 11 . 89, 310. 15 Total assets. Add lines 1 through 15 (must equal 109, 025, 819. 16 23 , 218 . 17 111, 828, 311. Accounts payable and accrued expenses. 9 , 132, 944. 17 18 Grants payable . 13, 284, 602. 18 8, 440, 106. 19 Deferred revenue . 1, 798, 886. 19 4, 215, 703. 20 0. 20 1, 016, 191. 0 . 21 Tax-exempt bond liabilities Escrow or custodial account liability. Complete Part IV of Schedule D Loans and other payables to current and former officers, directors, D . . . . 519, 811. 21 519, 461. Liabilities trustees, key employees, highest compensated employees, and disqualified persons. Complete Part II of Schedule L . . . . . . . . . . . .. 0. 22 23 . 23 24 Secured mortgages and notes payable to unrelated third parties 0. 25 Unsecured notes and loans payable to unrelated third parties. . 0 . 24 0 . Other liabilities (including federal income tax, payables to related third parties, and other liabilities not included on lines 17-24). Complete Part X of Schedule D 26 . . . . . 2, 143, 126. 25 1, 870, 185. Total liabilities. Add lines 17 through 25. . . . . . . . . . . . 26, 879, 369. 26 16, 061, 646. Net Assets or Fund Balances Organizations that follow SFAS 117 (ASC 958), check here > [X and complete lines 27 through 29, and lines 33 and 34. Unrestricted net assets. 28 28, 015, 697. 27 29 Temporarily restricted net assets 52, 318, 603. 28 31, 794, 369. 1, 812, 150. 29 62, 139, 146. Permanently restricted net assets . . .. . . . . . . . . . . . . . . . . 1, 833, 150. Organizations that do not follow SFAS 117 (ASC 958), check here _ _ and complete lines 30 through 34. Capital stock or trust principal, or current funds . . Paid-in or capital surplus, or land, building, or equipment fund . 30 31 Retained earnings, endowment, accumulated income, or other funds 32 Total net assets or fund balances . . . . . 82, 146, 450. 33 Total liabilities and net assets/fund balances. . 109, 025, 819. 34 95, 766, 665. 111, 828, 311. Form 990 (2015) Source: Internal Revenue Service 553ACC-SZS 554 Part Three Accounting and Financial Reporting for Not-for-meit Organizations and the Federal Government FEEDlNG AMERlCA . Statements of Financial Position \\ June 30, 2016 and 2015 (In thousands) 2016 2015 Msets Current assetsi Cash 35 40.645 50,398 Shortterm investments 3,458 3,446 Contributions receivable. net 25,036 23,122 Accounts receivable. net 5,1 02 3,467 Notes receivable. net 160 289 Other assets 505 482 Total current assets 75,916 81,204 Longterm investments 20.329 20,242 Contributions receivable. net 1 1,472 4,912 Notes receivable, net 638 485 Other assets 23 89 ' Furniture and equipment, net of accumulated depreciation of $3,766 and $3.199 in 2016 and 2015, respectively 3.456 2:093 Total assets $1 1 1:828 1 09,025 Liabilities and Net Assets Current liabilities: Accounts payable and accrued expenses 3; 12.161 22.400 Deferred revenue 1 ,016 1,799 Other obligations 77 75 Current portion of leases payable 296 243 Total current liabilities 13.550 24.51 7 Leases payable, less Current portion 1.53? 1,859 Other obligations 975 503 Total liabilities 1 6,062 26,879 Net assets: Unrestricted 31,794 28.01 2 Temporarily restricted 62,1 39 52,32 1 Permanently restricted 1.833 1.81 3 Total net assets 95,766 82,146 Total liabilities and net assets 1 1 1E828 109,025 .\"l FEEDING AMERICA Statements of Activities Years ended June 30, 2016 and 2015 (in thousands) 2016 2015 Temporarily Permanently Temporarily Permanently Unrestricted restricted restricted Total Unrestricted restricted restricted Total Operating activities: Public support and revenue Public support: Individual contributions 34,291 2,839 37,130 37,203 1,890 39,093 rate contributions 17,399 29,412 46,811 17,911 19,446 37,357 Foundations 397 219 616 1,717 4,978 6,695 porate promotions 23,360 11,849 44,319 35,209 17.197 9.807 27,004 Total fundraising 75,447 119,766 74,028 36,121 110,149 Donated goods and services 2,288,551 2,288,551 2,065,718 2,065,718 Total public support 2 ,363,998 44,319 2,408,317 2,139,746 36,121 2,175,867 Revenue: Member fees 4,291 4,291 4,374 4,374 Conference fees 1,278 1,278 1,153 2,174 11111 1,153 Other revenue 2,174 1,391 1,391 Food procurement revenue 62,762 62,762 59,976 11 1 59,976 Investment income 16 16 11 11 Net assets released from restriction 35,268 (35,268) 22,198 (22,198) Total public support and revenue 2,469,787 9,051 2,478,838 2.228,849 13,923 2,242,772 Expenses: Program services: Member services 54,751 Food procurement 2,365,556 54,751 44,418 44,418 2,365,556 2,139,803 2,139,803 Public awareness and education 5,41' 5,411 4,682 4,682 Policy and advocacy 1,893 1,893 1,927 1,927 Programs 2,609 2,609 2,320 2,32 Research and analysis 4,391 1 1III1 4,391 3,457 11111 3,457 Total program services 2,434,611 2,434,611 2,196,607 2,196,607 Supporting services: Management and general 7,213 7,213 7,076 7,076 Fund development 26,031 26,031 25,050 Total supporting services 33,244 32,126 '141 25,050 33,244 32,126 Total expenses 2,467,855 Increase in net assets as a result of 2,467,855 2,228,733 2,228,733 operations 1,932 9,051 - 10,983 116 13,923 Nonoperating activities 1 14,039 Wills and bequests 1,964 2,719 1,366 1,366 Individual contributions 20 15 Investment return 61 (7) (10) Other (175) (175) 111) 19 (111) Accounting for Governmental & Nonprofit Entities, 18th Edition Loss on disposition of furniture and equipment Changes in net assets 3,782 9,818 20 13,620 1,355 13,920 15 (9) 15,290 555 Net assets at beginning of year 28,012 52,321 82,146 38,401 66,856 Net assets at end of year $ 31,794 1,813 26,657 1,798 62,139 1,833 95,766 28,012 52,321 1 ,813 82.146 161Accounting for Governmental & Nonprofit Entities, 18th Edition 157 FEEDING AMERICA, 2015 FORM 990 (PARTS VIII, IX, AND X) Form 990 (2015) FEEDING AMERICA 36-3673599 Page 9 Part VIII Statement of Revenue Check if Schedule O contains a response or note to any line in this Part Vill . . . . . . ..... X Total revenue (B) Related or (C) (D) exempt function business Revenue revenue revenue excluded from tax under sections 512-514 Contributions, Gifts, Grants Program Service Revenue and Other Similar Amounts 1a Federated campaigns . . . . 1a Membership dues . 1b Fundraising events . . 1c Related organizations . . 1d Government grants (contributions) . . fe er contributions, gifts, grants. and similar a not included above . if | 2. 375, 635, 807. Noncash contributions included in lines 1a-1f. $ 2,288 , 846, 654. h Total. Add lines 1a-1f . . . 2,375, 635, 807. Business Code 2a REMENT REVENUE 900099 18, 500, 609. 18, 500, 609. MEMBER FEES 900099 4, 290, 824. 4.290,824. CONFERENCE REVENUE 900099 1, 278, 147. 1, 278,147. INTEREST INCOME 900099 1, 022. 1,022. All other program service revenue . Total. Add lines 2a-21 . 3 .. . 24,070, 602. Investment i income (including dividends, interest, and other similar amounts). . . 511, 301. 511, 301. income from investment of tax-exempt bond proceeds Royalties . . . . . . . . . . . . . . . . . . . . . . . . 35, 209, 467. 35, 209,467. () Real (ij) Personal 6a 157, 754. b Less: rental expenses . . 204, 255. c Rental income or (loss) 46, 501. d Net rental income or (loss) . .. .. 46, 501 - -46, 501. Gross amount from sales of (i) Securities (ii) Other assets other than inventory 134,343. b Less: cost or other basis and sales expenses 318,579. C Gain or (loss) . . . . -184, 236. Net gain or (loss) . . . . . . -184, 236. 184, 236. Other Revenue Ba Gross income from fundraising events (not including $ of contributions reported on line 1c). See Part IV, line 18 . . . . . . . . . b c Less: direct expenses . . . . . . . . . . Net income or (loss) from fundraising events. . a Gross income from gamit activities. See Part IV, line 19 . . . . . . . . . . . a b Less: direct expenses . . . . . . . . . . b Net income or (loss) from gaming activities . ... 10a Gross sales of inventory, less returns and allowances . . . . . . . . . a 44,261, 941. b Less: cost of goods sold . . . . . . . . . 43, 720,747. C Net income or (loss) from sales of inventory. 541, 194- 541,194. Miscellaneous Revenue Business Code 1a PUBLICATIONS AND MATERIALS FEE 900099 355, 097. 355, 097. b OTHER FEES 900099 1 525, 805. 1, 525, 805. All other revenue . . . . . . Total. Add lines 11a-11d . . 1, 880, 902. 12 Total revenue. See instructions. 2.437, 618,536. 26, 492, 698. 35,490.031. SE 1051 1.000 Form 990 (2015) Source: Internal Revenue Service 551
