Lafayette Film Center (LFC) is a not-for-profit theater that plays 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 15-8 through 15-11, which present LFCs statements of financial position, statements of activities, statements of functional expenses, and statements of cash flows for the years ended December 31, 2014 and 2013. 1.) Does LFC have an endowment? How do you know? 2.) How much of LFCs temporarily restricted net assets were reclassified as unrestricted in 2014? 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 2014 and 2013, as well as the percent change in each from 2013 to 2014. By which measure did LFCs profitability deteriorate the most, and by how much? Exhibit 15-8 Lafayette Film Center Statements of Financial Position As of December 31, 2014 and 2013 (Listed showing 2014 first, then 2013) Assets Current Assets 2014 2013 Cash and cash equivalents $75,582 $174,662 Grants receivable 562,696 137,858 Inventory 50,400 59,508 Other receivables 36,172 37,624 Prepaid expenses 11,552 Total Current Assets $736,402 $409,652 Long-Term Assets Conditional promises to give $264,514 $ 488,530 Deposits 1,510 7,910 Property and equipment, net 9,336,672 9,278,616 Total Long-Term Assets $9,602,696 $9,775,056 Total Assets $10,339,098 $10,184,708 Liabilities and Net Assets Current Liabilities Accounts payable $108,214 $113,240 Accrued expenses 109,044 111,776 Deferred revenue 31,186 Line of credit 960,510 100,000 Current portion of capital lease obligations 51,100 48,394 Total Current Liabilities $1,260,054 $373,410 Long-Term Liabilities Capital lease obligations less current portion 36,596 88,638 Total Liabilities $1,296,650 $462,048 Net assets Unrestricted $8,777,934 $9,184,130 Temporarily Restricted 264,514 538,530 Total Net Assets $9,042,448 $9,722,660 Total Liabilities and Net Assets $10,339,098 $10,184,708 The accompanying notes are an integral part of these statements. Exhibit 15.9 Lafayette Film Center Statements of Activities For the Years Ended December 31, 2014 and 2013 Unrestricted 2014 2013 Revenue and Support Theater admissions $414,818 $78,640 Concession and caf sales 1,522,426 196,288 Memberships 139,684 61,350 Theater rental sales 68,180 58,414 Special events 47,710 140,616 Other programs 62,006 45,726 Interest and investment income 56,656 Sale of tax credits 1,384,002 Grants 1,061,762 3,016,550 Contributions 360,104 1,129,112 Total Revenue and Support $3,676,690 $6,167,354 Net assets released from restrictions 274,016 1,826,578 Total Revenue and Other Support $3,950,706 $7,993,932 Expenses Program services $3,640,634 $1,378,472 General administration 455,436 407,244 Fund-raising 260,832 302,384 Total Expenses $4,356,902 $2,088,100 Change in Net Assets $(406,196) $5,905,832 Net assetsbeginning of year 9,184,130 3,278,298 Net assetsend of year $8,777,934 $9,184,130 The accompanying notes are an integral part of these statements. Exhibit 15-11 Lafayette Film Center Statements of Cash Flow For the Years Ended December 31, 2014 and 2013 2014 2013 Operating Activities Change in net assets $(680,212) $4,129,254 Adjustments to reconcile change in net assets to net cash provided by (used in) operating activities Depreciation 624,356 107,900 Contributions restricted for building renovations 1,843,396 (Increase) decrease in operating assets Grants receivable (424,838) 292,666 Other receivables 1,452 (33,344) Conditional promises to give 224,016 (16,818) Prepaid expenses (11,552) Inventory 9,108 (59,510) Deposits 6,400 (1,510) Increase (decrease) in operating liabilities Accounts payable (5,026) (423,404) Accrued expenses (2,732) 111,776 Deferred revenue 31,186 Net cash provided by (used in) operating activities $(227,842) $ 5,950,406 Investing Activities Payments for property and equipment $(682,412) $(7,159,362) Net cash (used in) investing activities $(682,412) $(7,159,362) Financing Activities Payments on capital leases $ (49,336) $ (10,084) Net increase in line of credit 860,510 100,000 Net cash provided by financing activities $ 811,174 $ 89,916 Net increase (decrease) in cash and cash equivalents $ (99,080) $(1,119,040) Cash and cash equivalentsbeginning of year 174,662 1,293,702 Cash and cash equivalentsend of year $ 75,582 $ 174,662 The accompanying notes are an integral part of these statements. I am having issues solving for the operating margin ratio, total margin ratio, return on assets ratio, and return on equity ratio for this problem.