Read 14-10-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 14-7 through 14-10, 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, 2018 and 2017.

Answer questions 3 and 9.

3: Calculate the four profitability ratios presented in the chapter for LFC for 2018 and 2017 as well as the percent change in each from 2017 to 2018. By which measure did LFCs profitability deteriorate the most, and by how much?

9: Calculate the quick ratio and debt to equity ratio for LEC for 2018 and 2017 as well as the percent change in each from 2017 to 2018. Are there trends favorable or unfavorable? Are these trends favorable or unfavorable? Which presents the greater area of concern for 2018, and why?