Review the financial statements of the Lance Armstrong Foundation for 2011 as presented in Table 128.

1. Comment as best you can (even in the absence of guidelines as to what constitutes norms for comparable foundations) on the fiscal strength of the foundation as of December 31, 2011 with respect to:

a. Liquidity

b. Burden of debt relative to assets

c. Adequacy of available resources to meet expenditures

d. Current fiscal performance as indicated by surpluses or deficits

e. Riskiness of revenue stream

2. Through the Foundations Live Strong program, it has promoted cancer awareness by partnering with community programs, the YMCA, outreach and education and other avenues. Thus the foundations contributions and sales of merchandise (program merchandise and services) has increased dramatically in recent years. The merchandise sold included the ubiquitous yellow Live Strong bracelets intended to promote cancer awareness. In light of recent controversies concerning the legitimacy of Armstrongs Tour de France victories, what questions might you raise regarding the ability of the foundation to sustain the 2011 and 2010 levels of revenues? What are the risks? (Note: This question was originally written before Lances medals were nullified.)

TABLE 12-8 Lance Armstrong Foundation (Continued) Year Ended December 31, 2011 2010 CASH FLOWS FROM INVESTING ACTIVITIES Purchase of property and equipment Proceeds from sale of investments Purchase of investments S(773,055) S(1,857,148) 76,680 1,871,04 (2,868,051) 3,651,511) 84,733 2,179,729 Net cash used in investing activities CASH FLOWS FROMFINANCING ACTIVITIES 1,193,867 97,585610,518 $ 1449,483 1,804,385 12,357,526 12,931,284 $ 38,349,878 25,288,810 Contributions restricted for long-term investment Investment income, net 1,351,898 Net cash provided by financing activities Net Change in Cash and Cash Equivalents 13,061,068 25,288,810 Cash and Cash Equivalents-beginning of year Cash and Cash Equivalents-end of year SUPPLEMENTAL CASH DISCLOSURES Supplemental schedule of noncash investing activities Acquisition of property and equipment wi accounts payable $31,750 S 124,437 TABLE 12-8 Lance Armstrong Foundation (Continued) Year Ended December 31, 2011 2010 CASH FLOWS FROM INVESTING ACTIVITIES Purchase of property and equipment Proceeds from sale of investments Purchase of investments S(773,055) S(1,857,148) 76,680 1,871,04 (2,868,051) 3,651,511) 84,733 2,179,729 Net cash used in investing activities CASH FLOWS FROMFINANCING ACTIVITIES 1,193,867 97,585610,518 $ 1449,483 1,804,385 12,357,526 12,931,284 $ 38,349,878 25,288,810 Contributions restricted for long-term investment Investment income, net 1,351,898 Net cash provided by financing activities Net Change in Cash and Cash Equivalents 13,061,068 25,288,810 Cash and Cash Equivalents-beginning of year Cash and Cash Equivalents-end of year SUPPLEMENTAL CASH DISCLOSURES Supplemental schedule of noncash investing activities Acquisition of property and equipment wi accounts payable $31,750 S 124,437