TABLE 12-8 Lance Armstrong Foundation STATEMENTS OF FINANCIAL POSITION AS OF DECEMBER 31, 2011 AND 2010 2011 2010 ASSETS Cash and cash equivalents Investment securities Promises to give, net Accounts receivable Grants receivable Prepaid expenses and other assets Intangibles Inventory Property and equipment, net S38,349,878 $25,288,810 42,750,381 43,040,473 4,942,119 8,181,695 7,970,960 3,534,629 8,199 1,160,633 607,497 564,404 564,390 1,799,010 3,383,000 11,925,088 11,709,401 $109,548,516 $96,318,094 86,043 Total Assets LIABILITIES AND NET ASSETS LIABILITIES Accounts payable and accrued expenses Grants payable, net Deferred revenue S 2,664,092 S 2,842,779 2,605,206 2,040,951 905,301828,803 6,174,599 5,712,533 Total liabilities NET ASSETS Unrestricted 77,669,589 64,073,490 11.157,406 11,157,406 88,826.99575,230.896 4,706,791 6,984,017 9,840,131 8,390,648 103,373,917 90,605,561 $102,548,516 $96 318.094 Undesignated Designated Total unrestricted Temporarily restricted Permanently testricted lotal tnet assets Total Liabilities and Net Assets STATEMENTS OF ACTIVITIES YEARS ENDED DECEMBER 31, 2011 AND 2010 UNRESTRICTED NET ASSETS Revenues Contributions Grant revenue Program merchandise and services Program merchandise and services- $15,875,592 $14,446,807 495,761 844,856 5,318,246 7,572,548 promotional cost Special event revenues Cost of direct benefits to donors Investment (loss) income Royalties and licensing fees (2,104,955) (2,797,968) 8,987,228 11,484,627 (760,276) (1,400,738) (457,841) 3,978,161 15,790,866 12,912,076 43,144,621 47,040,369 ,444,2562,897,988 48,588,877 49.938,357 Total net revenues Net assets released from restrictions Total net revenues and net assets released from restrictions Continues) P. 12-8 with traditional financial ratios 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 expendi- tures ot d. Curr ent fiscal performance as indicated by surpluses or deficits e. Riskiness of revenue stream 2. Through the Foundation's Live Strong program, it has promoted cancer awareness by partnering with com- munity programs, the YMCA, outreach and education and other avenues. Thus the foundation's contribu- tions 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 con- cerning the legitimacy of Armstrong's Tour de France victories, what questions might you raise regarding the ability of the foundation to sustain the 2011 and 2010 ievels of revenues? What are the nsks? Note: This question was originally written before Lance's meals were nullificd) TABLE 12-8 Lance Armstrong Foundation STATEMENTS OF FINANCIAL POSITION AS OF DECEMBER 31, 2011 AND 2010 2011 2010 ASSETS Cash and cash equivalents Investment securities Promises to give, net Accounts receivable Grants receivable Prepaid expenses and other assets Intangibles Inventory Property and equipment, net S38,349,878 $25,288,810 42,750,381 43,040,473 4,942,119 8,181,695 7,970,960 3,534,629 8,199 1,160,633 607,497 564,404 564,390 1,799,010 3,383,000 11,925,088 11,709,401 $109,548,516 $96,318,094 86,043 Total Assets LIABILITIES AND NET ASSETS LIABILITIES Accounts payable and accrued expenses Grants payable, net Deferred revenue S 2,664,092 S 2,842,779 2,605,206 2,040,951 905,301828,803 6,174,599 5,712,533 Total liabilities NET ASSETS Unrestricted 77,669,589 64,073,490 11.157,406 11,157,406 88,826.99575,230.896 4,706,791 6,984,017 9,840,131 8,390,648 103,373,917 90,605,561 $102,548,516 $96 318.094 Undesignated Designated Total unrestricted Temporarily restricted Permanently testricted lotal tnet assets Total Liabilities and Net Assets STATEMENTS OF ACTIVITIES YEARS ENDED DECEMBER 31, 2011 AND 2010 UNRESTRICTED NET ASSETS Revenues Contributions Grant revenue Program merchandise and services Program merchandise and services- $15,875,592 $14,446,807 495,761 844,856 5,318,246 7,572,548 promotional cost Special event revenues Cost of direct benefits to donors Investment (loss) income Royalties and licensing fees (2,104,955) (2,797,968) 8,987,228 11,484,627 (760,276) (1,400,738) (457,841) 3,978,161 15,790,866 12,912,076 43,144,621 47,040,369 ,444,2562,897,988 48,588,877 49.938,357 Total net revenues Net assets released from restrictions Total net revenues and net assets released from restrictions Continues) P. 12-8 with traditional financial ratios 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 expendi- tures ot d. Curr ent fiscal performance as indicated by surpluses or deficits e. Riskiness of revenue stream 2. Through the Foundation's Live Strong program, it has promoted cancer awareness by partnering with com- munity programs, the YMCA, outreach and education and other avenues. Thus the foundation's contribu- tions 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 con- cerning the legitimacy of Armstrong's Tour de France victories, what questions might you raise regarding the ability of the foundation to sustain the 2011 and 2010 ievels of revenues? What are the nsks? Note: This question was originally written before Lance's meals were nullificd)