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Business Ratios


Evaluation of International Organizations (Part #6)


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Non-profit organizations may have departments or programs which produce publications for sale at a profit. Such departments can be assessed using many of the financial ratios in use in business. Fund management can be evaluated using:

  • Debtors x 365/Sales
  • Inventory x 100/Sales -
  • Creditors x 365/Cost of Sales

Profitability related to sales can be evaluated using:

  • Gross profit x 100/Sales
  • Net profit x 100/Sales
  • Cost of sales x 100/Sales

Other business ratios can be used to evaluate the organization as a whole, e.g.

  • Current assets/current liabilities.