The Program Expense Ratio for a Not-For-Profit Organization Will Improve

question 150

True/False

The program expense ratio for a not-for-profit organization will improve if the organization shifts costs from fund-raising to program expenses.

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Definitions:

Current Liability

A financial obligation that is due within one year or within the normal operating cycle of the business, whichever is longer.

Indirect Method

A cash flow statement format that starts with net income and adjusts for non-cash transactions and changes in working capital to arrive at net cash provided by operating activities.

Comparative Balance Sheet

A financial statement that compares the balance sheets of two periods, highlighting changes in assets, liabilities, and equity.

Net Income

The total profit of a company after subtracting all its expenses from its revenues.