One of the First Steps in Arriving at a Firm's

question 32

True/False

One of the first steps in arriving at a firm's forecasted financial statements is a review of industry-average operating ratios relative to these same ratios for the firm to determine whether changes to the ratios need to be made.

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Definitions:

Externally Restricted Fund

Funds designated for a specific purpose by an external party or donor, limiting the fund's use by the receiving organization.

NFP Organization

A not-for-profit organization (NFP) is a type of organization that does not earn profits for its owners. All the money earned by or donated to an NFP is used in pursuing the organization's objectives and keeping it operational.

Endowment Fund

A fund where the principal amount is kept intact while the investment income is used for specific purposes, often found in non-profits and educational institutions.

Principal Amount

The initial size of a loan or bond or the amount deposited, excluding any interest or earnings.