Executive Summary
American National Red Cross is an NPO established under the Acts of U.S Congress on 5 January 1905. It is providing services to the Armed Forces, Biomedical services, disaster services, and health and safety services since its establishment. Consolidated Financial statements for the year ended 30 June 2015 were analyzed and results are presented in this report. Total current assets decreased by -0.98%, however, cash and cash equivalents increased by 1.54% which means the inflows of the organization in getting better and more liquid. There is a decrease of 22% in investments of the organizations which relates to fair value decrease because American National Red Cross has adapted a policy to record investments on Fair Value at the year-end. There is an increase in trade receivables in the current year however the provision for doubtful debts has decreased which means the economic benefits are flowing inwards smoothly.
A decrease of 0.34% is recorded in inventory; the reason for such decrease is the greater amounts of inventory obsolesce in the current year. In property, plant, and equipment there is a decrease amounting to USD 100,000 as compared to prior year this is because land and building have been held for sale in the current year. Overall current liabilities have increased by 0.050% which is not a material change in aggregate; however, the main reason for the change is due to the increase in current portion of the debt. Accounts payable and accrued expenses have decreased by and amount of USD 19,000 which means the company is paying off their liabilities and outflows are getting smooth. An immaterial change of USD 7 occurs in post-retirement benefits. Debt represented in non-current liabilities decreased by 17%. This decrease in due to the lower borrowings in the current year and decrease in obligation under the capital lease.
Total equity that means assets fewer liabilities has decreased by an amount of around USD 350,000. The major decrease relates to decreases in unrestricted net assets. Above mentioned analysis of each line item of Consolidated Statement of Financial Position, we are moving towards to Consolidated Statement of Activities; Total operating revenue and gains have been decreased and total operating expenses are also in line with the decrease in revenue and gains. However decrease in revenue mainly relates to the corporate, foundation and individual giving. Investment income has increased as compared to the prior year which is setting off the greater decrease in the revenue. The company had a non-operating loss in this year amounting to USD 55,000. By observing above-mentioned points and analyzing each line of an item separately, it can be concluded that the financial performance of the organization has decreased during the current year.
Write-up
The primary purpose of the NFPO is to provide volunteer aid to the sick and wounded armed personnel in the wartime and to provide a relief system in peacetime to mitigate the sufferings caused by the natural disasters. The mission of the organization is to provide help to the people to prevent, prepare and respond well in case of emergencies.
Investments are the largest assets of the company whereas pensions and post-retirement benefits are the largest liabilities. Revenues receivable due beyond one year are stated at NPV of the estimated cash flows using risk-adjusted rate.
- Sources of revenue are the grants and contracts from federal agencies.
- Account payable and accrued expenses are the largest expenses.
- Account payable and accrues expenses are the largest expenses.
- Total fundraising expenses are $180,934
- KPMG audited the financial statements
- To discount contribution receivables, rates varied from 0.09% to 2.58%
