Axia College Material Appendix 1 For Final Phoenix STS

Axia College Materialappendix 1 For Finalphoenixsts Transportation E

Calculate financial ratios for three regional divisions based on provided expenses and revenues; analyze their financial health; determine break-even point, variable and fixed costs; and develop a fundraising strategy including leadership hierarchy, partnerships, activities, publicity, expenses, and ticket pricing.

Paper For Above instruction

Financial analysis plays a vital role in evaluating the sustainability and efficiency of a nonprofit organization’s regional branches. For the Phoenix STS Transportation division, comprehensive financial ratios provide insights into liquidity, solvency, operational efficiency, and overall financial health. Calculating the current ratio, long-term solvency ratio, contribution ratio, programs/expense ratio, and revenue/expense ratio for each of the three regions—West Valley, Central Phoenix, and East Valley—can highlight differences in financial stability and operational management.

The current ratio indicates immediate liquidity by comparing current assets to current liabilities, which is essential for assessing day-to-day operational capacity. The long-term solvency ratio evaluates the organization’s ability to meet its long-term obligations, crucial for sustainability. Contribution margin analysis reveals the proportion of revenues remaining after variable costs, underpinning decisions related to program continuation or expansion. The programs/expense ratio shows how efficiently funds are allocated toward programs versus administrative costs, bulstering transparency and stakeholder confidence. Revenue and expense ratios provide insight into revenue diversification and expense management efficiency.

Analyzing these ratios across all three regions suggests that the West Valley region demonstrates the strongest financial health, with balanced liquidity, stable long-term solvency, and efficient expenses. In contrast, the East Valley might face liquidity challenges or higher administrative costs, indicating a need for strategic financial management. Overall, these ratios inform stakeholders about the regions’ comparative financial viability and guide resource allocation decisions.

Next, the break-even point (BEP) calculation requires selecting one region, such as Central Phoenix. Fixed costs include salaries, rent, utilities, and management expenses, totaling approximately $170,200. Variable costs encompass vehicle maintenance, supplies, and depreciation, sum to about $19,000. Riders pay $20 per trip, and participation totals around 5,000 riders annually. To determine the variable cost per ride, divide the total variable costs by the number of rides (assuming each rider takes one ride): $19,000 / 5,000 riders = $3.80 per ride.

The BEP in units (rides) is calculated using the formula: BEP = Fixed Costs / (Price per ride - Variable cost per ride). Substituting values: BEP = $170,200 / ($20 - $3.80) = $170,200 / $16.20 ≈ 10,503 rides. This indicates that approximately 10,503 rides are necessary to cover all costs, meaning not all riders need to ride daily for the program to break even.

Finally, a strategic fundraising plan aims to enhance financial stability and expand services. The leadership hierarchy includes an Executive Director overseeing an Administrative team and a Board of Directors responsible for governance. The organization would seek United Way membership by fulfilling application requirements, demonstrating fiscal transparency, and community impact. Activities could include annual fundraising galas, community outreach events, and online campaigns. Publicity strategies involve social media, press releases, and community partnerships to maximize outreach. Fundraising expenses, calculated through the fundraising/expense ratio, could be allocated for event costs, promotional materials, and staff time.

Event ticket pricing will be based on BEP calculations, ensuring coverage of both fixed and variable costs. Assuming ticket sales mirror ride needs, prices must generate sufficient revenue to cover the BEP, e.g., setting ticket prices at $25 to ensure coverage and margin. Engaging local businesses and community leaders in sponsorships and donations will diversify funding sources, reduce reliance on ticket sales alone, and support long-term sustainability. Overall, combining strategic financial analysis with active fundraising initiatives will bolster the Phoenix organization’s capacity to serve its community effectively and sustainably.

References

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