Analysis of Financial Statement of Charity and Strategic Vision
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Added on 2022-08-12
Analysis of Financial Statement of Charity and Strategic Vision
Added on 2022-08-12
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Analysis of Financial Statement of Charity and Strategic Vision Introduction The report relates to the Musical Museum financial statement analysis. The Museum is located in London and is established for charity purpose. The Musical Museum has a subsidiary Musical Museum Trading Limited, which carries out commercial activity on behalf of the charity which is in alignment with the objective of the charitable institution of public benefit. The report presents financial statement analysis of the charity stand alone and the consolidated accounts/financials of the museum and the trading subsidiary. The report also harps on the ratio analysis of the financials along with exploration of future operating budget for the charity. Analysis The Musical Museum has experienced a tough Financial Year 2018-19 and the net income of the charitable organisation has dwindled significantly in comparison to the past financial year. The organisation has reported a loss/ deficit of Sterling 95,444 with an operating cost of Sterling 148,150. On the other hand for similar period last year, the institution has reported surplus of Sterling 57,783 with an operating cost of Sterling 137,291. Vertical Common Size Statement The Vertical common size statement of the charity stand alone has been presented here-in- below: Statement of Activities 20192018 Sl NoParticulars Musical Museum% Musical Museum% 1 Income resources from generated Funds Voluntary Income4617790.06%19262996.88% Investment Income50979.94%62103.12% 51274100.00%198839 100.00 % 2Resources Expended Charitable Activities Exhibiting Collection of Instruments140907274.81%13064165.70% Governance Costs724314.13%66503.34% 3Net Income-96876-188.94%6154830.95% 4Other gains14322.79%-3405-1.71%
20192018 Sl NoParticulars Musical Museum% Musical Museum% 5Net Movement in Funds-95444-186.15%5814329.24% On perusal of above table, it may be inferred that the charitable organisation has significant porting of revenue/income from voluntary income which comes in the form of aid, donation etc. Also, 10% of the organisation flows from passive investments which the organisation maintains. The income portion under the voluntary income has been a contributing factor to survival of charity. However, the importance of same has reduced from 96.88% to 90% which has led to downfall of charity. Also, it may be visualised that expenditure/ routine expense has been 275% of revenue in the FY 2018-19 while the same was 65.7% in the past year. The said dramatic percentage in the expense couples with downfall of revenue base led to significant erosion of the capital/fund base of the charitable organisation. Further, the Vertical common size Financial statement of the charity stand alone has been presented here-in-below: Balance sheet 20192018 ParticularsMusical MuseumMusical Museum 1Fixed Asset Tangible Asset131184081.98%133350278.64% Investment16362810.23%1621949.57% 2Current Asset Debtors347062.17%359472.12% Cash at Bank933345.83%17270910.19% 3Creditors-3250-0.20%-8650-0.51% 4Net Current Asset1247907.80%20000611.79% 5Net Asset1600258100.00%1695702100.00% 6Funds Unrestricted funds General Fund27836817.40%29252517.25% Collection Fund448452.64% Restricted Funds Heritage Lottery Funds131184081.98%134828279.51% Memorial Fund100500.63%100500.59% 1600258100.00%1695702100.00%
On perusal of the above table, it may be inferred that financial position of the charitable organisation has decreased over the period. The balance in cash has suffered a big hit of 5% as its contribution to the total asset of the organisation has decreased from 10% to 5% from FY 2017-18 to FY 2018-19. Further, the organisation has witnessed a steep fall in the net current asset for the period. Horizontal Common Size Statement The Horizontal common size statement of the charity stand alone has been presented here-in- below: 20192018 Sl NoParticulars Musical Museum Musical Museum% 1 Income resources from generated Funds Voluntary Income46177192629-76.03% Investment Income50976210-17.92% 51274198839-74.21% 2Resources Expended Charitable Activities Exhibiting Collection of Instruments1409071306417.86% Governance Costs724366508.92% 3Net Income-9687661548 - 257.40% 4Other gains1432-3405 - 142.06% 5Net Movement in Funds-9544458143 - 264.15% On perusal of the above table, it may be inferred that the financial statement of activities of the trust have taken a big hit compared to previous financial year. There has been a significant decline in aids and charity to the organisation, the fall has been recorded at 76% over the previous year. Further, the investment income has also witnessed a downfall of 18% which lead a significant downfall in the total revenue of the charitable organisation which in turn led to negative income for the current period. The organisation has also witnessed an increase in expenditure without corresponding increase in revenue which aided to negative net income for the trust. Further, the Horizontal common size Financial statement of the charity stand alone has been presented here-in-below:
20192018
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