Which of the following statements is true regarding the ratio analysis of Restricted Revenues to Total Operating Revenues?

Question

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Lower percentages of restricted revenues are preferred to high percentages because restricted revenues can limit the flexibility and control of the organization over its resources. A lower percentage of restricted revenues indicates that the organization has more discretion over its resources and can use them in a way that best serves its objectives. Higher percentages of restricted revenues can indicate that the organization is heavily reliant on external funding sources or has less flexibility in its operations. Therefore, a lower percentage of restricted revenues is generally preferred. The percentage of total operating revenues is not relevant to this comparison.

Which of the Following Statements Is True Regarding the Ratio