A good measure of whether a not-for-profit organization is a "going concern" and can sustain its operations into the future is:
A) Total revenues divided by assets.
B) Percentage of unrestricted net assets to operating expenses.
C) Percentage of program expenses to total expenses.
D) Fund-raising expenses as a percentage of public support.

Question

Quizplus · Accepted Answer

The percentage of unrestricted net assets to operating expenses is a good measure of whether a not-for-profit organization is a "going concern" because it shows the organization's ability to cover its operating expenses with its unrestricted net assets. A higher ratio indicates a stronger financial position and the ability to sustain operations into the future. A ratio of at least 6-12 months of operating expenses is considered healthy. The other options may provide some information about the organization's financial health, but they do not necessarily indicate its ability to sustain operations into the future.

A Good Measure of Whether a Not-For-Profit Organization Is a "Going