Executive Summary Results

Organisation: Cleckheckmondsedge Community Regeneration Forum

Name: A Hill

Date: 08/09/2010

 

Governance

Key Strengths	Areas For Development
Board development

 

Organisational Health

Key Strengths	Areas For Development
Financial forecasting	IT system
Delivery of organizational objectives	Managing IT risk
	Market awareness

 

Financial Sustainability

What does this tell me?

This graph, which is measured in thousands, picks up three key indicators of financial sustainability – growth, costs and profitability. Year 1 (representing the earliest financial data you have inputted) should be treated as a baseline. You can therefore easily see how your income had grown or reduced over this period. You can also see how your business costs have reacted to increases or decreases in income (turnover).

Efficiency & Solvency

This graph also highlights your net profit margin as a percentage. This is the amount of surplus or loss after all expenses and costs have been accounted for. The red bar identifiers a target of 10% and the graph compares your performance against this. If there is a pattern of consistently falling below this level year on year, you may need to look at your pricing model or reduce your costs to achieve sustainability.

What does this tell me?

The graph shows two measures. The first is the actual number of months for which you have sufficient funds to operate, even if you suffered a substantial drop in income. This is set against a target. A general rule of thumb is to have at least 3 months of operating costs available in order to enable you to take action.

The second measure, the collection period ratio, is counted in debtor days – the number of days from issuing an invoice to receiving payment. The target should be somewhere between 30 and 45 days. We have used a target from the middle of this range (median) of 37 days to allow you to see how your organisation compares.

What does this tell me?

This graph looks at the most important solvency measure – the current ratio (also known as the acid test!). It measures the adequacy of current assets to meets its short-term liabilities. It reflects whether the company is in a position to meet its expenditure costs as they fall due.

The higher the ratio, the more likely the company will be able to meet its liabilities. Traditionally a ratio of 2 or higher was regarded as appropriate for most businesses to maintain creditworthiness, however more recently a figure of 1.5 is regarded as the norm. We have therefore put in both figures for the purpose of comparison. If you are consistently above the upper level it may be due to high cash levels, which could be put to better use. If you are consistently below the lower level you are likely to be vulnerable to cash-flow pressures.