Achievement First Case Study

Achievement First (AF) is a charter network that began its work at a single charter middle school in New Haven, CT in 1998. In 2003, the founders created a 501(c) non-profit: Achievement First with the intention of having a broader impact on learning that just one middle school intended to serve students in grades 5-8: Amistad Academy. Over the next twenty years the network grew to encompass 34 schools in three states and serve over 11,000 students. The intention of the AF non-profit is to develop and implement programs that are on par with public school district spending in the towns where they are located as stated in their yearly reports. The financial records for Achievement First were located through the use of a GuideStar database search (GuideStar, 2017).

Income Sources and Expenditures
The major sources of revenue for the organization include contributions (which includes membership fees), government grants, program services, investments, special events, sales and other and these total $45,619,513.

Management fees are those allocated to Amistad Academy from AF and are considered less that what public school district central offices receive from overall budgets (AF, 2017). Contributions account for 51% of the revenue received by the school. 48% of the income comes from program services, .41% from investments and .32% from other sources. There are no amounts attributed to government grants, special events or sales (GuideStar, 2017).

The costs are identified as core expenses includes program services, administration, and a category designated as other. The total for the 2016-2017 fiscal year was $42,867,233 with program services accounting for 91.3% of the total, 6.3% for administration and 2.4% to other expenses. Amistad reported a $2,752,280 surplus (GuideStar, 2017).

Current State of

Finances
At the end of the 2016-17 fiscal year, AF reports $581,425 in cash and equivalent, and no dollars in short term investments or securities. This amount represents a $201,057 change form the start of the year. Further, the company reports total assets in the amount of $15,306,883 as this total also includes pledges, grants, other receivable sources and fixed assets; and a total change of $465,801 less from the start of the year (GuideStar, 2017).
Current liabilities total $8,060,112; 18.6% of which is accounts payable, 1.83% is deferred revenue, 68% is attributed to loans and notes, and 12% to other (GuideStar, 2017). The company does have enough cash to pay off short-term liabilities. There is a $7,246,771 fund balance once assets are applied to these liabilities. This is the company’s working capital or equity. The current ratio is 1.9 which means that it has enough assets to cover it’s liabilities 1.9 times. Were someone to invest in this company it would be a sound investment. The debt-to-equity ratio is 1.1. This ratio is used to measure a company’s financial leverage. While this low debt to equity ratio may mean that the company is not taking advantage it’s increased profits, it is able to generate enough to cover the expenses of its obligations.
Conclusion
It is interesting to analyze the functioning of this school through the lens of annual income statements. So much of the analysis of this program is often based on student performance, impact on the community and effect on students. When evaluating the finances, it is learned that Achievement First is ending its fiscal year with a surplus. Often AF is observed in the news advocating for more funds from the state, as it doesn’t receive what the public schools do per pupil (Greenspan, 2017). However, in comparing this school to one in the host district, one would notice that the public schools end their year in debt as high as $10,000,000, with current ratios demonstrating their inability to sustain their needs.