Financial Analysis of Habitat for Humanity International

This is a short paper that uses the annual reports and form 990 for the past three years for Habitat for Humanity International (HFHI) in order illustrate and explain their financial information: two pie charts from last year annual report represent HFHI’s expenses and revenue and their relationship, does HFHI last reports satisfy FASB’s SFAS 117 (why or why not) and three years financial ratios (liquidity – current ration, capital – cash flow to total debt and profitability – total margin) to evaluate and analyze the changes in HFHI in the past three years. The following pie charts illustrate the revenue and expenses for HFHI in 2016 (highlight each pie section to get actual dollar amounts) (Habitat for Humanity International, 2017). As

Miller, 2009). There are four statements required by the FASB 117: Statement of Activities (Income Statement or a profit and loss statement), Statement of Financial Position (Balance Sheet), Statement of Functional Expenses (only for welfare and voluntary health organizations) and Statement of Cash Flows (for accrual basis entities) (Shawn H. Miller, 2009). I believe that HFHI is in compliance with FASB SFAS 117 for they have three of the four (HFHI is not required to provide a Statement of Cash Flows). Our text by McLaughlin points out that compliance is not just sending in the necessary paperwork but also that the paperwork is in enough detail. Specifically, if a paid employee works on more than one program than that employee’s wages must be broken down between both programs and not just allocated to one program (McLaughlin, 2016, p.

HFHI is in compliance with FASB’s SFAS 117 but might want to work on detailing what program(s) different employees are working on to properly allocate the expense of the employee. Lastly, based upon the liquidity, capital and profitability ratios, 2015 was not a good year but 2016 was an excellent year.

References

Habitat for Humanity International. (2017). Annual Reports and 990 Forms. Retrieved from Habitat for Humanity International.

McLaughlin, T. A. (2016). Financial Basics for Nonprofit Managers. Hoboken: John Wily & Sons.

Shawn H. Miller, C. (2009, May 17). Nonprofit Accounting Basics. Retrieved from GWSCPA: