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Analysis: Highlights of This Page

The Balance Sheet on this page shows the overall "value" of Pacifica Foundation in economic terms and how that value has changed in the past year. At the beginning of the fiscal year, Pacifica had assets of $6.9 million (line 59, Col. A) and liabilities of $1.2 million (line 66, Col. A), for a net assets balance of $5.7 million (line 73, Col. A). At the end of the fiscal year, assets had grown by $366,000 to $7.2 million (line 59, Col. B); liabilities were up $145,000 to $1.3 million (line 66, Col. B); the net assets had grown $220,000, or 4%, to $5.9 million (line 73, Col. B). This represents a very slight change.

Line 57 is of interest: It represents the value of the land, buildings and equipment owned by Pacifica. This figure, almost $5 million, represents the overwhelming majority (84%) of Pacifica's net assets. Details are given on Schedule 10.

For those who are unfamiliar, lines 67-69 indicate the status of assets on hand as follows: unrestricted assets may be spent on any legitimate Pacifica expense. For example, listener donations are typically not restricted to particular purposes. Temporarily restricted assets must be spent on specific purposes. For example, grants for particular programs or projects are restricted by the donor to funding those programs or projects, whereas general support grants might be included in unrestricted assets. Permanently restricted assets may never be spent. The most typical example is when a nonprofit has an endowment and the donor has specified that the organization can spend only the earnings on that endowment, not the principal (the original donation) itself.

Subtracting the land, buildings and equipment (line 57) and the permanently restricted assets (line 69) from the net assets (line 73) yields a bit less than $600,000 in "spendable" assets at the end of the fiscal year. Of this amount, $368,000 (line 47) was accounts receivable, i.e. money due to Pacifica but not really on hand, leaving about $232,000 on hand. With $642,000 in unpaid bills (line 60), this would need questioning; it may or may not indicate a problem (e.g., the accounts payable may include long-term debts not expected to be paid immediately; the receivables may be expected to be paid imminently).

Deferred revenue (line 62) is money that has been received during this fiscal year but is designated for use during a future period. For example, if Pacifica received a grant of $120,000 ($10,000 per month) for calendar 1996, and that grant was spent on ongoing expenses at a steady pace, at the end of the fiscal year (Sept. 30, 1996) there would be $30,000 deferred revenue from that grant, since three months remained in the calendar-year period covered by the grant. This figure is detailed in Schedule 12. Some questions I would ask before putting my signature on this page:

1. Pacifica depends heavily on members' pledges. Are unpaid pledges part of the accounts receivable on line 47? If so, shouldn't there be an allowance for doubtful accounts -- i.e., a percentage of pledges that won't be received, based on past experience?
2. Does the doubling of accounts payable (line 80) represent simply the random factor of a lot of bills having been received very close to the end of the year, before payments could be issued, or has a problem developed getting bills paid on time, or is there some other explanation? (Accounts payable reached $683,000 at the end of the following fiscal year, so there may be something going on that has caused Pacifica's accounts payable to increase; or perhaps the payables on hand at the start of this fiscal year were unusually low.) This could actually be a good thing: Pacifica may be taking longer to pay bills in order to earn more interest on its cash-on-hand, which is fine if bills are still being paid on time, or close enough to keep vendors happy.

The schedules related to this page may be found by clicking below:
Schedules #9, #10 (lines 45-46, 57b)
Schedules #11, #12, #13, #14 (lines 58, 62, 64, 54)

Pages of this Return:

1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 | 11 | 12 | 13 | 14 | 15 | 16 | 17 | 18 | 19 | 20 | 21

Pacifica Returns Online:

1995-1996 | 1996-1997

This analysis prepared by Steve Freedkin.