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Course Details

Financial Essentials for Nonprofit Managers (Course Id 24)

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Author : Jae K. Shim, Ph.D., CPA
Status : Production
CPE Credits : 12.0
IRS Credits : 0
Price : $107.95
Passing Score : 70%
Primary Subject-Field Of Study:

Accounting - Accounting and Auditing for Course Id 24

Description :

Managers of nonprofit organizations (NPOs) generally are not skilled in financial matters. Or, managers are often preoccupied with its welfare objectives and fund raising and ignore the operations efficiency and operating cost controls. A series of appropriate questions that nonprofit financial managers must address in connection with an organizations financial condition and activity include: 1. Do we have a profit or a loss? 2. Do we have sufficient reserves? 3. Are we liquid? 4. Do we have strong internal controls? 5. Are we operating efficiently? 6. Are we meeting our budget? 7. Are our programs valid? 8. Are we competing successfully? 9. Is our prioritizing of programs and activities reasonable? The course is an attempt to help answer theses questions.

Usage Rank : 0
Release : 2012
Version : 1.0
Prerequisites : Basic math
Basic statistics
Basic accounting
Experience Level : Overview
Additional Contents : Complete, no additional material needed.
Additional Links :
Advance Preparation : None.
Delivery Method : Self-Study
Intended Participants : Anyone needing Continuing Professional Education (CPE).
Revision Date : 27-Sep-2012
NASBA Course Declaration : Participants must complete the final examination within one year of purchase and with a minimum passing grade of 70% or better to receive CPE credit unless otherwise noted on the Course History page (i.e. California Ethics must score 90% or better). After logging in click on the Course History links on your My Courses page for the Begin date and Expire date for the Final Exam.
Approved Audience :

NASBA Registry - 24

Keywords : Accounting, Financial, Essentials, Nonprofit, Managers, cpe, cpa, online course
Learning Objectives :

Chapter 1
WHAT EVERY NONPROFIT MANAGER SHOULD KNOW ABOUT ACCOUNTING AND FINANCE

After studying this chapter you will be able to:
    1. List and describe the characteristics of nonprofit organizations.
    2. Define the goals of financial management in nonprofit organization.
    3. Clarify and classify the characteristics of for-profit and non-profit.
    4. Explain the role of investors and contributors.
    5. Compare and evaluate assets and liabilities/revenues and expenses.
    6. State the need for more sound information systems.
    7. Give examples of cost concepts.
    8. Perform break-even and cost volume revenue analysis.

Chapter 2
ACCOUNTING BASICS FOR NONPROFITS

After studying this chapter you will be able to:
    1. Construct a guide for chart of accounts.
    2. Develop a statement of financial position (balance sheet).
    3. Differentiate between accrual vs. cash basis.
    4. Explain the concept of a statement of activities.
    5. Explain and describe the current unrestricted fund (general fund, operating fund).
    6. Elaborate on the processes of budget recording and accountability.
    7. Outline the goal of GASB 34.
    8. Discuss and give examples of accounting by specific nonprofit organizations.

Chapter 3
COST-VOLUME-REVENUE ANALYSIS: ARE WE BREAKING EVEN?

After studying this chapter you will be able to:
    1. Outline the concepts answered by Cost-Volume-Revenue (CVR) analysis.
    2. Differentiate among the types of fixed costs programs and specific or common programs.
    3. Discuss CVR analysis with variable revenue only.
    4. Demonstrate and explain break even analysis.
    5. Develop a graphical approach and a spreadsheet format.
    6. Implement a program for mix analysis.
    7. Identify the available management options.

Chapter 4
FINANCIAL ANALYSIS AND METRICS: AVOIDING BANKRUPTCY

After studying this chapter you will be able to:
    1. Explain and give examples of trend analysis.
    2. Conduct an analysis of the balance sheet.
    3. Prepare an appraisal for solvency, capital structure, and net assets (fund balance).
    4. Evaluate the statement of activities.
    5. Spot potential bankruptcy conditions and avoid financial problems.

Chapter 5
FORECASTING: REVENUES, COSTS, AND CASH FLOWS

After studying this chapter you will be able to:
    1. Give examples of and explain forecasting methodology.
    2. Summarize the common features and assumptions inherent in forecasting.
    3. List the steps in the forecasting process.
    4. Differentiate between moving averages and smoothing method.
    5. List and give examples of the various models used for regression analysis.
    6. Prepare a check list and evaluation for forecasts.
    7. Define the terms associated with: MAD, MSE, RMSE, and MAPE.

Chapter 6
THE BUDGETING PROCESS: DEVICE FOR PLANNING AND CONTROL

After studying this chapter you will be able to:
    1. Illustrate the processes used in strategic planning.
    2. Explain and discuss awhat-if analysis.
    3. Define contingency planning.
    4. List and explain the various types of budgets.
    5. Differentiate between cash basis vs. accrual basis budgets.
    6. Develop an operating budget.
    7. Conduct a budget appraisal.
    8. Prepare a variance determination and analysis.
    9. Initiate a system for budgetary control.
    10. Develop a budget for specific NPOs such as hospitals, libraries and social services.

Chapter 7
ZERO BASE BUDGETING AND PROGRAM BUDGETING

After studying this chapter you will be able to:
    1. Develop and explain Zero Base Budgeting (ZBB).
    2. Describe ZBB procedures.
    3. Outline the characteristics of program budgeting.
    4. Explain the time considerations and financial aspects of program budgeting process.

Chapter 8
COST BEHAVIOR, COST CONTROL, AND FLEXIBLE BUDGETING

After studying this chapter you will be able to:
    1. State how costs behave.
    2. Explain the high low method.
    3. Demonstrate regression analysis.
    4. Describe how flexible budgeting is used for cost control.
    5. Explain the relationship between standard costs and variance analysis.

Chapter 9
ENHANCING MANAGERIAL AND DEPARTMENTAL PERFORMANCE

After studying this chapter you will be able to:
    1. Discuss the long and short of responsibility accounting.
    2. Classify and explain each of responsibility centers.
    3. Distinguish between mission centers and service centers.
    4. Identify the private sector measures .
    5. Develop segmental reporting for mission centers.
    6. List performance measures and metrics for managerial control.

Chapter 10
OBTAINING FUNDS: SHORT-TERM AND LONG-TERM FINANCING

After studying this chapter you will be able to:
    1. Locate sources for potential seed capital.
    2. Conduct a fund raising program.
    3. Prepare bids for grants and contracts.
    4. Outline the concepts associated with royalties and licenses.
    5. Differentiate between government loans and bank loans.
    6. Distinguish between intermediate-term loans and long-term loans.
    7. Utilize bridge financing, equipment financing and construction financing.
    8. Differentiate between long-term debts: mortgages and bonds payable.
    9. Perform a risk analysis.
    10. Discuss the cost of financing and the timing of financing.

Chapter 11
MANAGING WORKING CAPITAL AND INVESTING SURPLUS FUNDS

After studying this chapter you will be able to:
    1. Use working capital management effectively.
    2. Utilize a system for cash management.
    3. Give examples of and explain the various cash models available.
    4. State how to taking advantage of a cash discount.
    5. Develop banking relationships.
    6. Facilitate the management of pledges and other receivables.
    7. Prepare an inventory management process.
    8. Develop strategies for investing surplus funds and investment strategies.
    9. Detail the uses of other money-market (short-term fixed income) securities.
    10. Compute the yield on securities.
    11. Evaluate money market funds.
    12. Explain the caveat about derivatives.

Chapter 12
COST MANAGEMENT AND PRICING DECISIONS

After studying this chapter you will be able to:
    1. Conduct a cost analysis for pricing.
    2. Implement a cost finding and pricing strategy.
    3. Prepare an allocation of service center costs to mission centers.
    4. Develop a procedure for service center cost-allocation.
    5. Differentiate among: direct method, step-down (two-stage) method, and reciprocal method.
    6. Explain the organizational considerations of cost control.
    7. Outline the procedure for activity-based costing (ABC).
    8. Explain the value and use of ABC.

Chapter 13
ANALYSIS FOR SHORT-TERM AND CAPITAL EXPENDITURE DECISIONS AND FINANCIAL MODELING

After studying this chapter you will be able to:
    1. Evaluate a make or buy decision.
    2. Evaluate a proposal to discontinue a program.
    3. Prepare and discuss capital budgeting.
    4. Identify a variety of types of investment projects.
    5. Describe the features of various investment projects.
    6. Describe the concept of time value of money.
    7. Calculate future values and explain how money grows.
    8. Compute the present value.
    9. Discuss the present value of mixed streams of cash flows.
    10. Discuss how to use financial calculators and spreadsheet programs for capital expenditure analysis.
    11. Select the best mix of projects with a limited budget.
    12. Explain how to determine the cost of capital used as the discount rate.
    13. Determine the benefits of lease versus purchase.
    14. Implement program analysis through financial modeling.
Course Contents :

1. What Every Nonprofit Manager Should Know About Accounting and Finance

            . Characteristics of Nonprofit Organizations

                        . How Do Nonprofits Differ from For-profits?  

                        . Goals of Financial Management in Nonprofit Organizations

                        . What Is Finance?

                        . Role of the Financial Manager

                        .Financing for Nonprofits   

            . More on For-Profit And Non-Profit Characteristics

                        . Investors and Contributors

                        . Assets and Liabilities/Revenues and Expenses            

                        . Restricted and Unrestricted Funds

                        . Operations Control and Motivating Managers

                        . Budgetary System and Accounts

                        . More Need for Sound Information Systems

            . Cost Concepts And Terminology

                        . Cost Classifications

                        . Costs by Managerial Functions

                        . Direct Costs and Indirect Costs

                        . Variable Costs, Fixed Costs, and Mixed Costs

                        . Costs for Planning, Control, and Decision Making

                        . More on Fixed and Variable Costs

            . Break-Even and Cost‑Volume‑Revenue Analysis

 

           

2. Accounting Basics for Nonprofits

            . Chart of Accounts

            . Statement of Financial Position (Balance Sheet)

                        . Assets

                        . Liabilities

                        . Net Assets

            . Accrual Vs. Cash Basis

            . Statement of Activities

                        . Revenue

                        . Expenses

            . Statement of Cash Flows

            . Disclosures

            . Supplementary Statements

            . Restricted Resources

            . Grants

            . Contributions

            . Pledges

            . Bargain Purchases of Goods and Services

            . Bequests

            . Fund Accounting

                        . Current Unrestricted Fund (General Fund, Operating Fund)

                        . Current Restricted Fund

                        . Fixed Asset (Plant) Fund

                        . Reclassifications (Transfers)

            . Encumbrances

            . Budget Recording and Accountability

            . Auditing

            . Internal Controls

            . GASB 34

            . Accounting by Specific Nonprofit Organizations

                        . Voluntary Health and Welfare

                        . College or University

                        . Library

                        . Religious Institution

                        . Performing Arts

                        . Community Service

                        . Professional Society or Association

                        . Fraternity

                        . Private Foundation

                        . Museum

                        . Research and Scientific

 

3. Cost-Volume-Revenue Analysis: Are We Breaking Even?

            . Questions Answered by CVR Analysis

                        . Analysis of Revenues

                        . Analysis of Cost Behavior

                        . Variable Costs

                        . Fixed Costs

                       . Types of Fixed Costs ‑ Program-Specific or Common

            . CVR Analysis with Variable Revenue Only

            . Break‑Even Analysis

                        . Graphical Approach in A Spreadsheet Format

                        . Determination of Target Surplus Volume

                        . Margin of Safety

                      . Some Applications of CVR Analysis and What‑If Analysis

                        . CVR Analysis with Variable and Fixed Revenues

                        . Use of Spreadsheet Software

            . Program Mix Analysis

            . Management Options

 

4. Financial Analysis and Metrics: Avoiding Bankruptcy

            . Trend Analysis

            . Analysis of the Balance Sheet

                        . Liquidity Analysis

                        . Financial Flexibility

                        . Asset Utilization

                        . Analysis of Fixed Assets

                        . Analysis of Liabilities

                        . Appraisal of Solvency, Capital Structure, and Net Assets/Fund Balance

            . Evaluation of the Statement of Activities

                        . Revenue

                        . Costs

                        . Profitability

            . Disclosures

            . Performance Measures

            . Fund Raising Ability

            . Analysis of Pledges

            . Analysis of Contributions

            . Looking at Endowments

            . Evaluation of Grants

            . Risk/Return Analysis

            . Audit Reliability

            . Software

            . Spotting Potential Bankruptcy and Avoiding Financial Problems

           . Case Study in Financial Statement Analysis: Family Service Agency of Utopia

            . Appendix

 

5. Forecasting: Revenues, Costs, and Cash Flows

            . Forecasting Methodology

            . The Qualitative Approach

                        . Executive Opinions

                        . The Delphi Method

                        . A Word of Caution

            . Common Features and Assumptions Inherent In Forecasting

            . Steps in the Forecasting Process

            . Moving Averages and Smoothing Methods

                        . Naive Models

                        . Smoothing Techniques

                        . Moving Averages

                        . Advantages and Disadvantages

            . Exponential Smoothing

                        . The Model

                        . The Computer and Smoothing Techniques

            . Regression Analysis

                        . The Least-Squares Method

                        . Use Of Lotus 1-2-3 (DOS) For Regression

                        . Using Regression on Excel

                        . A Word of Caution

                        . Regression Statistics

                        . Lotus and Excel Regression Output

            . Trend Analysis

                        . The Computer and Trend Analysis

            . Multiple Regressions

                        . The Model

            . Evaluation of Forecasts

            . Checklist

            . Measuring Accuracy of Forecasts

                        . MAD, Mse, Rmse, and Mape

            . Survey of Forecasting Methods Used

 

6. The Budgeting Process: Device for Planning and Control

            . Strategic Planning

            .What-if Analysis

            . Contingency Planning

            . Types of Budgets

            . Cash Basis Vs. Accrual Basis Budgets

            . Capital Budget

            . Operating Budget

                        . Budgeting Revenue

                        . Estimating Costs

            . Cash Budget

            . Budget Appraisal

            . Variance Determination and Analysis

                        . Revenue Variances

                        . Cost Variances

                        . Variance Analysis Reports

            . Budgetary Control

            . Support or Capital Additions

            . Encumbrances

            . Budgeting for Specific NPOs

                        . Hospitals

                        . Libraries

                        . Leisure Activities Club

                        . Labor Union

                        . Social Services          

 

7. Zero-Base Budgeting and Program Budgeting

            . Zero Base Budgeting

                        . Zero Base Budgeting Procedures

                        . Activity Units

                        . The Evaluation of Decision Units

                        . Decision Packages

                        . Ranking Packages

                        . Conclusion

            Program Budgeting

                        . The Program Budgeting Process

                        . Financial Aspects

                        . Timing Considerations

                        . Conclusion

 

8. Cost Behavior, Cost Control, and Flexible Budgeting

            . Analysis of Cost Behavior

            . The High‑Low Method

            . Regression Analysis

            . Flexible Budgeting and Cost Control

            . Standard Costs and Variance Analysis

 

9. Enhancing Managerial and Department Performance

            . The Long and Short of Responsibility Accounting

            . Responsibility Accounting and Responsibility Center

            . Mission Centers and Service Centers

            . The Private Sector Measures

            . Segmental Reporting for Mission Centers

            . Performance Measures for Managerial Control

 

10. Obtaining Funds: Short-Term and Long-Term Financing

            . Seed Capital

            . Joint Ventures

            . Internally Generated Funds

            . Annual Membership Dues

            . Sales of Merchandise

            . Trade Credit

            . Fund Raising

            . Advances

            . Grants and Contracts

            . Royalties and Licenses

            . Government Loans

            . Bank Loans

                        . Interest

                        . Compensating Balance

                        . Pledges Receivable as Security

                        . Intermediate-Term loans

                        . Long-Term Loans

            . Bridge Financing

            . Equipment Financing

            . Construction Financing

            . Long-Term Debt: Mortgages and Bonds Payable

                        . Mortgages

                        . Bond Payable

            . Social Lenders

            . Friends and Foundations

            . Trustees and Officers

            . National Offices

            . Insurance Company Loans

            . Leasing

            . Risk Analysis

            . Software

            . Cost of Financing

            . Timing of Financing

 

11. Managing Working Capital and Investing Surplus Funds

            . Using Working Capital Management Effectively

            . Cash Management

                        . Acceleration of Cash Inflow

                        . Delay of Cash Outlay

            . Cash Models

            . Taking Advantage of A Cash Discount

            . Banking Relationships

            . Management of Pledges and Other Receivables

            . Inventory Management

                        . Investment in Inventory

                        . Determining Carrying and Ordering Costs

                        . Economic Order Quantity (Eoq)

                        . The Reorder Point

                        . Quantity Discount

            . Investing Surplus Funds and Investment Strategies      

                        . How Is This Surplus Cash Used?

                        . What Are The Factors To Be Considered In Investment Decisions?

                        . What Are The Questions To Be Asked For The Formulation Of Investment Strategies?

                        . What Are The Types Of Securities?

                        . How About Mortgage-Backed Securities?

            . Other Money-Market (Short-Term Fixed Income) Securities?

            . How To Compute The Yield On Securities

            . How Do You Choose Money Market Funds?

            . A Caveat About Derivatives

 

12. Cost Management and Pricing Decisions

            . Cost Analysis For Pricing

            . Cost Finding and Pricing

            . Allocation of Service Center Costs To Mission Centers

            . Procedure For Service Center Cost Allocation

                        . Direct Method

                        . Step-Down (Two-Stage) Method

                        . Reciprocal Method

            . Organizational Considerations of Cost Control

            . Activity-Based Costing

                        . First-Stage Procedure

                        . Second-Stage Procedure

            . More on Why Use Activity-Based Costing (ABC)?

                        . Value Added and Nonvalue-Added Activities and Costs

                        . Product Costing Less Distorted

                        . Improving Performance

 

13. Analysis for Short-Term and capital expenditure decisions and Financial Modeling

            . Make or Buy Decision

            . Evaluating A Proposal To Discontinue A Program

            . Capital Budgeting

                        . What Are The Types of Investment Projects?

                        .What Are The Features of Investment Projects?

            . Understanding The Concept of Time Value Of Money

                        . How Do You Calculate Future Values ‑ How Money Grows?

                        . What Is Present Value ‑ How Much Money Is Worth Now?

                        . Present Value of Mixed Streams of Cash Flows

                        . Present Value of An Annuity

                        . Use of Financial Calculators and Spreadsheet Programs

            . How Do You Measure Investment Worth?

                        . Payback Period

                        . Net Present Value

                        . Internal Rate Of Return

                        . Can A Computer Help?

                        . Benefit/Cost (B/C) Ratio

            . How To Select The Best Mix of Projects with A Limited Budget

            . The Choice of The Discount Rate and The Cost of Capital

                        . Cost of Long-Term Debt

                        . Cost of Grants and Contributions

                        . Measuring The Overall Cost of Capital

            . Lease Versus Purchase

            . Program Analysis Through Financial Modeling

                        . A Financial Model

                        . Budgeting and Financial Modeling

                        . Use Of Financial Modeling in Practice

                        . Developing Financial Models

                        . Model Specification

                        .What-If Model For College Planning

                        . HOFPLAN for Hospitals

 

Glossary

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