ISA 520 · ISA 570 · Nonprofits

Financial Ratio Calculator
for Nonprofits

Pre-configured for non-profit entities. Total expenditure as base, programme expense ratio, fundraising efficiency, and donor accountability metrics.

ISA 520 · ISA 570v2026.04Manufacturing

30+ ratios, benchmarked.
Not just calculated.

Session
0x6BA0
Fiscal Year
FY 2026
Benchmark
BACH 2023
inputs.conf
methodology.conf
README.md
01// engagement— ISA 520.4
02entity_name=
03fiscal_year_end=
04currency=
05industry=
09// income_statement— current year
10revenue=
11cogs=
12ebit=
13net_income=
17// balance_sheet— period end
18total_assets=
19current_assets=
20current_liabilities=
21total_liabilities=
22total_equity=
awaiting input·3 sections · 2/13 fields · 0 errors·ISA 520 compliantEUR·Manufacturing
01liquidity
current_ratio
quick_ratio
cash_ratio
working_capital
02profitability
gross_margin
net_margin
roe
roa
ebitda_margin
roic
03leverage
debt_to_equity
debt_to_assets
interest_coverage
dscr
equity_multiplier
04activity
inventory_days
dso
dpo
asset_turnover
cash_conversion_cycle
05going_concern
altman_z_score
beneish_m_score
piotroski_f_score
isa_570_flags0
benchmark_source
Manufacturing
BACH database · 2023
Bank for the Accounts of Companies Harmonized. European industry medians (Q1 / median / Q3) from the ECB/ECCBSO aggregated database covering 12 European countries by NACE sector.
≥ median between q1 and median < q1
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ADVANCED ANALYSIS

Deeper ratio analysis, styled the same.

01// sensitivity— revenue stress ±25%
Enter revenue and COGS to run sensitivity.
02// dupont_decomposition— 3-factor ROE breakdown
Enter revenue, net income, and balance sheet to compute DuPont.
03// cross_ratio_intelligence— pattern detection warnings
Enter inputs to run pattern detection.
04// covenant_headroom— typical mid-market covenants
Enter EBIT, debt, and current assets/liabilities to test covenants.
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4 advanced sections · sensitivity · DuPont · cross-ratio · covenants
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Financial ratio analysis for Nonprofits

Financial ratio analysis for non-profit organisations requires a fundamentally different framework from commercial entities. Profit-based ratios (ROE, net margin, ROIC) are not meaningful because the objective is mission delivery, not profit maximisation. Instead, non-profit ratio analysis focuses on operational efficiency (programme expense ratio), financial sustainability (months of operating reserve), and fundraising effectiveness (fundraising efficiency ratio).

The programme expense ratio — programme/charitable expenditure divided by total expenditure — is the primary efficiency metric. Donors, regulators, and the public expect non-profits to spend at least 75% of total expenditure on programme activities (the charitable mission), with administrative and fundraising costs comprising the remaining 25%. In the Netherlands, ANBI (Algemeen Nut Beogende Instelling) status requires that at least 90% of expenditure serves the public benefit. Consistent failure to meet these thresholds raises questions about organisational efficiency and governance.

Working capital for non-profits is often complicated by donor-restricted funds — cash that is legally committed to specific purposes and cannot be used for general operations. When calculating liquidity ratios for ISA 520 analytical procedures, auditors should distinguish between unrestricted and restricted cash. A non-profit may show a strong cash ratio but have most of its cash restricted, leaving it vulnerable to operational cash shortfalls. Similarly, operating reserves should be calculated on unrestricted net assets only.

Regulatory context

ANBI thresholds (Netherlands): 90% of expenditure must serve public benefit. Donor-restricted fund accounting. Grant condition compliance. Charity Commission requirements (UK). CBF Erkenning (Netherlands). EU Anti-Money Laundering Directive implications for large foundations.

Industry-specific going concern indicators (ISA 570)

Operating reserves falling below 3 months

Loss of a major funding source exceeding 25% of revenue

Donor-restricted fund non-compliance requiring restitution

ANBI status revocation or regulatory sanctions

Declining fundraising revenue without corresponding cost reduction

Board governance failures affecting donor confidence

Worked Example: European Non-Profit Foundation

Stichting KinderFonds — Dutch ANBI foundation with €8M total expenditure

Key results: Current Ratio: 2.50, Cash Ratio: 1.78, Working Capital: €2.7M (6.1 months of operating reserve), Net Margin: 3.8% (small surplus — typical for healthy NPOs), D/E: 0.50, Altman Z-Score: NOT APPLICABLE

Frequently asked questions: Nonprofits

Why are profit-based ratios not useful for non-profits?
Non-profits exist to fulfil a charitable mission, not to generate profit. A non-profit showing high ROE or net margin may actually be failing its mission by hoarding resources rather than deploying them. Conversely, a non-profit running a small deficit may be appropriately spending down reserves to serve beneficiaries. Focus instead on programme expense ratio, fundraising efficiency, operating reserve months, and revenue diversification.
What programme expense ratio should a non-profit achieve?
Most charity watchdog organisations consider 75% the minimum acceptable programme expense ratio. Well-run non-profits typically achieve 80–90%. Ratios below 65% suggest excessive administrative overhead or fundraising costs. However, context matters: organisations in investment/capacity-building phases, or those providing complex services requiring significant infrastructure, may legitimately have lower ratios temporarily.
How should restricted funds affect ratio analysis?
Restricted funds (donor-designated for specific purposes) should be excluded from available liquidity. A non-profit with €5M cash but €4M in restricted funds effectively has only €1M available for general operations. For liquidity ratios, calculate both total and unrestricted versions. Operating reserve calculations should use unrestricted net assets divided by average monthly unrestricted expenditure.
What operating reserve level is appropriate for non-profits?
Most non-profit governance guidelines recommend operating reserves of 3–6 months of average unrestricted expenditure. Organisations dependent on a single funding source should maintain larger reserves (6–12 months). Reserves below 3 months indicate vulnerability to funding disruptions. Reserves exceeding 12 months may draw donor scrutiny about whether the organisation is effectively deploying resources.
What are non-profit-specific going concern indicators?
ISA 570 indicators for non-profits include: operating reserves falling below 3 months, loss of a major funding source (>25% of revenue), donor-restricted fund non-compliance requiring restitution, regulatory sanctions affecting charitable status (ANBI revocation in the Netherlands), declining fundraising revenue without cost reduction, and board governance failures leading to reputational damage.

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