Income Streams Case Study

There is never enough money, but understanding your expenditures allows you to make informed decisions about accepting contracts or undertaking projects. Understanding what your expenses are is critical if organizations are to be able to plan and grow effectively rather than running from project to project without enough time for proper planning and development.

(II). Are the income streams stable and sufficiently diverse? Why or why not?

The income streams are not stable, but sufficiently diverse because we live in an uncertain world with changing funding priorities. First, it is important to have a mixture of sources of income, so that if one source dries up it does not threaten your organization’s overall viability. Secondly, being able

An operational surplus allows you to do even more with less stress and equips your organization to undertake new activities to accomplish your mission. As regards FareStart, they need to understand what is generating surplus means. For example, if an organization engages in activities outside of its mission, it may be generating unrelated business income. The excessive unrelated business income may create unrelated business income tax or endanger the tax-exempt status of the organization. A second important issue related to revenue is what you do with it. All surplus has to be invested back in the organization; it cannot go in the pockets of staff or board members. Thus, the rule applies whether FareStart has revenues of $4,000 or $40,000,000. Nonetheless, if FareStart creates an unexpected surplus, which cannot be used in operating expenses, it may be possible it creates an endowment, increase it rainy-day reserves, or provide services at a lower cost to

The inefficiency with which FareStart is unable to meet its objectives means that management is yet to meet its goals and objectives. There are several approaches which indicate that FareStart is inefficient and not competitive. It outputs, inputs, internal activities, as well as its financial performance, long-term planning, internal structure, are all but in a critical condition that indicates its ineffectiveness that requires urgent attention. The FareStart is perceived as inefficient and lacks competitive strategy because it is not able to maintain its cash and cash equivalents in bank accounts that may have to exceed federally insured limits during the year. Although FareStart has not experienced any losses in these accounts, and I am convinced they are exposed to some significant credit risk.

(I). Does FareStart have enough cash and receivables to cover their temporarily restricted net assets?

The net assets of an organization are equivalent to the net worth of the organization. Net assets can be liquid (comprising cash and short-term receivables), or fixed (furniture, fixtures, equipment, inventories, and land and buildings net of long-term debt), or long-term. Generally speaking, FareStart has enough assets to cover for their temporarily restricted