This article offers guidance for tracking budgets through various key financial ratios—along with insights on why these measurements are important for building financial health. Start the year right by monitoring these ratios now and into the years to come. Then watch for an upcoming article focused on monitoring debt ratios.
For many of the ratios, the top number should be divided by the bottom number. This will produce a usable measurement for tracking trends and making comparisons.
Income and giving ratios
There are four ratios that can help you better understand your congregation's giving patterns.
1. Net income ratio
change in unrestricted net assets
This ratio reveals the change in unrestricted net assets to unrestricted revenues. It shows whether your church's general operations are positive or negative, and by how much. It answers the question of whether the church is making or losing money in its day-to-day ministry.