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How Ratios Can Strengthen This Year’s Finances

Key measurements, reported right, can uncover significant trends.

How Ratios Can Strengthen This Year’s Finances

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.

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
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unrestricted revenues

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.

Obviously a church is not a business that's trying ...

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Posted:
  • December 20, 2017

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