Working Capital Ratio:
Determines how long a charity could sustain its level of spending using its net available assets, or working capital, as reported on its most recently filed Form 990. We include in a charity's working capital unrestricted and temporarily restricted net assets, and exclude permanently restricted net assets. Dividing these net available assets in the most recent year by a charity's average total expenses, yields the working capital ratio. We calculate the charity's average total expenses over its three most recent fiscal years*.
*Explanation of 3 year averaging: 42 months is used in order to capture data from a third 990 in the event of a fiscal year change. We use the most recent IRS Form 990 and then include all full year 990s within the 30 months preceding it. This will usually result in three 990s, except in cases of fiscal year changes that are more than six months, if a 990 was not filed, or if an EZ 990 was filed. We do not use partial year 990s in our evaluation.