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Ministry Financial Efficiency Ratings Calculator

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5 Star Financial Efficiency Ratings Calculation for
Victorious Christian Living International, Inc./ VCL

The overall rating is a summary of the financial efficiency rating system's three efficiency area assessments. The three efficiency areas are:

Fund Acquisition: StarStar
Resource Allocation: Star
Asset Utilization: StarStarStarStar

Together, these individual ratings form the overall 5 Star Rating: StarStar

Step 1: Identify data sources

  • There are 424 ministries being rated in the database
  • The latest year of data for Victorious Christian Living International, Inc./ VCL is 2012. Calculations will be made from this year's data.

Step 2: Collect data points

  • Fundraising Cost: $34,918. How much money is being spent raising money?
  • Public Contributions: $314,388. How much money is donated?
  • Total Expense: $425,283. How much money is spent in total?
  • Program Expense: $206,990. How much money is being spent specifically on the Ministry's program functions?
  • Total Assets: $159,355. How much net value does the ministry have?
  • Total Revenue: $407,499
  • Total Current Assets: $111,216

Step 3: Calculate ratios

Ratio Formula Calculation Value Effect on Star Rating What the Ratio Reflects
Fund Acquisition Efficiency Ratios:
Fundraising Cost Ratio Fundraising Costs / Total Revenue $34,918 / $407,499 0.086 Less is better Is a large share of donor dollars being spent on fundraising?
Contribution Reliance Ratio Public Contribution / Total Revenue $314,388 / $407,499 0.772 More is better Does the ministry rely much on donations, or is a lot of money attained through other means?
Resource Allocation Efficiency Ratios:
Spending Ratio Total Expense / Total Revenue $425,283 / $407,499 1.044 Less is better Are they spending too much for what they get?
Program Output Ratio Program Expense / Total Revenue $206,990 / $407,499 0.508 More is better Is more money being spent on the ministry's progam, rather than other expenses (ex. management, fundraising)?
Asset Utilization Efficiency Ratios:
Degree of Long-term Investment Total Assets / Total Current Assets $159,355 / $111,216 1.433 Less is better Is a lot being stored away for later use?
Current Assets Turnover Ratio Total Expense / Total Current Assets $425,283 / $111,216 3.824 More is better Is much of what the Ministry has being used?

Step 4: Collect database averages

Ratio Average This Ministry Effect on Star Rating
Fundraising Costs Ratio 0.053 0.086 Less is better
Contribution Reliance Ratio 0.938 0.772 More is better
Spending Ratio 0.98 1.044 Less is better
Program Output Ratio 0.801 0.508 More is better
Degree of Long-term Investment 1.591 1.433 Less is better
Current Assets Turnover Ratio 2.8 3.824 More is better

Step 5: Calculate ratio score by dividing the ministry's ratio by the database average

Ratio Ministry / Average Ratio Score Effect on Star Rating
Fundraising Costs Ratio 0.086 / 0.053 1.62 Less is better
Contribution Reliance Ratio 0.772 / 0.938 0.82 More is better
Spending Ratio 1.044 / 0.98 1.07 Less is better
Program Output Ratio 0.508 / 0.801 0.63 More is better
Degree of Long-term Investment 1.433 / 1.591 0.9 Less is better
Current Assets Turnover Ratio 3.824 / 2.8 1.37 More is better

Step 6: Calculate efficiency scores

Efficiency Area Formula Score Effect on Star Rating
Fund Acquisition Efficiency Contribution Reliance Ratio -
Fundraising Costs Ratio
-0.80 More is better
Resource Allocation Efficiency Program Output Ratio -
Spending Ratio
-0.44 More is better
Asset Utilization Efficiency Current Assets Turnover Ratio -
Degree of Long-term Investment
0.47 More is better

Step 7: Calculate efficiency score ranking among all 424 ministries

Fund Acquisition Efficiency Rank 319 of 424
Resource Allocation Efficiency Rank 419 of 424
Asset Utilization Efficiency Rank 100 of 424

Step 8: Calculate efficiency score percentile

Fund Acquisition Efficiency Percentile 24.6%
Resource Allocation Efficiency Percentile .9%
Asset Utilization Efficiency Percentile 76.5%

Step 9: Assign individual ratings

Assign the three individual ratings using the following table:

Percentile Range Resulting stars
00.0% - 10.0% 1 Star
10.0% - 32.5% 2 Stars
32.5% - 67.5% 3 Stars
67.5% - 90.0% 4 Stars
90.0% - 100.0% 5 Stars

This results in the following individual ratings:

Fund Acquisition Efficiency StarStar
Resource Allocation Efficiency Star
Asset Utilization Efficiency StarStarStarStar

Step 10: Calculate average percentile

Average the three percentiles from step 8: 34%

Step 11: Calculate average percentile ranking among all 424 ministries

The overall rank is: 319 of 424

Step 12: Calculate percentile of average percentile

The overall percentile is: 24.6%

Step 13: Assign 5 Star Rating

Assign the 5 Star Rating using the following table:

Percentile Range Resulting stars
00.0% - 10.0% 1 Star
10.0% - 32.5% 2 Stars
32.5% - 67.5% 3 Stars
67.5% - 90.0% 4 Stars
90.0% - 100.0% 5 Stars

Final 5 Star Rating: StarStar

Note: The numbers shown in the above example are sometimes rounded off before they are calculated, as a long string of digits is distracting for many users. This may make the calculation appear imprecise. For the purpose of understanding the calculations the difference is negligible. However, the actual calculations used in the database are precise.