This ratio reflects the ability of the organization to meet current operating expenditures from available expendable resources without relying on current revenues. Expendable fund balances should increase in proportion to the rate of growth of operations in order to provide a constant margin of protection against adverse financial contingencies. USNH's 1994 ratio of .17 to 1 has improved slightly over the past five years from .16 to 1 in 1990. Minimal progress was made at USNH during 1994, so it is still relatively under-capitalized considering its operating size.
Liquidity refers to an entity's ability to meet future obligations as they mature.
A commonly used measure of short-term solvency in the commercial sector is the current ratio. The current ratio is computed by dividing current assets by current liabilities. The current ratio has improved from 1.9 to 1 in 1990 to 2.1 to 1 in 1994. The Thorne-Sagendorph Art Gallery at KSC opened one year ago to an outstanding exhibit by contemporary artist, Jules Olitski.