The Financial Position of Habitat for Humanity

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The Statement of Financial Position for Habitat for Humanity reveals a number of changes in the organization's financial position over the past year. The value of the current assets has declined considerably. While the cash level has increased, the investments have declined. The current portion of grants receivable is also considerably lower this year than last, as is the inventory of homes. These figures must be taken in the context of the organization overall, however, and the value of the long-term assets is considerably higher than it was this time last year. There was an increase in mortgage notes receivable, but the most significant increase in the long-run assets was in construction in progress, and the new markets tax credit joint venture investment. Taken together, it appears that Habitat for Humanity has a significantly different balance sheet this year because it is in a different stage of its business cycle. While the inventory of new homes is down significantly, this is more than offset by the value of new construction. The decline in investments appears to be because those investments were sold and are now sitting in cash. The decline in grants receivable is likely attributable to the increase in construction. This simply reflects an increased need for cash as the result of new projects, and likely new sources of cash to help finance this construction cycle. The decline in current assets is offset as well by a sharp decline in current liabilities. The
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