Ministry Financial Efficiency Ratings Calculator
Select a ministry to see how it's ratings are calculated:
5 Star Financial Efficiency Ratings Calculation for LATCOM
The overall rating is a summarization of the financial efficiency rating system’s three efficiency area assessments. The three efficiency areas are:
Fund Acquisition:
Resource Allocation:
Asset Utilization:
Together, these form the overall star rating:
First step, we identify where the data is coming from:
- There are 348 ministries being rated in the database
- The latest year of information for LATCOM is 2011, of which the calculations are made.
Second step, we collect the key information used to make ratio's in our calculation.
For numerators, we use:
- Fundraising Cost: $86,615. How much money is being spent raising money?
- Public Contributions: $592,350. How much money is donated?
- Total Expense: $600,259. How much money is spent in total?
- Program Expense: $402,530. How much money is being spent specifically on the Ministry's program functions?
- Total Assets: $338,797. How much net value does the ministry have?
For denominators, we use:
- Total Revenue: $593,574
- Total Current Assets: $126,573
Third step, we combine the above numbers into fractions called ratios
| Ratio involved |
Division principle |
Division |
Calculated Ratio |
Effect on 5 star rating |
What the ratio answers |
| Fund Acquisition Efficiency Ratios: |
| Fundraising Cost Ratio |
Fundraising Costs / Total Revenue |
$86,615 / $593,574 |
0.146 |
Less is better. |
Is a large share of donor dollars being spent on fundraising? |
| Contribution Reliance Ratio |
Public Contribution / Total Revenue |
$592,350 / $593,574 |
0.998 |
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) |
$600,259 / $593,574 |
1.011 |
Less is better. |
Are they spending too much for what they get? |
| Program Output Ratio |
Program Expense / Total Revenue |
$402,530 / $593,574 |
0.678 |
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) |
$338,797 / $126,573 |
2.677 |
Less is better. |
Is a lot being stored away for later use? |
| Current Assets Turnover Ratio |
(Total Expense / Total Current Assets) |
$600,259 / $126,573 |
4.742 |
More is better |
Is much of what the Ministry has being used? |
Fourth Step, get the database average so we can compare the two
| Ratio |
Average |
This Ministry |
Effect on Star Rating Score |
| Fundraising Costs Ratio: |
0.052 |
0.146 |
Less is better |
| Contribution Reliance Ratio: |
0.932 |
0.998 |
More is better |
| Spending Ratio: |
0.987 |
1.011 |
Less is better |
| Program Output Ratio: |
0.805 |
0.678 |
More is better |
| Degree of Long-term Investment: |
1.732 |
2.677 |
Less is better |
| Current Assets Turnover Ratio: |
3.267 |
4.742 |
More is better |
Fifth Step, Divide ministry ratio by average to calculate score
| Ratio Score |
Ministry / Average |
Ratio Score |
Effect on Star Rating Score |
| Fundraising Costs Ratio: |
0.146 / 0.052 |
2.81 |
Less is better |
| Contribution Reliance Ratio: |
0.998 / 0.932 |
1.07 |
More is better |
| Spending Ratio: |
1.011 / 0.987 |
1.02 |
Less is better |
| Program Output Ratio: |
0.678 / 0.805 |
0.84 |
More is better |
| Degree of Long-term Investment: |
2.677 / 1.732 |
1.55 |
Less is better |
| Current Assets Turnover Ratio: |
4.742 / 3.267 |
1.45 |
More is better |
Sixth Step, Calculate efficiency scores by netting the ratio scores
| Efficiency Score Type |
(Positive Score - Negative Score) |
Efficiency Score |
Effect on Star Rating Score |
| Fund Acquisition Efficiency Score: |
(Fundraising Costs Ratio - Contribution Reliance Ratio) |
-1.74 |
More is better |
| Resource Allocation Efficiency Score: |
(Program Output Ratio Score ? Spending Ratio Score) |
-0.18 |
More is better |
| Asset Utilization Efficiency Score: |
(Current Asset Turnover Score ? Degree of Long-term Ratio Score) |
-0.10 |
More is better |
Seventh Step, rank the score on a scale of 1 - 348
| Fund Acquisition Efficiency Rank: |
311 of 348 |
| Resource Allocation Efficiency Rank: |
322 of 348 |
| Asset Utilization Efficiency Rank: |
105 of 348 |
Eighth Step, convert the rank into the percentile (percentage rank)
This puts the ministry on a scale from 0% to 100% where 100% is the top.
To calculate this, we follow the formaula (Total Population - Rank) / (Total Population - 1)
| Fund Acquisition Efficiency |
10.7% |
| Resource Allocation Efficiency |
7.5% |
| Asset Utilization Efficiency |
70% |
Ninth Step, 5 stars according to each category
Assign the three Individual 5 Star Ratings using the following table:
| Percentile Range |
Resulting stars |
| 00.0% - 10.0% |
1 Star |
| 10.0% - 32.5% |
2 Star |
| 32.5% - 67.5% |
3 Star |
| 67.5% - 90.0% |
4 Star |
| 90.0% - 100.0% |
5 Star |
This translates to:
| Fund Acquisition Efficiency |
|
| Resource Allocation Efficiency |
|
| Asset Utilization Efficiency |
|
Here we have the three different star ratings. The rest of this procedure will use those the three categories to come up with the overall rating.
Tenth Step, find average percentage
Average the above percentages in step 8 to get the overall percentage: 29.4%
Eleventh Step, rank percentages out of the total of 348
The overall rank is: 286 of 348
Twelfth Step, Overall percentile (percentage rank), just like Step 8
Calculate overall percent rank using it's rank as found from the above step and the following formula:
(Total Population - Rank of individual) / (Total Population - 1) = 17.9%
Thirteenth Step, 5 star rating placement
The final task is to match 17.9% percentile into the chart below.
| Percentile Range |
Resulting stars |
| 00.0% - 10.0% |
1 Star |
| 10.0% - 32.5% |
2 Star |
| 32.5% - 67.5% |
3 Star |
| 67.5% - 90.0% |
4 Star |
| 90.0% - 100.0% |
5 Star |
This translates to the resulting overall 5 star rating:
Calculations disclaimer: The numbers shown in the this website 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.