What are the advantages of the not-for-profit company vs. the for-profit company?

Topic: Comprehensive Annual Financial Report (CAFR)

State and local governments are accountable to much more than private investors. They are accountable to the community as a whole. Communities are required to publish a comprehensive annual financial report (CAFR). Please locate a state or local government’s comprehensive annual financial report (CAFR) and answer the following questions:

  1. How does the CAFR compare to a traditional for-profit business?
  2. What are the major sources of revenue?
  3. What are the major expenditures?
  4. Do you feel that this entity is healthy?
  5. What are some areas of improvement?

Topic: Evaluating the Not-For-Profit Entity

In the accounting world, you find that there are many benefits to becoming a not-for-profit entity. These may be so considerable that traditional for-profit entities forgo their profit making potential. With this in mind, please answer the following questions:

  1. Please identify an industry where the for-profit companies are being outweighed by not-for-profit companies.
  2. Please identify an industry where the not-for-profit companies are being outweighed by for-profit companies?
  3. What are the advantages of the not-for-profit company vs. the for-profit company?
  4. For which entity (i.e., non-profit or for-profit) is it is easier to raise capital?
  5. If you were forming a new hospital business, would you choose to be a for-profit hospital or a not-for-profit hospital? Please justify your response.

Answer

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