Days of Operating Cash and Investments — get_days_cash

Measures how many days an organization can operate using its liquid assets plus its investment securities.

Formula:

doci = ( liquid_assets + investments ) / daily_expenses

liquid_assets  = cash + savings + pledges_receivable + accounts_receivable
investments    = publicly_traded_securities + other_securities
daily_expenses = ( total_expenses - depreciation ) / 365

Definitional Range

Zero or positive for ordinary filings and unbounded above, expressed in days. Values above 365 indicate more than one year of coverage. The metric adds investments to the numerator of get_days_cash_operations(), so it is at least as large whenever the reported investment balances are non-negative. Negative values come only from filing anomalies: negative receivable or investment balances, or depreciation larger than total expenses.

Benchmarks and rules of thumb

180-365 days: Considered a solid reserve position for endowed organizations.
A large gap between this metric and get_days_cash_operations() indicates liquidity concentrated in investments rather than accessible cash.

Calculated For: 990 filers only.

Usage

get_days_cash_investments( df,
  cash                = "F9_10_ASSET_CASH_EOY",
  savings             = "F9_10_ASSET_SAVING_EOY",
  pledges_receivable  = "F9_10_ASSET_PLEDGE_NET_EOY",
  accounts_receivable = "F9_10_ASSET_ACC_NET_EOY",
  investments         = c( "F9_10_ASSET_INVEST_SEC_EOY",
                           "F9_10_ASSET_INVEST_SEC_OTH_EOY" ),
  total_expenses      = "F9_09_EXP_TOT_TOT",
  depreciation        = "F9_09_EXP_DEPREC_TOT",
  numerator = NULL, denominator = NULL,
  winsorize = 0.98 ,
  range     = "zp",
  sanitize  = TRUE,
  summarize = FALSE )

Arguments

df: A data.frame containing the fields required for computing the metric.
cash: Cash on hand, EOY.
savings: Savings and temporary cash investments, EOY.
pledges_receivable: Net pledges and grants receivable, EOY.
accounts_receivable: Accounts receivable, net, EOY.
investments: Investment securities, EOY. One or more column names whose values are summed (unlike most column arguments, which coalesce a 990 and a 990-EZ field). Defaults to publicly traded securities (Part X line 11) plus other securities (line 12).
total_expenses: Total functional expenses.
depreciation: Depreciation, depletion, and amortization.
numerator: Optional. A pre-aggregated column for liquid assets plus investments. When supplied, cash, savings, pledges_receivable, accounts_receivable, and investments are ignored; it is an error to also set one of them explicitly.
denominator: Optional. A pre-aggregated column for annual non-depreciation expenses (the function divides this by 365 internally). When supplied, total_expenses, depreciation are ignored; it is an error to also set one of them explicitly.
winsorize: The winsorization value (between 0 and 1), defaults to 0.98, which winsorizes at the 1st and 99th percentiles.
range: Character string specifying the theoretical range of the ratio, used to set winsorization bounds. Default "zp". Options: "np" (negative to positive), "zp" (zero to positive), "zo" (zero to one), "nz" (negative to zero), or a custom "lo;hi" pair (e.g. "0;10").
sanitize: Logical (default TRUE). If TRUE, NA values in the financial input columns are imputed to zero before the ratio is computed, respecting form scope: Part X and VIII/IX fields (990 only) are imputed only for 990 filers; Part I summary fields (990 + 990EZ) are imputed for all filers. The returned dataframe always contains the original unmodified input columns.
summarize: Logical. If TRUE, prints a summary() of the results and plots density curves for all four output columns (raw, winsorized, z-score, percentile). Defaults to FALSE.

Value

Object of class data.frame: the original dataframe appended with four new columns:

- `days_cash_inv`   - days of operating cash and investments (raw)
- `days_cash_inv_w` - winsorized version
- `days_cash_inv_z` - standardized z-score (based on winsorized values)
- `days_cash_inv_p` - percentile rank (1-100)

Details

Primary uses and key insights

Days of cash and investments extends get_days_cash_operations() by adding investment securities to the liquidity numerator. It asks: if the organization drew on its cash, receivables, and investment portfolio, how many days of operations could it fund? This broader measure captures organizations that hold significant reserves in investment portfolios rather than bank accounts.

It is most relevant for endowed organizations, foundations, and mature nonprofits that hold investment portfolios. For organizations with no investments, get_days_cash_operations() and this metric are identical, so the difference between the two is the coverage that investments add.

Formula variations and their sources

(Cash + savings + pledges receivable + accounts receivable + publicly traded securities + other securities) / ((total expenses - depreciation) / 365), using Part X lines 1, 2, 3, 4, 11, and 12 and Part IX line 25 less line 22. Rating agencies use a similar "days cash on hand" measure that adds unrestricted cash and investments; this version keeps the receivables in get_days_cash_operations() so the two metrics nest. Program-related investments (line 13) are excluded because they are not held for liquidity.

The Form 990 does not separate donor-restricted investments, such as permanent endowment, from unrestricted ones, so the numerator can overstate the resources available for general operations. For organizations with large restricted endowments, read this metric alongside get_netassets_composition_ratio().

Earlier versions started from unrestricted net assets, added investments, and subtracted both net fixed assets and mortgages. That counted investments twice (they are already part of net assets) and treated mortgage debt as reducing liquidity a second time, so organizations with mortgaged buildings often scored negative. Earlier versions also used F9_10_ASSET_INV_SALE_EOY (Part X line 8, inventories) as investments.

Canonical citations

Zietlow, J., Hankin, J.A. & Seidner, A. (2007). Financial Management for Nonprofit Organizations. Wiley.
Calabrese, T.D. (2013). Running on empty: The operating reserves of U.S. nonprofit organizations. Nonprofit Management and Leadership, 23(3), 281-302.

Variables used:

F9_10_ASSET_CASH_EOY: Cash, non-interest bearing, EOY (Part X line 1) (cash)
F9_10_ASSET_SAVING_EOY: Savings and temporary cash investments, EOY (Part X line 2) (savings)
F9_10_ASSET_PLEDGE_NET_EOY: Pledges and grants receivable, net, EOY (Part X line 3) (pledges_receivable)
F9_10_ASSET_ACC_NET_EOY: Accounts receivable, net, EOY (Part X line 4) (accounts_receivable)
F9_10_ASSET_INVEST_SEC_EOY: Investments, publicly traded securities, EOY (Part X line 11) (investments)
F9_10_ASSET_INVEST_SEC_OTH_EOY: Investments, other securities, EOY (Part X line 12) (investments)
F9_09_EXP_TOT_TOT: Total functional expenses (total_expenses)
F9_09_EXP_DEPREC_TOT: Depreciation and amortization (depreciation)

Examples

library( fiscal )
data( dat10k )

d <- get_days_cash_investments( df = dat10k )
#>    :: Daily operating expenses equal to zero :: 63 case(s) replaced with NaN
head( d[ , c( "days_cash_inv", "days_cash_inv_w", "days_cash_inv_z", "days_cash_inv_p" ) ] )
#>   days_cash_inv days_cash_inv_w days_cash_inv_z days_cash_inv_p
#> 1            NA              NA              NA              NA
#> 2    1257.01084      1257.01084       1.5181470              84
#> 3            NA              NA              NA              NA
#> 4      17.10234        17.10234      -0.9388209               7
#> 5            NA              NA              NA              NA
#> 6     890.60000       890.60000       1.1370797              79