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Land, Buildings, and Equipment to Assets Ratio (Net)

Source: R/get-land-assets-net-ratio.R
get_land_assets_net_ratio.Rd

Net land, buildings, and equipment as a share of total assets.

Formula:

land_assets_net = land_bldg_equip_net / total_assets

Definitional Range

Bounded [0, 1] in normal conditions. Heavily skewed toward zero because many nonprofits own no real property.

Benchmarks and rules of thumb

  • Values below 0.10 are typical for lean service organizations.

  • Values above 0.50 indicate that more than half of assets are fixed property, limiting financial flexibility.

  • Declining values over time may reflect depreciation outpacing new capital investment rather than strategic deleveraging.

Calculated For: 990 filers only.

Usage

get_land_assets_net_ratio( df,
  land_bldg_equip_net       = "F9_10_ASSET_LAND_BLDG_NET_EOY",
  total_assets              = "F9_10_ASSET_TOT_EOY",
  winsorize  = 0.98 ,
  range     = "zo",
  sanitize   = TRUE,
  summarize  = FALSE )

Arguments

df

A data.frame containing the fields required for computing the metric.

land_bldg_equip_net

Net land, buildings, and equipment EOY (after accumulated depreciation). )

total_assets

Total assets, EOY. )

winsorize

Winsorization proportion between 0 and 1 (default 0.98).

range

Character string specifying the theoretical range of the ratio, used to set winsorization bounds. Default "zo". 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, imputes zero for NA financial fields before computing, respecting form scope.

summarize

Logical (default FALSE). If TRUE, prints summary statistics and density plots for all four output columns.

Value

The original data.frame with four columns appended: land_assets_net, land_assets_net_w, land_assets_net_z, land_assets_net_p.

Details

Primary uses and key insights

The land, buildings, and equipment to assets ratio (net version) measures what share of total assets is represented by the net book value of fixed physical assets after accumulated depreciation. This is the standard version used in most nonprofit financial analyses, since it reflects current accounting value. High values indicate capital-intensive organizations; low values indicate lean service organizations. Very high values (above 0.60) may suggest illiquidity risk. Available on both 990 and 990EZ forms (PZ scope).

Formula variations and their sources

Net land, buildings, and equipment (Part X line 10cB) / total assets (line 16B). The gross version (get_land_assets_gross_ratio()) uses accumulated depreciation instead of net book value.

Canonical citations

  • Frumkin, P. & Keating, E.K. (2001). The price of doing good. Policy and Society, 20(4), 94-112.

  • Bowman, W. (2011). Financial capacity and sustainability of ordinary nonprofits. Nonprofit Management and Leadership, 22(1), 37-51.

Variables used:

  • F9_10_ASSET_LAND_BLDG_NET_EOY: Net land, buildings, and equipment, EOY (land_bldg_equip_net)

  • F9_10_ASSET_TOT_EOY: Total assets, EOY (total_assets)

Examples

library( fiscal )
data( dat10k )
d <- get_land_assets_net_ratio( df = dat10k )
#>    :: Total assets equal to zero :: 268 case(s) replaced with NaN
head( d[ , c( "land_assets_net", "land_assets_net_w", "land_assets_net_z", "land_assets_net_p" ) ] )
#>    land_assets_net land_assets_net_w land_assets_net_z land_assets_net_p
#>              <num>             <num>             <num>             <int>
#> 1:      0.00000000        0.00000000         -3.047203                 1
#> 2:      0.00000000        0.00000000         -3.047203                 1
#> 3:      0.01010797        0.01010797         -1.393079                66
#> 4:      0.00000000        0.00000000         -3.047203                 1
#> 5:      0.99601549        0.96576565          3.694306               100
#> 6:      0.00000000        0.00000000         -3.047203                 1