The figure shows the average and median of the reserve ratios. The reserve ratio 1 places the organizational capital in relation to the operating expenses. In order to facilitate interpretation, the value is multiplied by twelve. Accordingly, a value of 18 would mean that the existing organizational capital is sufficient to cover the operating expenses of the organization for 18 months. The reserve ratio 2 is calculated in analogy, taking into account the organizational capital as well as the fund capital. The reserve ratio 2 is correspondingly higher (or at least equal) than the reserve ratio 1. The ratio allows a certain statement as to whether the organization is well secured. However, if the characteristic number is very high, this can also lead to challenges when donors demand a reduction of reserves. The reserve ratio is to be assessed individually for each organization.
Reserve ratio 1 = Organisational capital/working expenses * 12
Reserve ratio 2: = (organizational capital + fund capital) / operating expenses * 12