Monthly Financial Report for August

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Sudane Erato
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Monthly Financial Report for August

Post by Sudane Erato »

Monthly Financial Report

While the July financial reports were published last month, I missed my usual monthly comment. I'll try to make up for that this month.

Here are the various reports.....

Neufreistadt Balance Sheet in Lindens ... heetLD.pdf

Neufreistadt Balance Sheet in US Dollars

Neufreistadt Income/Expense Report in Lindens ... enseLD.pdf

Neufreistadt Income/Expense Report in US Dollars ... xpense.pdf

They're also available thru this page on our website.....

As usual, my comments use the US dollar version of the reports. We do that because the inalterable necessity of NFS life is to be certain that the monthly fee to the Lindens get paid, which is fixed in US dollars. From a long term perspective, however, I am firmly of the position that the finances of our organization should be managed in our native currency, which is Lindens. We are an entity in the Second Life world, including a financial entity. Ultimately, we must think in terms of the currency of our world. If that means managing our monthly obligation to LL as a fluctuating value, so be it.

Looking first at the Income and Expense Report (as usual), we can see that we had an excellent month. Between the fact that we are collecting essentially maximum monthly fees and the fact that many folks are paying fees in advance, the Monthly Fee income was a whopping $281. This, combined with moderate land sales fees resulted in a very good revenue month. Expenses were normal. The net result was a surplus of $142 for the month of August.

I'll take this moment, after looking at the Income/Expense Report, to comment on the currency exchange rate, which profoundly influences how we do each month. How does it influence it? Since on this report, everything is converted to US$, and since the monthly fee to LL is fixed at US$195, the revenue numbers, mostly collected in L$, will be higher when converted into US$, and the bottom line net profit will be higher. If The L$ had been worth only 350 to one US$, our net profit for the month would have been a good deal lower than US$142.

I am not one to explain or even understand why the US$/L$ exchange rate goes up and down. I am only here to celebrate when it takes only 291 L$s to buy one US$, or to be forlorn when the rate goes up to 350 to the dollar. I have been a long term advocate of keeping our reserves in L$... at the moment I think my strategy does well for us.

Which leads us to the Balance Sheet, the reports which lists everything we own (the Assets), minus everything we owe (the Liabilities), resultling in the "net worth" of our enterprise (the Equity). You'll see in the Assets section that our "current assets", which is cash, is just about US$1200. This, plus our "fixed assets" (builds and software which we own) gives us assets of US$1372.

The only thing we "owe" are the long term escrow deposits made by the companies which have used the NFS entity as a guarantee on their performance. This is technically their money, therefore we "owe" it. But it is on deposit with us for the long term, therefore a "Long Term Liabilities".

The result on this report is the announcement that we are now worth US$1269 (Total Equity). This is whats called the "book value". Another way of determining our value is to take our cash (Current Assets) US$1194, add to that a dollar value that we could easily get if we were to sell the sim (let's say US$1000), for a total value of US$2194. This might be called the "cash value". Either way, for a non-profit single sim entity, we are healthy indeed!

Questions? Please do not hesitate to contact me!



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