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Policies and Procedures - Finance |
3.4 Disaster Scenario - approved 9/6/96 -
Calculation of Minimum Reserve Level
The minimum Reserve Level should be that amount necessary to cover the most disastrous circumstances possible. In the Communications Society, this scenario is assumed to be the following situation:
- The loss of all advertising in ComSoc magazines.
- A reduction of 25% membership in the Communications Society. (This would be somewhat offset by a 25% reduction in printing/mailing costs.)
- No net income from conferences - i.e. a break-even situation for M&C.
These assumptions are summarized below as deviations from the budget, using 1994 as a base year.
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DEVIATION
FROM BUDGET
(000 Omitted) |
| 1. |
Assume that Conferences "fall flat" (i.e. There is no net income.)............................................................................................. |
-$ |
1052 |
2. |
Assume advertisers withdraw all advertising from publications (i.e. There is no income from ads.)........................................................................... |
-$ |
1270 |
3. |
Assume a 25% Membership decline:
-Reduced ComSoc Dues...................................................................
+Reduced Publications Costs (Less printing)...................................... |
-$
+$ |
172
257 |
Total reduction in net income in the "Disaster Scenario"...................... |
$ |
2237 |
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It is recommended that an amount of $2.5 million should be the Minimum Reserve Level for the Communications Society operations. Budgets should be derived with this minimum as the norm.
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