Abstract
The purpose of this paper is to explain the current state and the nature of financial problems of the Japanese NPO sector using financial data analysis which covers 12,509 NPO financial statements. Japanese NPOs were defined as being in the birthing stage, and as such, were mostly concerned with cash flow problems. Analysis of NPO financial data focusing on the cash flow revealed that the both small and big NPOs kept a rather good financial ratio. However, further analysis found that that ratio was possible to preserve as a result of low salaries, expenditures and borrowing from board members and other related members. The managers of NPOs empirically recognize that they have to keep certain amount of cash and liquid asset for their sustainability.
