1. Financial Analysis

2. Government’s economic condition Financial position Ability and willingness to meet commitments Satisfy financial obligations See table 15-1

3. Financial Analysis Fiscal Capacity Trend Liquidity Solvency Funding

4. Fiscal Capacity Ability to command resources Look at demographics Leadership characteristics Wealth of citizens Mix of business vs. homeowners Fiscal effort – Per capita revenue from gov’t sources Median family income

5. Financial Analysis Must always be compared to something – Prior years – Other similar governments – To rule of thumb measures Census – www.census.govwww.census.gov Economic Analysis – www.bea.doc.govwww.bea.doc.gov Labor Statistics – stats.bis.gov

6. Operating information Surpluses or deficits Intergovernmental revenue/total operating revenue – How dependent is the government on others Restricted revenue/total revenue – How flexible can the government be in the revenue they get Property tax revenue/total – Most governments get the majority of their funds from property tax Discretionary expenditures/total expenditures – Addresses the ability to cut expenditures

7. Trend Analysis Surpluses/deficits over the years Increases in surpluses and deficits Population trends Additional businesses Common Sizing Percentage change over years Percent distribution

8. Liquidity Measures the ability to pay current bills Current ratio – Current assets Current liabilities Quick ratio – Cash + cash equivalents Current Liabilities Acceptable levels??

9. Solvency Measures the ability to pay L/T debt Leverage – L/T Debt (info from Gov’t-wide) Assets Coverage – DS Expend GF + DS Expenditures

10. Funding Property tax per capita Property tax per $1K of assessed value Debt per capita Debt margin Expenditure per capita Other revenues/ total revenues