One of the objectives this week is about identifying key performance measures. It boils down to this...once all the numbers are journaled and reported out...what do they mean? You want to understand the financial position (status of your assets/liabilities at a certain point in time) AND your financial condition (are you solvent, do you have resources to accomplish goals, and so on). And then there is the economic condition (high or low unemployment, stable neighborhoods, etc.).
One way to analyze the financial condition of your community is to analyze the numbers on the CAFR. The book gives us 14 ratios offering different perspectives on the financial condition. For the discussion for this last week, you will briefly report out on the financial condition of your community as follows:
Instructions: Using your CAFR, take at least 4 of the following 14 condition indicators and do the following:
1. Name the condition
2. Show the ratio formula, state what it is assessing and then your CAFR data compute the actual ratio
3. Interpret the results.
The 14 conditions you have to choose from are:
1. Revenues per capita
2. One time revenues
3. Expenditures by function
4. Employees per capita
5. Fund balances
7. Long-term debt
8. Debt service
9. Pension obligations
10. Interperiod equity
11. BTA self-sufficiency
12. Unrestricted net assets
14. Financing margin - property taxes per capita
The first condition considered is "expenditure by function". This is shown in the Government-wide Financial Statements of Activities Fiscal Year ended June 30, 2012. The expenses of the Los Angeles Country Office of Education have been broken down function wise. The broad functions are Instruction, Instruction Related Services, and Support Services. Each broad function lists individual functions. For example, Instruction has "Regular Education, Special Education, and Regional Occupational Program ". Each function shows the expenses, revenues, and net expenses. For example, regular education expenses are $187,601,013, from which revenues are subtracted and net expense of $23,098,906 is listed. The formula is that all the ...
Key performance measures are discussed step-by-step in this solution. The response also has the sources used.