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    Financial Ratios February 2018

    City of Joondalup

    APPENDIX 6 ATTACHMENT 1

  • City of Joondalup - Financial Ratios - February 2018 Moore Stephens (WA) Pty Ltd | 1

    Contents 1.0 Overview .......................................................................................................................................................................................................................................... 3 2.0 City of Joondalup Ratios Trends ...................................................................................................................................................................................................... 4 3.0 Regional Comparison ....................................................................................................................................................................................................................... 5

    3.1 Current Ratio ............................................................................................................................................................................................................................. 5 3.2 Debt Service Cover Ratio ........................................................................................................................................................................................................... 6 3.3 Operating Surplus Ratio ............................................................................................................................................................................................................. 7 3.4 Own Source Revenue Coverage Ratio ....................................................................................................................................................................................... 8 3.5 Asset Sustainability Ratio .......................................................................................................................................................................................................... 9 3.6 Asset Consumption Ratio ........................................................................................................................................................................................................ 10 3.7 Asset Renewal Funding Ratio .................................................................................................................................................................................................. 11

    4.0 Selected Local Governments ......................................................................................................................................................................................................... 12 4.1 Current Ratio ........................................................................................................................................................................................................................... 12 4.2 Debt Service Coverage Ratio ................................................................................................................................................................................................... 13 4.3 Operating Surplus Ratio ........................................................................................................................................................................................................... 14 4.4 Own Source Revenue Coverage Ratio ..................................................................................................................................................................................... 15 4.5 Asset Sustainability Ratio ........................................................................................................................................................................................................ 16 4.6 Asset Consumption Ratio ........................................................................................................................................................................................................ 17 4.7 Asset Renewal Funding Ratio .................................................................................................................................................................................................. 18

    5.0 Normal Distribution of Financial Ratios ......................................................................................................................................................................................... 19 5.1 Current Ratio ........................................................................................................................................................................................................................... 19 5.2 Debt Service Coverage Ratio ................................................................................................................................................................................................... 19 5.3 Operating Surplus Ratio ........................................................................................................................................................................................................... 19 5.4 Own Source Revenue Coverage Ratio ..................................................................................................................................................................................... 19 5.5 Asset Sustainability Ratio ........................................................................................................................................................................................................ 20 5.6 Asset Consumption Ratio ........................................................................................................................................................................................................ 20 5.7 Asset Renewal Ratio ................................................................................................................................................................................................................ 20

    6.0 Budgeted Ratios............................................................................................................................................................................................................................. 21 6.1 Current Ratio ........................................................................................................................................................................................................................... 22 6.2 Debt Service Coverage Ratio ................................................................................................................................................................................................... 22

  • City of Joondalup - Financial Ratios - February 2018 Moore Stephens (WA) Pty Ltd | 2

    6.3 Operating Surplus Ratio ........................................................................................................................................................................................................... 22 6.4 Own Source Revenue Coverage Ratio ..................................................................................................................................................................................... 22

    7.0 Other Matters ................................................................................................................................................................................................................................ 23 Appendix A – Ratio Definitions ................................................................................................................................................................................................................. 24 Appendix B – Data Exclusions ................................................................................................................................................................................................................... 25

  • City of Joondalup - Financial Ratios - February 2018 Moore Stephens (WA) Pty Ltd | 3

    1.0 Overview The following information has been compiled from data collected by Moore Stephens from the Annual Financial Reports of Western Australian Local Governments for the following six financial years: 2011/12 (2012), 2012/13 (2013), 2013/14 (2014), 2014/15 (2015), 2015/16 (2016) and 2016/17 (2017). At the date of this report, data relating to one local government in respect of 2016 year and sixteen local governments in respect of 2017 year was not yet available. This fact needs to be taken into consideration when analysing comparisons in relation to 2017.

    The following colour scheme has been used to denote the achievement (or otherwise) of the various standards as established by the guidelines set out by the Department of Local Government and Communities in their Operational Guideline Number 18.

    Ratio below standard; Ratio within a basic standard or meets standard; Ratio meets an intermediate standard or ratio improving; and Ratio above Standard or meets an advanced standard

    Ratio definitions with a short summary of the ratio indicator may be found at Appendix A.

    A list of the local governments where data was not able to be collected at the time of preparing this document can be found at Appendix B.

    If this data was available, it may impact a normal distribution in relation to each ratio.

    A copy of