Leah Pasternak

Government & Not for Profit ACC410

Chapter 15: Financial Analysis - Homework Submission

15-2

All calculations for this exercise are taken as in thousands.

1. Chaseville is actually not more dependent upon revenues from other governments. According to my
calculations, it appears that Chasevilles revenue is 95% of the total revenue.

= Revenue from own source
Total revenues

= 46,500
48,865

= 0.95 or 95%

2. According to my calculations, Chaseville is not contributing a greater share of its expenditure towards
public safety.

= Public safety expenditure
Total expenditures

= 9,321
44,600

= 0.2090 or 20.90%

3. The City of Chaseville has a very small amount of liquid resources available to be able to use as their
short-term obligations become due, 7.34% to be exact.

= Cash & investments
Current liabilities (total property tax levy)

= 3,120
42,500

= 0.0734 or 7.34%

4. Compared to similar cities, the City of Chaseville has a smaller available general fund balance to meet
future needs.

= Total general fund
Total revenues

= (5,789 + 780)
48,865
= 0.1344 or 13.44%

5. The City of Chasevilles residents definitely pay a higher tax rate than residents from similar cities.

= Property tax revenues
Total operating revenues

= 38,756
48,865

= 0.7931 or 79.31%

6. According to my calculations, the citizens pay about $518.29 in taxes.

= Total property tax levy
Size of population

= 42,500
82

= $518.29 per person

7. It would seem that the City of Chaseville is a wealthier city compared to similar cities due to the fact
that its citizens own relatively more property.

= Total assessed value of property
Size of population

= 2,300,000
82

= $28,048.78

8. Compared to similar cities, the City of Chaseville does not exert greater fiscal efforts.

= Revenue from own sources
Total appraised value of property

= 46,500
2,300,000

= 2.02%

15-5

1. In comparing the 2013 versus the 2003 mix of revenues, it appears that one significant change is in
the sales and use taxes. In 2013 the sales and use taxes were $41,941,000 and in 2003 the sales and use
tax was $18,751,000. Another significant change is in the proceeds from bonds and notes. In 2003 the
amount was $16,330,000 however, it is nil for 2013. The debt service expenses have also increased from
2003 to 2013, being $2,886,000 in 2003 and now at $10,816,000. Total expenditure also increased from
2003 to 2013, being $49,961,000 in 2003 and now at $91,573,000. Due to these items having significant
increases or decreases, it would be difficult to give a straight forward comparison of revenues and
expenditures between the two years.

2. Probably the most significant change between the two years is the increase in the debt service
expense of $7,930,000. Public works has also had a significant increase of $8,973,000. The increase in
sales and use tax are also a significant change.

3. The increase in debt service expense is definitely an issue. Things that could be causing this drastic
increase could be things such as interest rates increasing for things like documentation fees, brokerage
fees, increases in certain fees for processing, etc. This could definitely be a sign of increased financial
stress.

15-7

1. An increase in the population would definitely affect the district. The district could end up paying
more in taxes due to the increase. There would also be an increase in expenditures due to the
population increase which in turn could affect the ability of the district to pay any of its outstanding
debts.

15-8

1. If the ratio is high this shows signs of good performance.
2. If the ratio is increasing it means that the performance is good.
3. This ratio shows the percentage of employees in the overall population.
4. This ratio shows the proportion of property tax revenues that are within the total operating revenues,
so if the ratio is high it doesnt necessarily say the performance is better, it just shows that a majority of
operating revenues come from property taxes.
5. You would want a lower ratio for non-discretionary expenditures /total expenditures.
6. This ratio shows the proportion of unassigned fund balance within the total operating revenues, so a
higher ratio shows that there is more expendable funds.
7. This ratio shows the proportion of inter government revenues balance in the total operating
revenues. If the revenues are more than this means that more revenue comes from the inter
government revenue within the total operating revenue.
8. If the ratio for this is higher than more of the total expenditures are spent on public safety.

15-11

1 a. = revenues from own source
total appraised value of property
= (15,806,923 + 3,662,385) x 10
2,857,215,000
= 0.681
b. = intergovernmental revenue
total revenue
= 15,806,923 x 10
19,469,308
= 81.18%

c. = tax revenue
total operating revenue
= (3,835,255 + 306,748 + 586,685 x 100
19,469,308
= 24.28%

d. total property tax levied
city population
= 5,533,000
17,895
= 309.19

e. = public safety expenses
total expenses
= 8,094,139 x 100
24,483,767
= 33.05%

f. = unassigned fund balance
total operating revenues
= 9,781,447 x 100
19,469,308
= 50.24%

g. = restricted revenue
total operating revenues
= 9,219,045 x 100
19,469,308
= 47.35%

h. = cash, short term investments and receivables
current liability
= (113,537 + 180,835 + 205,004 + 149,517 + 697,315) x 100
573,385 + 697,315
= 1,346,208 x 100
1,270,700
= 105.94

2. Some other additional information that should be sought before drawing any further conclusions
would be the pro forma financial statements which would help the user know the changes which would
occur within the financial statements in case any changes should take place outside of the company.