Noosa Council Annual Report 24/25

An overview of each ratio, together with commentary on Council’s performance for the current financial year is
provided below.



Council Controlled Revenue Ratio                                                                                                   Asset Sustainability Ratio

                                     Council-controlled revenue is an indicator of a council’s financial flexibility, ability to    Capital Expenditure on          The asset sustainability ratio approximates the extent to which the infrastructure assets
 Net Rates, Levies and Charges
 add Fees and Charges                influence its operating income, and capacity to respond to unexpected financial shocks.        Replacement of Infrastructure   managed by a council are being replaced as they reach the end of their useful lives.
                                                                                                                                    Assets (Renewals)
 Total Operating Revenue             Council has a moderate to strong capacity to generate its own operating revenues,                                              Council prioritises the renewal of its existing assets in line with Asset Management
                                     demonstrating financial flexibility and the ability to influence its operating income.         Depreciation Expenditure on     principles to ensure service potential is maintained, before investment in the construction
                                     This positions Council well to respond effectively to unexpected financial challenges.         Infrastructure Assets           of new assets


Population Growth
                                                                                                                                   Asset Consumption Ratio
                                     Population growth is a key driver of a council’s operating income, service needs, and
                                                                                                                                    Written down replacement        This ratio approximates the extent to which council’s infrastructure assets have been
 Prior Year Estimated                infrastructure requirements into the future.
                                                                                                                                    cost of Depreciable             consumed compared to what it would cost to build a new asset with the same benefit
 Population                                                                                                                         Infrastructure Assets
                              -1     Population growth is positive but relatively low which means Council may have less                                             to the community.
 Previous Year Estimated             opportunities to generate operating revenue through an increasing rateable property            Current replacement
 Population                          base and over time may need to develop alternative revenue sources and adjust service          cost of Depreciable             Council is investing sufficiently in the renewal of its existing assets to ensure service
                                     levels and infrastructure spending accordingly.                                                Infrastructure Assets           levels to the community are maintained.




                                                                                                                                                                                                                                                                        Noosa Council Annual Report 24/25
Operating Surplus Ratio                                                                                                            Asset Renewal Ratio
                                     Council should be aiming to achieve as a minimum a balanced operating position to              Total of Planned Capital        The asset renewal funding ratio measures the ability of a council to fund its projected
                                     ensure that revenues received are sufficient to fund operations and capital replacement        Expenditure on Infrastructure   infrastructure asset renewal/replacements (as outlined in its asset management plans)
 Operating Result                    works. A surplus will be represented by a positive result.                                     Asset Renewals over 10 years
                                                                                                                                                                    in the future.

 Total Operating Revenue             The 2024/25 operating surplus ratio of 5.51% is a reflection of consistent revenue growth      Total of Required Capital
                                                                                                                                                                    As noted above, Council is investing sufficiently in the renewal of its existing assets with
                                     along with good management of our expenditure. The forecast shows Council’s ongoing            Expenditure on Infrastructure
                                                                                                                                    Asset Renewals over 10 years    a strong link between Council’s long term financial plan and asset management plans.
                                     commitment to strong financial management.

Operating Cash Ratio                                                                                                               Leverage Ratio

                                     The operating cash ratio is a measure of a council’s ability to cover its core                                                 The leverage ratio is an indicator of a council’s ability to repay its existing debt. It measures
 Operating Result add                operational expenses and generate a cash surplus excluding depreciation, amortisation,         Book value of Debt              the relative size of the council’s debt to its operating performance.
 Depreciation and Amortisation
                                     and finance costs.
 and Finance Costs
                                                                                                                                    Total Operating Revenue less    Council has capacity to support additional borrowings due to its manageable debt levels
                                     Council is generating sufficient revenues to fund its operational expenditure requirements,    total Operating Expenditure     compared to its operational performance. Borrowings are predominantly directed toward
 Total Operating Revenue
                                     while also providing cash flow to support capital expenditure renewal requirements.            add Depreciation and            long-term infrastructure or revenue-generating projects, where alternate funding sources
                                                                                                                                    Amortisation                    have been exhausted as well as giving consideration to inter-generational equity and
                                                                                                                                                                    Council’s ongoing financial sustainability.
Unrestricted Cash Expense Cover Ratio

 (Total Cash and Equivalents         The unrestricted cash expense cover ratio is an indicator of the unconstrained liquidity
 add Current Investments add         available to a council to meet ongoing and emergent financial demands, which is a key
 Available Ongoing QTC Working       component to solvency. It represents the number of months a council can continue
 Capital Facility Limit less         operating based on current monthly expenses.
 Externally Restricted Cash)
                              x 12
                                     Council’s cash position is strong with the majority of restricted cash being internally
 (Total Operating Expenditure
                                     restricted and therefore available to cover emergent expenditure if required. Internally
 less Depreciation and
 Amortisation less Finance Costs)    restricted cash also includes reserves to fund the carryover and completion of Council’s
                                     capital works program.



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