Annual Report 2017-18

Financial Ratios
Ratios are useful tools for getting a snap-shot of the financial status and trends of an organisation. Ratios
can also be useful in comparing Noosa Council to other Councils to gain an understanding of relative
financial strength. This analysis is undertaken periodically by the Queensland Treasury Corporation (QTC) in
assessing the financial sustainability of Council.

A number of sustainability ratios are mandated under the Local Government Regulation 2012, including
target ranges for each measure. Details of these ratios are shown in Figure 10, including actual results for
the current reporting period plus projections over the next 9 years.


Figure 10 - Financial Ratios 2017/18 (Actual) to 2026/27 (Forecast)

Period ended 30 June                       2018      2019      2020      2021    2022     2023    2024    2025      2026      2027


Sustainability Ratios
Operating Surplus Ratio

Operating Position                      13.5%        0.0%      0.1%      0.3%    0.9%    1.0%     1.1%    1.0%     8.6%      2.0%

Local Govt Act upper indicator             10%       10%        10%      10%      10%     10%     10%     10%       10%       10%

Net Financial Liabilities Ratio

Net Financial Liabilities Ratio       (12.6)%        1.9%      4.4%      1.6%    0.7%    0.9%     0.1%   (2.3)%   (2.4)%   (3.9)%

Local Govt Act upper indicator             60%       60%        60%      60%      60%     60%     60%     60%       60%       60%

Asset Sustainability Ratio (not audited)

Asset Sustainability Ratio            130.9%       118.4%    109.8%     93.2%   86.0%    94.7%   98.4%   97.5%    103.0%     87.5%

Local Govt Act minimum indicator           90%       90%        90%      90%      90%     90%     90%     90%       90%       90%


Colour Scale:                          Within     Moderate   Outside
                                      Range                  Range




Operating surplus ratio                                                Net financial liabilities ratio
This ratio measures the operating surplus achieved                     This ratio represents Council’s net financial
for the period and represents the operating surplus                    liabilities (total liabilities less current assets)
/ (deficit) as a percentage of operating revenue. A                     expressed as a percentage of total operating
surplus will be represented by a positive result.                      revenue. The target range is less than 60%. A
                                                                       negative percentage indicates that current assets
Council’s should be aiming to achieve as a                             exceed total liabilities, and is considered a very
minimum a balanced operating position to ensure                        strong position.
that revenues received are sufficient to fund
operations and capital replacement works. The                          The strong position of (12.6%) as at 30 June 2018
2017/18 operating surplus ratio of 13.5% is a                          indicates that Council has capacity to service higher
reflection of strong revenue growth along with                          levels of debt if needed.
good management of our expenditure, partial
prepayment of the 2018/19 financial assistance
grant early in June 2018, revaluation of non-current
asset impacts on depreciation expense, as well
as some unspent levy funds that are required to
be held for future use. The forecast also shows
Council’s ongoing commitment to strong financial
management.




Page 38 | 2017-2018 Annual Report