Meeting papers

                                                                                                                                                                                                        Attachment 4
                                                      2024/25 Budget Statements                                                        RELEVANT MEASURES OF FINANCIAL SUSTAINABILITY
                                                      Budget Review 2                                                                                                            For the period ending 30 June
                                                                Target
Indicator (Tier 3)                                                               BR2                                                                Forecast
                                                                Tier 3
Annual Result - Total Council                                                   2025            2026           2027        2028       2029            2030         2031         2032         2033            2034

Liquidity
                                                               Greater
  Unrestricted Cash Expense Cover Ratio (months)               than 3            7.4             6.1            5.8         5.5        5.2            5.1           5.2          4.8             4.7          4.4
                                                               months
    The unrestricted cash expense cover ratio is an indicator of the unconstrained liquidity available to a council to
    meet ongoing and emergent financial demands, which is a key component to solvency. It represents the number                    Total Cash and Equivalents add Current Investments add Available
    of months a council can continue operating based on current monthly expenses.                                                      Ongoing QTC Working Capital Facility Limit less Externally
                                                                                                                                                           Restricted Cash                                 x 12
    A higher unrestricted cash expense cover ratio indicates that a council has sufficient free cash available to                   Total Operating Expenditure less Depreciation and Amortisation
    contribute to the cost of future planned and unplanned expenditures such as infrastructure investment or                                             less Finance Costs
    disaster recovery.

                                                               Greater
  Total Cash expense Cover Ratio (months)                      than 3            9.5             7.8            7.2         6.9        6.6            6.5           6.1          5.6             5.5          5.2
                                                               months

    The total cash expense cover ratio is an indicator of the total liquidity available to a council to meet ongoing and
    emergent financial demands, which is a key component to solvency. It represents the number of months a
    council can continue operating based on current monthly expenses.
                                                                                                                                         Total Cash and Equivalents add Current Investments                x 12
    A higher total cash expense cover ratio indicates that a council has sufficient free cash available to contribute to            Total Operating Expenditure less Depreciation and Amortisation
    the cost of future planned and unplanned expenditures such as infrastructure investment or disaster recovery.                                        less Finance Costs



Asset Management

                                                                Greater
  Asset Sustainability Ratio                                                   116.6%         140.3%          93.5%        98.4%     104.7%          81.8%        83.6%        88.9%         86.8%           89.2%
                                                               than 80%

    The asset sustainability ratio approximates the extent to which the infrastructure assets managed by a council
    are being replaced as they reach the end of their useful lives.
                                                                                                                                     Capital Expenditure on Replacement of Infrastructure Assets
    An asset sustainability ratio close to 100% suggests that a council is spending enough on the renewal of its                                             (Renewals)
    assets to compensate for the deterioration in its asset base as loosely proxied by its reported depreciation, with
                                                                                                                                             Depreciation Expenditure on Infrastructure Assets
    outcomes too far below this level being potentially indicative of underspending against capital replacement
    requirements.




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