2016-11-08 S&O Agenda - Item 3, Attachment 1 - Local Economic Plan

Operating Surplus Ratio
This ratio measures the operating surplus achieved for the period and represents the operating
surplus / (deficit) as a percentage of operating revenue. A surplus will be represented by a positive
result.

Council’s should be aiming to achieve as a minimum a balanced operating position to ensure that
revenues received are sufficient to fund operations and capital replacement works. The 2015/16
operating surplus ratio of 5.0% is a reflection of revenues received being above those forecast
along with good management of our expenditure, 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.



Net Financial Liabilities Ratio
This ratio represents Council’s net financial liabilities (total liabilities less current assets) expressed
as a percentage of total operating revenue. The target range is less than 60%. A negative
percentage indicates that current assets exceed total liabilities, and is considered a very strong
position.

The position of (1.5%) as at 30 June 2016 represents a strong outcome for Council and indicates
that we have capacity to service higher levels of debt if needed, though additional debt funding has
not been included in forward projections.



Asset Sustainability Ratio
This ratio is calculated by measuring the annual expenditure on the renewal and rehabilitation of
Council’s assets against the annual depreciation charge. It is a measure of whether Council is
reinvesting in existing infrastructure assets to hold them in optimal condition. For the 2015/16 year,
Council achieved a ratio 88.36%. This is reflective of the successful delivery of a significant capital
works program during the year, with strong asset management being sustained over forward
projections.


Summary
Financial performance for the year ended 30 June 2016 reflects an excellent result for Council, and
provides a firm foundation for the delivery of sustainable service delivery into the future. Ongoing
innovation and a commitment to strong financial management through compliance with our
Financial Sustainability policy will support this established foundation.




Noosa Council Annual Report 2015/16                                                               Page 37