Annual Report 2014

Figure 17 – Financial ratios (actual and forecast)

Period Ended                       30-Jun-14 30-Jun-15 30-Jun-16 30-Jun-17 30-Jun-18 30-Jun-19 30-Jun-20 30-Jun-21 30-Jun-22 30-Jun-23
Sustainability Ratios
Operating Surplus Ratio
Operating Position                    (6.5)%      0.1%       1.8%        2.7%     3.6%      4.5%      5.3%      6.1%      6.9%        7.8%
Local Govt Act upper indicator          10%        10%        10%         10%      10%       10%       10%       10%       10%         10%
Net Financial Liabilities Ratio
Net Financial Liabilities Ratio       32.4%       1.4%      (1.0)%     (4.4)%   (10.1)%   (15.7)%   (22.1)%   (29.6)%   (36.9)%     (45.0)%
Local Govt Act upper indicator          60%        60%        60%        60%       60%       60%       60%       60%       60%         60%
Asset Sustainability Ratio
Asset Sustainability Ratio            31.9%     100.0%      96.9%     102.9%     99.1%    104.2%     99.2%     99.2%    102.0%      102.7%
Local Govt Act minimum indicator        90%        90%        90%        90%       90%       90%       90%       90%       90%         90%

                          Notes:    Colour     Within    Moderate    Outside
                                    scale      range                  range




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.

As indicated above, Council should be aiming to achieve a balanced operating position. The
Council operating ratio of -6.49% is skewed by the one off cost of organisational restructure, and if
this is excluded from analysis, the ratio would be a positive 4.8%. Many councils across
Queensland undertook organisational restructures in 2013/14 to reduce their ongoing cost base
and our Council did the same. The ratio provides a baseline for Council against which future
performance will be measured.

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 32.43% as at 30 June 2014 represents a strong outcome for Council and indicates
an inherent capacity to service higher levels of debt, 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. The level of effort in
this area is driven by effective asset management plans, and for the first 6 months of operation the
focus has been on reviewing operations and establishing systems rather than on undertaking
extensive capital works expenditure. The capital works program inherited on 1 January 2014 from
the Sunshine Coast Regional Council for the Noosa area did not have sufficient projects focused
on the renewal of assets. This has been rectified by our Council when it developed its own capital
works program for 2014/15. Forward projections highlight Council’s commitment to ensuring
appropriate levels of investment in replacing community infrastructure.



Noosa Council Report 2014                                                                                                         Page 23 of 24