2022-11-14 GC Agenda - Item 5 - Attachment 1 - Annual Report 2021-22

Financial ratios
Ratios are useful tools for getting a snapshot 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 11,
including actual results for the current reporting period plus projections over the next 9 years.

Figure 11 – Financial Ratios 2021/22 (Actual) to 2031/32 (Forecast)




Operating surplus ratio
Council 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. A surplus will be represented by
a positive result.
                                            The 2021/22 operating surplus ratio of 4.29% is a reflection of
  Operating Surplus / (Deficit)
  __________________________________        consistent revenue growth along with good management of our
                                            expenditure. The forecast shows Council’s ongoing commitment
     Total Operating Revenue
                                            to strong financial
                                            management.

Net financial liabilities ratio
The target range is less than 60%. A negative percentage indicates that current assets exceed total
liabilities and is considered a very strong position.

     Net Financial Liabilities
 (Total Liabilities less Current Assets)    The strong position of (15.93%) at 30 June 2022 indicates that Council has
  __________________________________
                                            the capacity to service higher levels of debt if needed.
     Total Operating Revenue


Asset sustainability ratio
This is a measure of whether Council is reinvesting in existing assets to ensure that they meet
required levels of service for the community.

                                            During 2021/22 Council achieved a ratio of 121.13%. This ratio is reflective
   Annual Asset Renewal and
                                            of the delivery of the capital program during the year, including
   Rehabilitation Expenditure
       __________________________________
                                            an investment of $21.5 million in the replacement of infrastructure
                                            such as roads, bridges and buildings. This result reflects Council’s
  Annual Depreciation Charge                investment in infrastructure replacement and adherence to sound asset
                                            continued
                                            management principles to maintain levels of service to the community.



Noosa Council | Annual Report 2021 – 2022

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