2015-11-16 GC Agenda - Item 3, Attach 1 - Annual Report 2014-15

Table 12 – Financial ratios (actual and forecast)
Period Ended                       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 30-Jun-24
Sustainability Ratios
Operating Surplus Ratio
Operating Position                     7.9%      1.3%       1.5%       1.9%    2.3%       2.6%      1.9%      2.0%      1.9%      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        1.2%     12.3%      11.4%     10.2%     8.6%       4.2%      0.7%     (3.2)%    (7.0)%    (9.9)%
Local Govt Act upper indicator          60%       60%        60%       60%      60%        60%       60%       60%       60%       60%
Asset Sustainability Ratio
Asset Sustainability Ratio            65.1%    129.5%      99.0%    100.1%    100.6%    100.1%     97.8%     97.1%     96.2%    100.0%
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.
Councils 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 2014/15
operating surplus ratio of 7.9% is a reflection of revenues being received 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.


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 this is considered to be a very
strong position.
The position of 1.2% as at 30 June 2015 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. Whilst Council’s
2014/15 ratio of 65.1% did not achieve the minimum target range of 90%, the uncompleted works
will be delivered in the 2015/16 financial year, as reflected in the 2015/16 ratio. Forward projections
highlight Council’s commitment to ensuring appropriate levels of investment in replacing
community infrastructure.


Summary
The financial period ended 30 June 2015 represents an excellent financial result for Council,
reinforces the financial sustainability rating provided by the state government (i.e. QTC), and
provides a firm foundation for future operations. Ongoing innovation and a commitment to strong
financial management through compliance with our Financial Sustainability policy will ensure that
this strong position is maintained into the future.

Noosa Council Annual Report 2014/15                                                                                                 Page 34