2014-01-13 Item 6.3 Appendices 1-5

Table 7 provides a summary of Existing Council’s key historical and forecast ratios for the
FY2010 to FY2017 period.

TABLE 7 – HISTORICAL AND FORECAST FINANCIAL RATIOS
                                                 Actual    Actual    Actual
                                  Benchmark     FY2010    FY2011    FY2012    FY2013   FY2014   FY2015   FY2016   FY2017
Own source operating
                                    > 60%        86.8%     70.1%     71.0%    76.1%    78.3%    79.5%    80.8%     82.2%
revenue

Operating surplus ratio           0% - 10%        1.7%      6.8%      4.0%     1.9%     1.6%     1.7%     0.9%      0.9%


Interest cover                    > 4 times        15.9       8.8       7.9      6.8      6.3      6.3      6.3       7.0


Total debt service cover          > 2 times         n/a       4.5       4.0      3.3      2.6      2.2      1.9       1.7

Cash expense cover                > 3 months       11.1       9.8       8.5      8.5      7.6      6.3      5.0       3.8


Working capital ratio             > 3 times         4.0       3.2       3.1      3.1      2.6      2.1      1.7       1.4


Asset sustainability ratio        > 1.1 times       2.9       3.9       3.3      2.0      2.1      2.1      1.8       1.7

Average useful life of
                                      n/a           n/a       n/a     45.9      45.7     44.8     43.0     40.4      38.2
depreciable assets (years)

Net financial liabilities ratio     < 60%       (17.7%)   (2.6%)     11.1%    20.6%    27.5%    33.7%    36.6%     36.6%




Key points to note from Table 7 include:
 With the exception of debt service cover, all financial metrics either meet or comfortably
  exceed the recommended benchmarks.
 SCRC derives the majority of its revenue from sources over which it has control, such as
  general rates and utility charges, with an own source revenue ratio greater than 75 per cent
  over the forecast period. This provides significant financial flexibility and some protection
  against adverse financial shocks.
 Given the strong asset sustainability ratio with falling average useful life of the asset base,
  SCRC’s forecast depreciation expense appears overestimated.




De-amalgamation Analysis of Sunshine Coast Regional Council                                                       Page 14