10-21. Comparative Ratios. (LO10-4 The government-wide financial statements for the City of Arborland for a three-year period are presented below. Additional information follows: Population: Year 2020: 30,420. Year 2019: 28.291, Year 2018: 26,374. Debt limit remained at $20,000,000 for each of the three years. Net cash from operations is generally 80 percent of total revenues each year. Required a. Which of the financial performance measures in Illustration 10-4 can be calculated for the City of Arborland based on the information that is provided? b. Calculate those ratios identified in part a for FY 2020. Show your computations. c. Provide an overall assessment of the City of Arborland's financial condition using all the information provided, both financial and nonfinancial. Use information from the prior years to form your assessment CITY OF ARBORLAND Statements of Net Position As of December 31 (In Thousands) 2020 Business- type Activities 2019 Business type Activities 2018 Business- type Activities Governmental Activities Governmental Activities Governmental Activities Total Total Total $ 1,487 179 1.472 $ 5,540 733 2.747 253 26 9,299 $ 1.800 291 1.809 8 58 _3.966 $ 7.340 1,024 4.556 261 $4 13,265 $ 4.531 638 2.947 251 101 8,468 $ 1.663 181 1.608 6 48 _3,506 $ 6.194 819 4.555 257 149 11.974 $ 3,452 769 1.865 171 167 6.424 $ 4.939 948 3.337 176 216 9.616 5 49 3.192 2.180 37,600 _(15.039) 24.741 2.101 14.455 _(5.782) 10.774 4.281 52.055 _(20.821) 35,515 2.070 37.183 _(16.732) 22.521 1.804 17.775 (9.776 9.803 3.874 54.958 (26.508) 32.324 1.971 39,347 _(19.680 21.638 1,604 14.S01 _(7.402) _ 9.003 3.575 54.148 (27.082) 30.641 Assets Current assets: Cash Investments Receivables (net) Prepaid expenses Inventories Total current assets Capital assets: Land Depreciable assets Accumulated depreciation Total capital assets (net) Total assets Liabilities Accounts payable Deferred revenue Other, current Total current liabilities Bonds payable Total liabilities Net Position Net investment in capital assets Restricted for: Capital projects Debt service Unrestricted (deficit) Total net position 34.040 14.740 48.780 30.989 13.309 44.295 28.062 12.195 40.257 467 376 295 1,580 32 1,754 3,366 15.900 19.266 200 667 6.500 7.167 2.047 32 1.954 4,033 22.400 _26.433 412 30 1.443 1.885 16.900 _19.755 190 566 __7.500 8.066 788 30 1.633 2,451 24.400 26.851 1,633 42 1.489 3,164 15.900 19.064 170 465 _6.500 6.965 1.928 42 1.659 3.629 22.400 26.029 9.104 4,027 13.131 7.945 3.065 11.010 5.366 2.067 7.433 11 1 140 933 4.597 $ 14.774 140 933 8.143 $ 22.347 151 1.033 3.075 $ 12.204 151 1.033 5.253 $ 17,447 130 SIS 2.683 $ 8.997 130 SIS 5.846 $ 14.227 3,546 7.573 _2.178 $ 5.243 3.163 $ 5.230 CITY OF ARBORLAND Statement of Activities For the Year Ended December 31, 2020 (in thousands) Net (Expense) Revenue and Changes in Net Position Program Revenues Operating Grants and Contributions Charges for Services Capital Grants and Contributions Governmental Activities Business-type Activities Expenses Total S 99 168 Functions/Programs Governmental Activities: General government Judicial Public safety Health and sanitation Culture and recreation Road maintenance Interest on long-term debt Total governmental activities Business-type activities Total government S 5.716 1.926 7.958 2.804 2.166 2.455 948 23.973 2.895 $26.86S $ 531 716 1.530 524 554 5 S (5.185) (1.111) (6.260) (2.280) (1.117) (831) (948) (17,732) $495 $ (5.185) (1.111) (6,260) (2.280) (1.117) (831) _(948) (17.732) 2.330 _(15.402 1.619 1.556 495 3.560 5,218 $9.078 $ 2.330 2.330 $1.886 $502 _(17.732 General Revenues: Property taxes Grants and contributions not restricted to specific programs Investment earnings Special item-gain on sale of land Total general revenues and special items Change in net position Net position January 1 Net position December 31 17.296 2.190 716 100 20.302 2.570 12.204 $ 14.774 17.296 2,190 716 100 20.302 4.900 17.447 $ 22,347 2.330 5.243 $ 7.573 CITY OF ARBORLAND Statement of Activities For the Year Ended December 31, 2019 (in thousands) Net (Expense) Revenue and Changes in Net Position Program Revenues Operating Grants and Contributions Charges for Services Capital Grants and Contributions Governmental Activities Business-type Activities Expenses Total Functions/Programs Governmental Activities: General government Judicial Public safety Health and sanitation Culture and recreation Road maintenance Interest on long-term debt Total governmental activities Business-type activities Total government $ 148 209 1.943 147 322 S 17 30 $ 4.133 1,737 5,239 2.129 3.762 1,055 - 804 18.859 4.287 $23.146 $ (3,985) (1.511) (3,266) (1.982) (3.090) (554) (804) (15,192) S350 $ (3.985) (1.511) (3.266) (1.982) (3.090) (554) _(804) (15.192) 13 (15.179 501 11111111 548 2,769 4.290 $7,059 350 10 S360 S548 -(15.192) General Revenues: Property taxes Grants and contributions not restricted to specific programs Investment earnings Special item-gain on sale of land Total general revenues and special items Change in net position Net positionJanuary 1 Net position-December 31 13.619 3,664 916 200 18.399 3,207 8.997 $ 12.204 13.619 3.664 916 200 18.399 3.220 14.227 $ 17.447 13 5.230 $5.243 CITY OF ARBORLAND Statement of Activities For the Year Ended December 31, 2018 (in thousands) Net (Expense) Revenue and Changes in Net Position Program Revenues Operating Grants and Contributions Charges for Services Capital Grants and Contributions Governmental Activities Business-type Activities Expenses Total $ $ 3.922 1.601 4.113 57 $ 109 198 1.723 216 364 10 Functions/Programs Governmental Activities: General government Judicial Public safety Health and sanitation Culture and recreation Road maintenance Interest on long-term debt Total governmental activities Business-type activities Total government 2.096 S (3.813) (1.346) (2.380) (1.880) (2.800 (978) _(948) (14.145) S 320 $ (3.813) (1,346 (2.380) (1.580) (2.800) (978) _(948 (14.145) 1.091 _(13.054) 3.484 1.438 948 17.602 _2.637 $20.239 460 527 320 2.610 3.708 $6,318 $1.091 1.091 $ 527 $ 340 S(14.145) General Revenues: Property taxes Grants and contributions not restricted to specific programs Investment earnings Special item-gain on sale of land Total general revenues and special items Change in net position Net positionJanuary 1 Net positionDecember 31 13.100 2.990 681 150 16.921 2,776 6.221 $ 8.997 13.100 2.990 681 150 16.921 3.867 10.360 S 14.227 1.091 4.139 $ 5.230 ILLUSTRATION 10-4 Financial Indicators Using the CAFR Performance Measures Description Ratio Financial Position: 1. Unrestricted net position Unrestricted position Total revenue A measure of the adequacy of the amount of the government's total unrestricted net position or level of deficit at the measurement date.* A measure of the extent to which the government's total depreciable capital assets, on average are reaching the end of their useful lives, and therefore, may need replacement.* 2. Capital asset condition Accumulated depreciation Average cost of depreciable capital assets 3. Debt to assets A measure of the degree to which the government's total assets have been funded with debt as of the measurement date.* Total liabilities Total assets 4. Current ratio A measure of the government's ability to pay its short-term obligations as they become due. Current assets Current liabilities 5. Quick ratio A more conservative measure of the government's liquidity that focuses on unrestricted cash and cash equivalents. Unrestricted cash and cash equivalents Current liabilities Financial Performance: 6. Change in net position A measure of the change in the overall financial condition of the government that includes governmental and business-type activities (BTA) but not fiduciary activities or discretely presented component units. Total ending net position (governmental and BTA) - Total beginning net position Total beginning net position 7. Interperiod equity A measure of whether the government has lived within its means for the year. * Net revenues (gross revenues plus/minus the effect of internal transfers, special items and/or extraordinary items) Total expenses 8. BTA self-sufficiency A measure of the extent to which the government's business-type activities (BTA) are funded with current-year service charge revenues, rather than prior year resources or subsidies from other funds. BTA service charge revenues BTA total expenses Financial Capability: 9. Revenue dispersion A measure of the exposure to potential financial difficulties resulting from reliance on revenue sources beyond the direct control of the government. Charges for services Total revenue (excluding special or extraordinary items) 10. Bonded debt per capita A measure of the government's bonded debt burden on its taxpayers. General bonded debt Population 11. Available legal debt limit A measure of the government's capacity to issue general bonded debt. General bonded debt Legal debt limit 12. Property taxes per capita A measure of the government's property tax burden on its taxpayers. Property levy Population