Part II : Additional Analysis of the CAFR

An article by Chancy, Mead and Schermann (2002) summarizes six government-wide ratios to measure fiscal distress and related financial risk factors of municipalities. One ratio provides an overall measure of financial position for the government. Two ratios provide measures of financial performance. A fourth ratio provides a measure of liquidity. Two final ratios provide measures of solvency. These ratios in comparison to the ratios measured for similar governments, combined with other useful information, provide a starting point for evaluating the overall financial condition of a governmental entity.

Calculate the risk ratios for YOUR STATE for 2019, and answer

Financial Ratios Measures of: Financial Position Financial Performance Calculation: Unrestricted Net Assets Expenses Change in Net Assets Total Net Assets General Revenues + Transfers Expenses Cash + Current Investments + Receivables Current Liabilities Long-term Debt Assets Change in Net Assets + Interest Expense Interest Expense Liquidity Solvency: Financial Ratios Measures of: Financial Position Financial Performance Calculation: Unrestricted Net Assets Expenses Change in Net Assets Total Net Assets General Revenues + Transfers Expenses Cash + Current Investments + Receivables Current Liabilities Long-term Debt Assets Change in Net Assets + Interest Expense Interest Expense Liquidity Solvency