Question
Presented below are the computed amounts of ratios for the Village of Riverside example appearing in the chapter. Required: Using the financial statements provided in
Presented below are the computed amounts of ratios for the Village of Riverside example appearing in the chapter.
Required:
- Using the financial statements provided in Illustrations 2-5 through 2-11, compute ratios for the City of Salem. Assume the population of Salem is 52,000 and the fair value of property totals $970 million.
- For each ratio, indicate which of the two governments has a stronger financial position. (Round Debt per Capita answer to the nearest whole dollar and other answers to 2 decimal places).
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| Village of Riverside | City of Salem | Stronger Ratio |
| (1) | Financial Position (government-wide, governmental activities) | 15% |
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| (2) | Financial Position (General Fund) | 11% |
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| (3) | Quick Ratio (government-wide, governmental activities) | 2.32 |
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| (4) | Leverage (government-wide, primary government) | 0.11 |
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| (5) | Debt Service Coverage (enterprise funds) | 2.7 times |
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| (6) | Debt Service to Total Expenditures (governmental fund-basis) | 4% |
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| (7) | Debt per Capital (government-wide, primary government) | $468 |
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| (8) | Debt to Assessed Value of Property (government-wide, primary government) | 4.68% |
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