City of Melbourne Annual Report 2007/08

Note 23. Financial ratios
	Consolidated				Council
	2009		2008	2007	2009		2008	2007
a) Debt Servicing Ratio
Debt servicing cost	670	0.15%	0	0	0	0	0	0
Total revenue	434,939				325,024
To identify the capacity of the Council to service its outstanding debt.
Council's ability to meet it's Debt servicing cost is extremely strong. When rounded the ratio of revenue to debt is less than 0.15%

b) Debt Commitment Ratio
Debt servicing and redemption costs	7,500	4%	0	0	0	0	0	0
Rate revenue	170,541				170,541
To identify Council's debt redemption strategy.
Council's ability to meet it's Debt commitment is extremely strong. When rounded the ratio of rate revenue to debt is less than 0.4%

c) Revenue Ratio
Rate revenue	170,541	39%	37%	38%	170,541	52%	50%	52%
Total revenue	434,939				325,024
To identify Council's dependence on rates.

d) Debt Exposure Ratio
Total indebtedness	109,957	4%	4%	4%	72,759	3%	3%	3%
Total realisable assets	2,932,667				2,868,581
To identify Council's exposure to debt.
4 per cent of realisable assets is required to cover debt in 2008.

e) Working Capital Ratio
Current assets	167,426	209%	241%	423%	143,729	231%	283%	534%
Current liabilities	80,043				62,254


Definitions
To assess Council's ability to meet current commitments. For every dollar of current liabilities, Council has $2.31 of current assets as at 30 June 2009.
Current assets	Total current assets as shown in the balance sheet.
Current liabilities	Total current liabilities as shown in the balance sheet.
Debt redemption	Includes the principal component of repayments on loans and financial leases and capital items purchased on vendor terms.
Debt servicing costs	Includes interest and charges on loans, overdrafts and interest on payments for capital items purchased on vendor terms.
Rate revenue	Includes revenue from general rates, municipal charges, special rates, special charges, service rates and service charges.
Total indebtedness	Total liabilities, both current and non-current, as shown in the balance sheet.
Total realisable assets	Total current assets and total realisable non-current assets.
Total revenue	Total revenue as shown in the income statement.