HORSHAM RURAL CITY COUNCIL


NOTES TO THE FINANCIAL REPORT (Cont.) FOR THE YEAR ENDED 30th JUNE, 2012


39 FINANCIAL RATIOS 2012 a) Debt servicing ratio


To identify the capacity of Council to service its outstanding debt Debt servicing costs


Total revenue


Debt servicing costs refer to the payment of interest on loan borrowings, finance lease and bank overdraft. The ratio expresses the amount of interest paid as a percentage of Council's total revenue.


b) Debt commitment ratio To identify Council's debt redemption strategy


Debt servicing and redemption costs Rate revenue


The ratio expresses the percentage of rate revenue utilised to pay interest and redeem debt principal.


c) Revenue ratio


To identify a Council's dependence on non-rate income Rate revenue


Total revenue


The level of Council's reliance on rate revenue is determined by assessing rate revenue as a proportion of the total revenue of Council.


30.39% 15,923,635 30.42% 39.35% 14,545,835 13,213,442 52,405,668 47,817,864 33,580,455 5.75% 915,306 5.43% 789,425 6.11% 807,999 15,923,635 14,545,835 13,213,442 0.55% 289,356 2011 0.52% 250,311 2010 0.77% 259,743 52,405,668 47,817,864 33,580,455


Page 54


116 Horsham Annual Report 2011 - 2012


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