HORSHAM RURAL CITY COUNCIL


NOTES TO THE FINANCIAL STATEMENTS (Cont.) FOR THE YEAR ENDED 30th JUNE, 2014


39 FINANCIAL RATIOS (PERFORMANCE INDICATORS) 2014 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 strategy involves the payment of loan principal and interest, finance lease principal and interest. 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.


42.07%


18,528 44,045


33.09%


17,260 52,162


30.39%


15,924 52,406


5.57% 1,032 18,528 6.03% 1,040 17,260 4.95% 789 15,924 2013 0.58% 303 52,162 2012


------------------- -------------------- ------------------ 0.58%


0.55% 255 44,045 289 52,406


Annual Report 2013-2014 q Page 61


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