Government of Nova Scotianovascotia.ca
gov.ns.caGovernment of Nova Scotia Nova Scotia, Canada
 
Municipal Affairs
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Indicator Definitions

Each indicator has a technical definition that describes how it was calculated. The definition explains the meaning of key terminology and what the indicator is measuring. It provides information to consider when interpreting the indicator results and other indicators that measure similar aspects of a municipality's performance.

Select an indicator to display the technical definition:

 

Liquidity  

Threshold

1 or more

Formula

Total short term operating assets ÷ Total short term liabilities

Technical Definition

Total short term operating assets: Total short-term assets of the general operating fund, including cash and equivalents, receivables (net of valuation allowances), investments, loans, advances, inventory held for resale, other financial assets and inventory not held for resale

• For March 31, 2012 year: Only total short-term assets of the general operating fund. FIR Schedule D - Lines 1031000, 1032000, 1032090, 1033000, 1034000, 1037200, 1037210, 1057210 less due from own funds and agencies (financial statements)

• For March 31, 2013 and 2014 years: Only total short-term assets of the general operating fund. FIR Schedule D - Lines 1031000, 1032000, 1032090, 1033000, 1034000, 1037200, 1037210, 1057210 and 1057300 less due from own funds and agencies (financial statements)

• For March 31, 2015 year: FIR Schedule D – Lines 1031000, 1032000, 1032090, 1032095, 1037200, 1037210, 1057210, 1057300 less due from operating reserve fund (financial statements) and FIR Schedule S, General Operating Reserve Column B – Lines 5031000, 5032000, and 5037200 less due from operating fund (financial statements)

Total short term operating liabilities: Total short-term liabilities of the general operating fund including bank indebtedness, short-term borrowings, payables, other liabilities-short term

• For March 31, 2012: Only total short-term liabilities of the general operating fund. FIR Schedule D - 1041000, 1042000 and 1044000 less due to own funds and agencies (financial statements)

• For March 31, 2013 and 2014 years: Only total short-term liabilities of the general operating fund. FIR Schedule D - Lines 1040500, 1041000, 1042000 and 1044000 less due to own funds and agencies (financial statements)

• For March 31, 2015 year: FIR Schedule D – Lines 1040500,1041000, 1042000, 1043000, 1044000 less due to operating reserve fund (financial statements) and FIR Schedule S, General Operating Reserve Column B – Lines 5042000, 5044000, and 5044005 less due to operating fund (financial statements)

Rationale

Liquidity is a key short term financial performance score. Low liquidity scores can indicate a cash flow problem, and may indicate concern in other areas such as revenue collection.

Interpretations

A liquidity score below 1.0 indicates that the municipality has less cash and assets that are easily converted to cash on hand than the amount required to pay current obligations.

A municipality with an exceptionally high liquidity score may be better served by investing in instruments that will earn interest revenue. Liquidity varies with the day-to-day operations of a municipality, and is reported based on the last day of the fiscal year. This point is just prior to the next year’s tax levy, so cash on hand is likely to be at its lowest point. As a result, the liquidity score is likely conservative compared to other times throughout the fiscal year.

Data Source(s)

  • Municipal Financial Information Return (FIR) - General Operating Fund (non-consolidated)
  • Municipal Financial Information Return (FIR) - Operating Reserve Fund (non-consolidated)

Related Indicator(s)

  • Uncollected Taxes
  • Budgeted Expenditures Accuracy
  • Operating Reserves