Determine whether the following situations are negative indicators of the financial health of a government unit. There are given some negative and positive; Explaining why?

A. Cash and investments divided by current liabilities ratio is decreasing over several years. This is a negative indicator

B. Current liabilities divided by total revenue ratio is decreasing. No, positive indicator

C. Fixed costs divided by total expenditures ratio is increasing.

D. Real property taxes receivables divided by real property tax revenue ratio is increasing over time.

E. Debt services expenditures as a percentage of revenues are greater than 25 percent.

F. Debt service expenditures divided by gross expenditures ratio is decreasing overtime. No

G. The debt service expenditures as a percentage of revenues are 25 percent or larger. Yes

H. A fund balance is greater than 10 percent of revenues. No

I. Unreserved fund balance divided by gross expenditures ratio is decreasing over time. Yes

J. Long term debt divided by population ratio is decreasing over time. No

K. Tax levy divided by tax limit ratio is decreasing over time. No

Answer rating: 100% (QA)

A Its a negative indicator as cash and investments indicates our assets so as the ratio of cash and ... View the full answer