Katy3613
Katy3613
29.07.2020 • 
Business

Presented below are the computed amounts of ratios for the Village of Riverside example appearing in the chapter. Required:
a. Using the financial statements provided in Illustrations 2-5 through 2-11, compute ratios for the City of Salem. Assume the population of Salem is 52,000 and the fair value of property totals $970 million.
b. For each ratio, indicate which of the two governments has a stronger financial position. (Round "Debt per Capita" answer to the nearest whole dollar and other answers to 2 decimal places.)
Village of Riverside City of Salem Stronger Ratio
(1) Financial Position (government-wide, governmental activities) 15%
(2) Financial Position (General Fund) 11%
(3) Quick Ratio (government-wide, governmental activities) 2.32
(4) Leverage (government-wide, primary government) 0.11
(5) Debt Service Coverage (enterprise funds) 2.7 times
(6) Debt Service to Total Expenditures (governmental fund-basis) 4%
(7) Debt per Capital (government-wide, primary government) $468
(8) Debt to Assessed Value of Property (government-wide, primary government) 4.68%

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