Government-Wide Ratios

If you only read one thing Government-wide ratios fall into three categories: financial position, financial performance, and financial capability/efficiency, using the full-accrual data Topic 4’s fund ratios don’t capture.

Builds on Topic 4 Fund ratios show the short-term, modified-accrual picture. These ratios add the full-accrual view, capital assets, long-term debt, and all.

Why This Matters

A district can look completely fine on fund-level ratios while its government-wide position, capital assets, long-term debt, pension liabilities, tells a very different story. These ratios are how you’d catch that.

What’s Actually Going On

Financial position ratios include unrestricted net position (relative to total revenue, a measure of adequacy or deficit), the debt ratio (total liabilities ÷ total assets, how much of the government is funded by debt), and the current ratio (current assets ÷ current liabilities, with 1.0 a common benchmark).

Financial performance ratios include change in net position (the year’s shift, governmental and business-type activities combined) and interperiod equity, whether the government lived within its means, a ratio below 1.0 means current revenues fell short of covering current expenses.

Financial capability and efficiency ratios include measures like business-type activity self-sufficiency, whether enterprise activities are actually covering their own costs through current-year fees rather than relying on subsidies or prior-year resources.

How This Applies

Interperiod equity is worth flagging specifically, a ratio consistently below 1.0 means the district is spending down its own future capacity, not just having one tight year.