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Annual Financial Report Fiscal andTerm Paper

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[. . .] This situation however creates imbalances as funds are taken away from their initial purposes, namely the public sector services, such as education or medical care (Vantage FX, 2010).

The Piqua City School District in Ohio has constructed and forwarded its comprehensive annual financial reports and these sit at the basis of the analysis regarding the community's stability. After a general look at the statements in the CAFR, the following conclusions have bee drawn:

The community is financially stable and able to engage in investment projects

The community is reliant on the governmental funds, but it is also able to generate revenues through other activities, such as investment projects or extracurricular activities.

In order to ensure the validity of the finings, it is also necessary to compute and analyze several financial rations, as follows:

a) Current ratio = current assets / current liabilities = (645,772 + 9,052 + 654,824 + 1,013,524) / (134,159 + 134,159) = 2,323,172 / 268,318 = 8.66

This is a high value of the current ratio, indicating that the community owns an increased level of liquidity. Subsequently, it would be able to honor its payments, especially the short-term ones, as it possesses sufficient liquidities. In the case of a private institution, this would mean that the firm generates trust from investors. In the case of a public entity however, it indicates financial strength and stability.

b) Return on assets = net income / total assets = (2,443,821 + 51,897 + 3,215 + 2,498,993) / (996,812 + 223,266 + 54,826 + 1,274,904) = 4,997,926 / 2,549,808 = 1.96

The positive return on assets indicates that the Piqua School District of Ohio is able to use its assets to generate revenues. In the context of a private firm, this value would be desired as higher. Nevertheless, in the context of a public community, it indicates innovation and an ability to generate other funds than those received from the United States government.

These two values point out to an increased level of financial stability at the Piqua School District of Ohio. In the case of private agencies, more ratios would be computed, such as dividend policy ratios or financial leverage ratios. These are however computed with the aid of debt values, as well as equity values -- none of which are present in the operations, and as such in the comprehensive annual financial reports, of the analyzed community.

In terms of the budget for the following fiscal year, special consideration is due to a series of issues, such as objectives, applicable approaches or procedures. At the level of the objectives, the Piqua City School District of Ohio strives to reduce its levels of financial dependence on the state budgets. The applicable procedure to attaining this objective is that of placing more emphasis on the activities which generate funds.

In this order of ideas, investment projects would be considered and engaged. Some examples of procedures in this sense would be constituted by the following investment propositions:

Enlargement of the school premises in order to be able to host more pupils

Improvement of the technical equipments as well as improvement of the overall educational act in order to attract more pupils, as well as public attention

Development of the school's sports teams and facilities in order to attract and host other non-school related sports competition

Promotion of the school's efforts and needs in the local media in order to attract sponsorships from both the parents of the pupils in the school, as well as from wealthy members of the community. This effort would be supported with financial gains by explaining the prospective sponsors that they would be able to deduct their sponsorships from the taxes they owe to the American state.

Ultimately however, in order to ensure that the chances of success for these endeavors are maximized, it is necessary to correlate them with efforts of social marketing, though which awareness is raised and more individuals and groups are motivated to contribute to increasing the school's funds.

References:

Farina, F., Tamborini, R., 2007, Macroeconomic policy in the European Monetary Union: from the old to the new stability and growth pact, Routledge

Gauthier, S.J., 2005, Governmental accounting, auditing and financial reporting, Government Finance Officers Association

Guell, R., 2008, Issues in economics today, 4th edition, The McGraw Hill Companies

Wilson, E.R., Reck, J.L., Kattellus, S.C., 2007, Accounting for governmental and nonprofit entities,… [END OF PREVIEW]

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