Response to the following problem:
Assume you are an analyst charged with the responsibility of advising investors regarding the general obligation and revenue bonds of 10 cities. You have Comprehensive Annual Financial Reports for the 10 cities, and each report has received a Certificate of Achievement for Excellence in Financial Reporting from the Government Finance Officers Association.
You have decided to investigate the following ratios:
(1) Net debt per capita.
(2) Net debt to fair value of property.
(3) Net debt to assets.
(4) Debt service to total expenditures-General and debt service funds.
(5) Net assets/expenses.
(6) Unrestricted net assets/expenses.
(7) Unreserved fund balance/revenues-General Fund.
(8) Governmental revenues per capita.
(9) Interest coverage-revenue bonds.
(10) Operating ratio-enterprise funds.
Required:
a. Indicate precisely where in the CAFR you would find data needed to compute each of the ratios. Be specific.
b. Indicate briefly the purpose of each of the ratios. What would you learn from the numbers calculated?