Financial Management Performance Indicators

Financial Management Performance Indicators

This document sets out the indicators used by the Authority to measure key elements of the financial management and financial standing of the County Council. As appropriate, these will be monitored and reported to Members in June/July, October/November and February.

These indicators supplement information presented to members on the key financial processes of budget and capital monitoring, budget setting and outturn reporting.

Budget and Capital Programme

Aim of Indicator Indicator Target

Accuracy of budet Budget divided by outturn 98.5%
Delivery of capital programme November budget forecast divided by outturn 99.3%
Accuracy of capital monitoring Capital programme resources divided by the third review forecast 95%


Aim of Indicator Indicator Target

Speed with which invoices are paid Percentage of undisputed invoices for commercial goods and services that were paid within 30 days 92%
Effectiveness of debt recovery Percentage of debt (excluding social services) more than 42 days old divided by total debt 3.5%
Percentage of residential care debt (excluding secured debt) more than 42 days old divided by total debt 4.3%
Percentage of home care debt more than 42 days old divided by total debt 3.9%


Aim of Indicator Indicator Target

Effectiveness of the payroll service Percentage of deadlines met 100%

Internal Audit

Aim of Indicator Indicator Target

Measure performance against plan Number of planned audits undertaken divided by the number in the plan 90%

Other Indicators

Members will continue to receive information on the prudential borrowing and treasury management indicators. They will also receive information relating to the funding level of the pension fund. This will be used as a tool for medium term financial planning as it will give an indication of future contribution rates.


Ratio Analysis / Financial Performance Indicators (FPI):

Ratio analysis is one of the tools used by financial analysts for making decisions regarding credit and investments. This method utilizes the data found in financial statements to determine a company's standing. Analysts will compare the company's ratios to its past performance, as well as to industry statistics to determine risks, trends, and to identify any peculiarities. This analytical tool facilitates inter-company as well as intra-company comparisons.
These ratios or financial performance indicators (FPI) can be divided into three main groups: profitability (operating) ratios, which gauge a company's operating success over a given period of time; liquidity ratios, which measure the short-term ability of a company to pay its debts and to meet unexpected cash needs; and solvency ratios, which indicate a company's ability to meet long-term commitments on a continuing basis.
Significant FPIs vary depending on the line of business; however, here is an example of common FPIs published by Dun & Bradstreet:
Current assets to current debt
Net profits on net sales
Net profits on tangible net worth
Net profits on net working capital
Net sales to tangible net worth
Collection period
Net sales to inventory
Fixed assets to tangible net worth
Total debt to tangible net worth
Inventory to net working capital
Current debt to inventory
Funded debt to net working capital

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