The City of Kelsey Case

The City of Kelsey is an urban-suburban community that is bordered by the Kelsey River. The city covers nearly 200 square miles and is home to around 600,000 residents. The City of Kelsey serves as the seat of the county government, which has created a thriving professional base. We have performed a full vertical and horizontal analysis as well as ratio calculations from the city's financial data. As the CEO for the city, we feel it is crucial for us to share our findings with you.

If the acid test ratio of an organization is less than one then it does not have enough current assets to meet its current liabilities. It is very important for cities to maintain a high ratio. The current ratio is computed by dividing current assets by current liabilities. 26,333,869/1,142,275 = 0.0433 Current ratio = 0.0433. Acid-test (quick) ratio is computed by dividing the sum of cash, short-term investments, and net receivables by current liabilities. The acid test quick ratio for the city of Kelsey is as follows: 448,324+34,309,667+43,991,294/3,061215=78,749,285/3,061215=25.72. Receivables turnover is computed by dividing net credit sales (net sales less cash sales) by the average net receivables. Receivables are as follows: 7,568,924/4,381,890=1.727. The inventory turnover is computed by dividing cost of goods sold by the average inventory. The inventory turnover is as follows: 2,568,047/100,127=25.647. The vertical analysis of the city of Kelsey can be described as remaining steady and stable. The horizontal analysis of Kelsey reflects a minimum decrease in productivity since the early 1900's.

Profitability ratios for the City of Kelsey included through the years have increased drastically due to the upgrades of the city and increasing in their growth population. With the financial structure and organization of the annual audits Kelsey shows an asset turn over in the year of 2004 to 2005 as being $130, 250,445.00. This asset amount includes the help of the retirement funds, general, and long term assets. The City of Kelsey has been able to get many grants through passing requirements for more assistance and funds to help with the city. The profit margin used to provide the description of cash available is the margin of undesignated margin of accounts. This account is in a margin which is used or reserved for the General, Special Revenue, Capital Projects funds. This margin grand totals to an amount of $36,505,888.00 in 2004 and in 2005 a total of $37,250,906.00. The returns on the assets were around $ 3 million in 2004 and $ 5 million in 2005. The stockholders equity return was just as high due to the understanding of no matter what the measurements come out to they always get there estimated percentage of funds agreed to.

The Debt to Total Assets ratio for the City of Kelsey was 93.5%. This ratio was calculated using the Total Debt of 37,500,000 divided by the Total Assets of 40,100,000. The Times Interest