# Assessing Financial Condition

Topic: Assessing Financial Condition
In this Assignment, you evaluate the financial condition of a hypothetical town by considering trends and what they could mean. Review this week�s Learning Resources. Think about how public organizations can use data from audits and assessments to increase their effectiveness.
Consider the following:
Centerville is a hypothetical town that provides the context for this Assignment. What follows is a table that presents five years of data.
Use the five-year-trend data in the table to evaluate whether Centerville’s (C) revenue and expenditures are balanced. In summarizing Centerville’s financial situation over a five-year period, the table includes five factors: amount of revenue that the city is gaining per household, the percentage of total revenue contributed by sales tax, how much the city is spending per household, and the percentage of the city’s households that are exempt from paying sales tax.
Note that the city is gaining less per year from each household; however, with the exception of Year 5, it is spending more per year for services per household. Look at sales tax in the city, which is a main source of revenue. (Note: Convert the decimals in the �Sales tax as a percentage of total revenue� row. Remember that you multiply the decimal figure by 100 to derive the percentage. Multiplying .928 by 100 equals 92.8%, .926 by 100 equals 92.6%, .925 by 100 equals 92.5%, .923 by 100 equals 92.5%.)
What is happening to sales tax as a percentage of revenue? Look at the percentage of the city’s households that are exempt from paying sales tax row. What is happening to the percentage of sales-tax-exempt households over the five-year period?
Revenue per household year (1)\$321 yr (2)\$318 yr (3)\$329 yr (4)\$329 yr (5)\$328
Sales tax as a percent of total revenue yr(1).938 yr(2).936 yr(3) .935 yr(4) .935 yr(5) .933
Expenditures per household yr(1)\$321 yr(2) \$321 yr(3)\$333 yr(4) \$334 yr(5)\$334