A Comparison of Financial Indicators: The Case of Detroit

Abstract

Financial condition analysis is a critical task for public managers, but it is still unclear which indicators are the most salient measures of financial well‐being. The financial health of Detroit, Michigan is unequivocally poor, providing an interesting case to evaluate the financial condition indicators that currently exist. We calculate the key financial indicators using data from Detroit over the last 11 years. We find the indicators fall into three groups: those that show no sign of impending financial crisis, those that show a steady worsening financial condition, and those that demonstrate a substantial change immediately prior to filing bankruptcy.

Geographic Disparities in Access to Nursing Home Services: Assessing Fiscal Stress and Quality of Care

“…This may lead to a bias because different financial performance indicators measure slightly different dimensions of fiscal health (Stone et al. ). Third, the operating ratios are operationalized as operating revenues relative to operating costs, and thus are determined by both measures.…”

“…It is calculated as the operating revenue divided by the operating expenses, with financially secure organizations having higher operating ratio values (Wang, Dennis, and Tu ; Stone et al. ). If operating ratios are smaller than 1, the nursing homes’ revenues do not cover its operating expenses, related to its main activities.…”

Constrained or creative? Changes in financial condition and entrepreneurial orientation in public organizations

“…Absorbed resources reflect long‐term financial condition and unabsorbed resources reflect short‐to‐medium‐term financial condition. Following Stone et al (), we identify two measures of financial condition to capture Unabsorbed Resources and Absorbed Resources : the operating ratio and the net asset ratio. The data to construct these ratios come from the GovRank project (United States Common Sense ), which collected government‐wide financial data from CAFR in the years 2008 to 2014.…”

The Fiscal Savings Behavior of Pennsylvania School Districts Through the Great Recession

“…According to Duncombe and Hou (2014, 11), “prudent financial management would suggest that small, poor districts should maintain relatively high balances, because they have the least capacity to weather a fiscal shock.” Extending this argument, school districts in poor fiscal health should retain high savings as a safety mechanism. While no agreement exists upon which indicators best capture a government's financial condition (Stone et al ), we used the BMI in our study—an index of fiscal health developed exclusively for Pennsylvania school districts by Bruck and Miltenberger ().…”