Financial Condition Of The City Of Yonkers

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This paper will examine the financial condition of the City of Yonkers, New York as reported in the City’s year-end financial statement for the fiscal year concluding on June 30, 2014. Overall, the City of Yonkers appears to be a vibrant city that is in solid financial condition. The 2014 financial statement was accompanied by an “unqualified” opinion from the City’s auditors, reflecting that the financial statement is sound and without any material misstatements. However, the City’s 2014 financial statement does indicate that there may be some trouble spots that raise a red flag. These “red flag issues” could be the result of on-going negative financial trends or they could merely be isolated, non-recurring events which only occurred…show more content…
A negative number for each of these ratios means that the overall financial position for the City has decreased. The decrease was more significant for primary governmental activities than for total governmental activities, which mean the financial condition of the City, as a whole, is not completely ruined. The second ratio is the financial performance ratio. For fiscal year 2014, the primary governmental activities ratio was -0.17 and the total governmental activities ratio was -0.71. The financial performance ratio demonstrates the level of reserves that a municipality may draw on to meet future needs. When a municipality experiences a negative financial performance ratio, it may reflect a decrease in unrestricted net assets, which might result in an inability to meet future financial needs. However, for fiscal year 2014, the total fund balance for the City of Yonkers in both primary governmental activities accounts and total governmental activities accounts was positive. The City thus seems likely to meet future financial needs despite current negative financial performance ratios. The third ratio is the liquidity ratio, which compares current assets against current liabilities. This ratio looks at a municipality’s ability to pay its outstanding obligations with its current assets. For fiscal year 2014, the City’s primary governmental activities ratio was 1.57 and
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