EFC Resources: Financial Health Checkup for Water Utilities

Financial Health Checkup for Water Utilities

Subject: Financial Data
Program: Drinking Water and Wastewater
Tool type: Calculator
Date: 02/19/2016
Version: 1.2
File: Click to download (requires registration)   (MS Excel)

Use this tool to assess the financial performance of your water (and/or wastewater) utility fund. Financial data readily available in annual financial statements are copied into this tool, which computes key financial indicators that measure a variety of important metrics, such as the ability to pay debt service, availability of cash to pay for operations and maintenance, the sufficiency of revenues generated, etc. Each indicator is explained in lay terms, and you can set targets for each metric in order to compare your fund's actual performance against the goals that you (or your governing body) sets. The tool demonstrates the financial strengths and weaknesses of the utility fund in the past 5 years. 

The tool is free to download and use. It is designed to be used by utility professionals, governing body members, government staff, and technical assistance providers working with (small) water systems.

 

How to use the tool:

Have copies of your last five audited annual financial statements in hand. Then follow the built-in instructions to copy specific numbers from your financial statements into this tool. Change the proposed targets for each of the six financial indicators, and then review your fund's performance (in the past five years) against your targets. Input data in the dark green cells. Results are presented in easy-to-read graphs and images.

 

Watch a recorded webinar demonstration of how to use this tool, and explanations of its key financial indicators:

View full screen

 

View a whiteboard video explaining key financial indicators for water in lay terms:

 

View full screen

 

Free assistance to small water systems in using this tool and interpreting the results:

Water systems serving up to 10,000 people (about 4,000 accounts) are invited to contact us to schedule a time for the Environmental Finance Center to assist in using this tool to assess the water system's fund performance in recent years. The EFC will help populate the tool, go over how to use the tool, review the results and have a discussion about what the water system can or should do going forward to strengthen the financial performance of the water fund. This could lead to further discussions and direct assistance for small water systems, free of charge to the systems, thanks to funding from the U.S. EPA to the Environmental Finance Center Network for its Smart Management for Small Water Systems project.  

 

 

What's new in version 1.2?

Link to the video changed and minor formatting changes.

 

What's new in version 1.1?

A new logo and minor formatting changes.

 

Project page: Smart Management for Small Water Systems

benchmarking, financial indicators, financial performance