Analysis of Public Administrations Using Financial Indicators
Bernardino Benito López
Isabel Martínez Conesa
The special characteristics of the activities undertaken by the Public Administrations make worth the analysis of the informative contents of their annual accounts, judging the coherence and utility of certain ratios traditionally used when analysing enterprises. In this context, we analyse the financial indicators proposed by the doctrine, Public Administrations, and the external users (rating agencies), proposing whenever possible alternative ones included those that can serve as early alert indicators. We conclude that the indicators obtained using the budget are much more useful when judging the financial situation of the entity than those traditionally based on the estate balance, although the first ones must be interpreting bearing in mind other magnitudes such as the cash surplus statement or the debt statement. In any case, we believe that the worthiness of the analysis to be used must be demonstrated empirically, which is of course a logical outcome in this paper.
financial statements analysis, public sector accounting.
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