Financial position

Our financial management is sound

Our financial position is sound

Most of our assets and liabilities are of a financial rather than physical nature, as we do not own major buildings or machinery.

We report a net liability position as a result of the actuarial losses on the defined benefit superannuation schemes. While we have a net liability position, we are a going concern as we have a sustainable level of cash with positive cashflows.

Cash remains our largest asset with $11 million at 30 June 2016. The increased cash balance was primarily due to the efficiency of our new practice management system by e-mailing client invoices, an improved focus on our collection of receivables and reduced capital investment in 2015–16.

Our assets include $7 million for the Crown’s assumption of the liability for our staff’s long service leave entitlements. This offsets the liability in our accounts. We also have $5 million in receivables from government agencies for our auditing services.

Our liabilities at 30 June 2016 were $73 million, increased from $53 million in the previous year. This is due to an increase in superannuation liabilities to $61 million, from $41 million in 2015.

 

The year ahead

In 2016–17, we will be driven by our ‘People and Culture’ and ‘Finances’ strategic goal areas to:

  • use our new performance management framework to reinforce the financial responsibilities of all staff
  • improve our efficiency and productivity by making financial management information available to all levels in the business via a self-service reporting tool
  • design a future-focused resource and capital planning model.

Effective solvency, debtor management needs to improve

Our current ratio at 30 June 2016 shows we had $2.10 in current assets to meet every $1.00 of our current liabilities. This is an increase on the previous year’s ratio and still at the upper level of our target range of between $1.00 and $2.00.

Some of our debtors continue to take longer to pay than our agreed invoice terms of 14 days. In 2015–16, it took us an average of 40 days from invoice to collection which is an improvement from 2014–15 of 44 days.

 

Solvency – current ratio
2012

 

2013

 

2014

 

2015

 

2016

 

2017 TARGET

 

Debtor management - average days to collect
2012

 

2013

 

2014

 

2015

 

2016

 

2017 TARGET

 

Timely creditor payments

 

During the year we paid 99 per cent of our creditors on time. We are expected to pay all creditors within 30 days, unless contracts state otherwise.

For more detail on our performance with creditor payments, see Appendix Seven.

Work in progress – at 30 June 2016
2012

 

2013

 

2014

 

2015

 

2016

 

2017 TARGET