What are the 3 Financial Ratios?
Leverage - ability to pay its obligations
Effectiveness- effective way to utilize its assets
Profitable - success in generating profit
What is “break-even”?
The annual cost for providing, operating, maintaining, and administering an airport facility
What are the 4 budget cycles?
1) budget preparation by executive agency (Airport exec, city manager, etc.)
2) budget is submitted to the legislative body (i.e. Commission, board, airline MII, etc.) for approval
3) execution/expenditure
4) audit
What are the budgeting techniques?
1) Line-item - divided into specific purposes; least flexibility for Airport Exec
2) Performance Based Budget - what it’s trying to accomplish, how much it’s planning and what resources
3) Program Budgeting - divides expenditures by activities
4) Zero-based budgeting - starts from zero base
What is a variance report?
Budget tracking tool
Program Budgeting is…
Divides expenditures by activities
Most potential for policy makers to review the implications of spending
Zero bases budgeting is…
Associating service levels in each program with cost and prioritizing all options
Performance based budget is…
What each administrative unit is trying to accomplish
Line item budget is…
List each Dept and assigns money
Least amount of flexibility
When is an airport required to report finances to FAA?
Commercial airports enplaning 2500 or more file form of Financial Governmental Payment Report and Operating Financial Summary
