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8.0 Financial Strategy <br /> <br />8.1 Introduction <br />This financial strategy presents MWMC's current financial status and policies, future <br />financial needs, and discusses the strategy for meeting these needs. <br /> <br />8.2 Current Financial Status and Policies <br />Financial Status - In 2003, MWMC adopted an update o£ its financial plan. A financ'ml <br />consultant performed a review of MWMC's financial stattrs as part of the plan update. The <br />consultant used a variety of financial ratios to quantify MWMC's £mancial soundness. <br />Examples of these financial ratios are: <br /> <br /> Operating ratio: Operating and maintenance expenses, divided by the total operating <br /> expenses, <br /> <br /> Net take-down ratio: Net revenues~ divided by gross revenue a_nd income, <br /> <br /> Interest coverage ratio: Net revenues, divided by interest requirements for the period, <br /> <br /> Debt service coverage ratio: Net revenues, divided by principal and interest <br /> requirements £or the period, and <br /> <br /> Debt service safety margin ratio: Net revenues, less principal and interest requirements <br /> for the period, divided by gross revenue and income. <br /> <br />On the basis of this analysis, the consultant found: <br /> <br /> MWMC is posit~oned well finandally. <br /> <br /> MWMC's current financial situation, with zero long-term debt, and the 10-year future <br /> debt-financing scenario result in performance on the quantitative measures that exceeds <br /> (in a good sense) the national medians and the financing industry~s guidelines (The <br /> consults review was based on a 10-year future debt-£mancing scenario). <br /> <br />· Qualitative measures assessed indicate that MWMC is in a strong pom'tion with respect <br /> to its credit-worthiness. <br /> <br /> MWMC's sound financial management, long-term financial forecasting and planning, <br /> stable operations and a host of other qualitative indicators all indicate that MWMC <br /> would perform extremely well in any assessment by a credit rating agency or other <br /> financial body. <br /> <br /> Financlal Management PoIicies - MWMC Financial Policies are grouped into the following <br /> categories: <br /> <br /> · Financial Forecasting and Budgeting <br /> <br /> MWMC_8.0_REV5 DOC 8.1 <br /> <br /> <br />