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Measuring Financial Condition: A Study of U.S. States
Author(s) -
WANG XIAOHU,
DENNIS LYNDA,
TU YUAN SEN JEFF
Publication year - 2007
Publication title -
public budgeting and finance
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.694
H-Index - 30
eISSN - 1540-5850
pISSN - 0275-1100
DOI - 10.1111/j.1540-5850.2007.00872.x
Subject(s) - financial statement , measure (data warehouse) , government (linguistics) , finance , statement of changes in financial position , statement (logic) , business , financial statement analysis , financial analysis , accounting , financial ratio , cash , cash flow statement , accounting management , actuarial science , audit , computer science , accounting information system , data mining , political science , linguistics , philosophy , law
This study tests a measure of financial condition using government‐wide information as required under the new financial reporting model set forth in GASB Statement No. 34. The measure consists of four financial condition dimensions in cash, budget, long‐run and service‐level solvencies, and 11 financial condition indicators. Results show that the measure is relatively reliable and valid and that government‐wide information reported under the requirements of GASB Statement No. 34 provides a useful reporting framework to evaluate financial condition of a government. Additionally, financial condition among states varies greatly and there is much room for improvement.