Measuring Financial Condition: A Study of U.S. States

21 Pages Posted: 11 May 2007  

Xiaohu Wang

University of Central Florida - Department of Public Administration

Lynda Dennis

University of Central Florida - School of Accounting

Yuan Sen (Jeff) Tu

University of Central Florida

Abstract

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.

Suggested Citation

Wang, Xiaohu and Dennis, Lynda and Tu, Yuan Sen (Jeff), Measuring Financial Condition: A Study of U.S. States. Public Budgeting & Finance, Vol. 27, No. 2, pp. 1-21, Summer 2007. Available at SSRN: https://ssrn.com/abstract=985696 or http://dx.doi.org/10.1111/j.1540-5850.2007.00872.x

Xiaohu Wang (Contact Author)

University of Central Florida - Department of Public Administration ( email )

4000 Central Florida Blvd
Orlando, FL 32816-1400
United States

Lynda Dennis

University of Central Florida - School of Accounting ( email )

4000 Central Florida Blvd
Orlando, FL 32816-1400
United States

Yuan Sen (Jeff) Tu

University of Central Florida

4000 Central Florida Blvd
Orlando, FL 32816-1400
United States

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