ABSTRACT
Financial performance is an integral factor in Moody's credit analysis, often reflecting the degree to which the other primary credit factors—debt, administration and economy—are favorable or unfavorable for a given municipal issuer. Annual operating performance and resultant year-end financial position will reflect the strength of a municipality's management, the area's economic conditions, and debt practices employed. Furthermore, financial operations and performance are critical because, regardless of economic, spending, and taxing realities, a municipal government is expected both to remain solvent in order to meet the service demands of its constituents, and to balance its budget. Revenue-raising flexibility is an important component in determining how much financial control an issuer is able to exert. The Moody's analyst is particularly interested in the way revenue-raising authority is used. General fund operations are often a key focus in the analysis of general obligation debt, Moody's analysts are interested in the financial position of all funds, including special revenue funds and enterprise funds.
