Public Audit Act, 2004 (Act No. 25 of 2004)

Memorandum of Agreement (2020)

Annexure A

B. Criteria: Financial Performance Indicators

B.8. Creditors' percentage over cash resources ratio
Purchase cart Previous page Return to chapter overview

 

Description:

This indicator assesses whether auditee has sufficient cash resources available to meet its short-term liabilities, i.e. current creditors.

 

Calculation

The creditors' percentage over cash resources ratio is calculated by dividing the amount of cash resources by current liabilities as indicated in the auditee's statement of financial position.

 

Score

Rating

Score 3

Creditors more than 75% of total cash

Score 2

Creditors between 50% and 75% of total cash

Score 1

Creditors is 49% or less