U.S.

Charter School Ratings Continued

To Slip As 2013 Medians Sent Mixed
Signals
Primary Credit Analyst:
Carlotta R Mills, San Francisco (1) 415-371-5020; carlotta.mills@standardandpoors.com
Secondary Contact:
Avani K Parikh, New York (1) 212-438-1133; avani.parikh@standardandpoors.com
Research Contributors:
Phillip A Pena, San Francisco (415) 371-5039; phillip.pena@standardandpoors.com
Duncan Manning, San Francisco (1) 415-371-5088; duncan.manning@standardandpoors.com
Ruchika Radhakrishnan, CRISIL Global Analytical Center, an S&P affiliate, Mumbai
Alisha Sukhija, CRISIL Global Analytical Center, an S&P affiliate, Mumbai
Binkhal Gandhi, CRISIL Global Analytical Center, an S&P affiliate, Mumbai
Kartik Mani, CRISIL Global Analytical Center, an S&P affiliate, Mumbai
Table Of Contents
A Snapshot Of Charter Schools' Median Performance Ratios
Related Criteria And Research
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2013 Medians Sent Mixed Signals
The number of charter schools that Standard & Poor's Ratings Services rates has continued to grow since our last
report on the sector's median performance ratios (see "Charter School Medians Reflect Operating Pressures In A
Growing Sector," published June 27, 2013). Most of the growth has been in the 'BB' category ('BB+', 'BB', and 'BB-'), as
it was in the previous year, and we've downgraded a number of schools to speculative-grade as well. We believe this
increase at the lower end of our rating scale reflects the culmination of years of per-pupil funding cuts and the resulting
pressure on schools' operations, along with increased competition in some markets. In addition, schools are entering
the capital markets and requesting ratings earlier in their lifecycles.
For these reasons, we anticipate that ratings will continue to move to the lower end of our rating spectrum, and our
outlook on the sector remains negative overall (see "The U.S. Charter School Outlook Is Still Negative in 2014,"
published Feb. 24, 2014 on RatingsDirect). Of our 214 public charter school ratings, currently, 41 (19%) have negative
outlooks while only 5 (2%) are positive. Although funding may be beginning to stabilize in many states, it generally
hasn't returned to pre-recessionary levels, and some schools are struggling to operate in this "new normal."
Overview
Funding is increasing for charter schools in some states, but many are still struggling from the Great Recession
fallout.
More schools are beginning to issue debt (and request ratings) earlier in their life cycle.
The portion of charter school ratings at the lower end of the range for this sector continues to rise.
The sector's medians showed mixed results with weakening financials but increased cash and demand across
most rating categories.
As of June 16, 2014, we rated 214 charter schools publicly, including 28 new charter schools since the data reported in
our last median report. We rate schools in 22 states and Washington, D.C. Our ratings are concentrated in four states:
Michigan (30), Colorado (25), Texas (25), and Pennsylvania (21).
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Chart 1
We newly rated schools in more than 10 states since our last report. Not surprisingly, one of the two states with the
most ratings growth has a new guarantee program, through which qualifying schools with an investment-grade
Standard & Poor's underlying rating (SPUR) may receive an enhanced rating based on the state's credit enhancement
program. Under Utah's moral obligation program, initiated in 2013, schools may qualify for an enhanced 'AA' rating.
We assigned five new ratings to charter schools in Utah since the last median report. The unenhanced SPUR on these
schools mirrors the ratings and trends we see elsewhere in the sector. Texas also has a new enhancement program,
and Colorado's has existed for quite a while. We also newly rated six schools in California this year, the other state
with the most charter school ratings growth.
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Chart 2
Despite the risks inherent to the sector, such as the need for charter schools to be reauthorized or reviewed at regular
intervals well before the bond maturities, the majority of our charter school ratings are investment grade ('BBB'
category). However, the number of speculative-grade ratings has risen since our last report. As of June 16, 2014, 58%
of our charter school ratings were investment grade, considerably down from 70% last year. Less than half (46%, or 98
schools) are at 'BBB-', the lowest investment-grade rating, a notable drop from 56.7%, or 106 schools, in 2013. The
percentage of schools at the upper end of our rating spectrum hasn't changed much with 26 (12.1%) 'BBB' and 'BBB+'
charter school ratings since the last report versus 25 (13.4%) during the previous period. As of June 16, 2014, four
schools carried the highest unenhanced rating of any charter school we rate currently: 'BBB+', one more than in 2013.
The portion of 'BB+' rated charter schools grew to 21.0% of the total (45 schools) compared with last year's 17.1%
(32). But the greatest movement was of ratings at 'BB' and below, which constituted 46 ratings (21.5%) as of June 16,
2014, compared with the 24 schools (12.8%) in the previous report. In addition, as we noted in last year's median
report, more schools are entering the market earlier in their life cycles, which has also contributed to the rise in the
number and percentage of speculative-grade ratings.
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Chart 3
Our general outlook on the sector is negative, which is reflected in the rise of speculative-grade ratings and the rating
changes we made during the past couple of years. While we affirmed the majority of our ratings (125) in the past year,
we downgraded 27 schools and upgraded only one; we had also upgraded only one school in the previous year. In
addition, we placed 26 ratings on negative outlook compared with just five on positive outlook. This is similar to the
previous year.
We note that even schools with the highest ratings in the sector are not immune to operating or other pressures. At the
time of this report, three of the four 'BBB+' rated schools have negative outlooks. As with the lower-rated schools,
higher-rated schools have also had to contend with budget cuts and increased competition, which has resulted in lower
margins.
Table 1
Rating Actions Between May 31, 2014 And June 14, 2014
New ratings 28
Rating affirmations 125
Positive outlook revisions 5
Negative outlook revisions 26
Upgrades 1
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Table 1
Rating Actions Between May 31, 2014 And June 14,
2014 (cont.)
Downgrades* 27
*Includes ratings placed on CreditWatch with negative implications.
A Snapshot Of Charter Schools' Median Performance Ratios
These median ratios are based on the fiscal 2013 and 2012 audited results for the schools we rated publicly as of June
16, 2014 (table 3) and are the outcome of Standard & Poor's analysis of charter schools according to our rating criteria.
While we view ratio analysis as an important tool in our assessment of a charter school's credit quality, it is only one of
the financial components we assess. We incorporate several qualitative factors, along with our view of the short- and
long-term stability of a particular school, into our analysis. Various enterprise profile factors related to trends in
demand, competition, academic performance, management and governance, growth plans, local area demographics,
state legislatures, and charter structure are all key components of our rating analysis. Median ratios offer a snapshot of
the financial position of all rated schools and help when making credit comparisons across rating categories. In
addition, we believe tracking median ratios over time allows for a clearer understanding of sector-wide trends and
provides analysts and investors with a tool to better assess the future credit quality of the sector.
Table 2
Charter School Median Comparison*
BBB+/BBB BBB- BB+ BB/BB-
2013 2012 2013 2012 2013 2012 2013 2012
No. of schools 24 25 96 106 45 32 38 21
Enrollment 1,531 1,344 799 697 935 864 957 997
EBIDA margin (%) 17.9 16.6 14.4 12.1 12.9 12.7 11.4 10.1
Excess margin (%) 3.8 3.5 1.3 2.0 1.5 2.6 1.1 (0.1)
Lease-adjusted annual debt service coverage (x) 1.6 1.6 1.4 1.4 1.2 1.3 1.3 1.1
MADS ($000) 2,090 1,474 930 793 1,013 968 1,300 1,444
Lease-adjusted MADS coverage (x) 1.6 1.5 1.3 1.3 1.2 1.3 1.0 1.1
Lease-adjusted MADS as a percent of state aid (%) 14.8 13.1 16.3 15.0 19.8 15.8 18.6 17.9
Lease-adjusted MADS debt burden (%) 12.2 11.4 13.1 12.2 15.2 12.7 15.5 15.0
Unrestricted days' cash on hand 153 156 99 67 69 44 35 44
Unrestricted cash to debt (%) 27.5 26.0 15.9 13.0 12.2 12.0 6.8 8.0
Unreserved net assets as a percent of operating expenses 36.6 35.0 25.7 22.0 19.5 17.0 10.9 10.0
*Fiscal year. MADS--Maximum annual debt service.
Demand is rising
Enrollment increased at all but our lowest-rated schools. Generally, many of our speculative-grade rated schools are
smaller, and they also have more difficulties attracting students. The increase in enrollment for the sector as a whole
reflected in part the incremental additions of students to classrooms from year to year. The median enrollment grew
by about 100 students (14%) for the 'BBB-' category in 2013. However, the enrollment range is quite large, illustrating
the variety of 'BBB-' schools we rate, from single-site schools with headcounts of less than 300 to large school systems
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with more than 12,000 students. The popularity and comparatively strong academics of charter schools in some
communities have helped fuel the growth in both the headcount and the number of schools across the nation. We
anticipate that enrollment medians will continue to increase for investment-grade schools, which tend to enjoy strong
demand profiles.
The enrollment and related demand characteristics are a key component of a school's enterprise profile. Since total
revenues largely depend on per-pupil funding, we incorporate the ability to attract and retain students into our analysis
by assessing growth trends, retention rates, and wait lists. While higher enrollment doesn't directly correlate to a
higher rating, schools with very small enrollment typically don't have the operating flexibility to withstand any
fluctuations in demand. The median enrollment of 1,531 for the 'BBB+' and 'BBB' schools, compared with 935 for the
'BB+' schools, reflects the higher-rated schools' greater revenue flexibility that comes, in part, from a larger headcount.
In addition, the wait lists for the 'BBB+' and 'BBB' rated schools are generally much higher than those of the
lower-rated schools.
Financial performance was mixed
Once again, when looking at operating performance, we see that all but the lowest-rated schools are able to maintain
slim but positive operating margins and cover debt service. Overall, the changes in medians from fiscal 2012 to 2013
across the rating categories are mixed, with certain financial metrics improving and others weakening without a
pattern among the rating categories. We believe that this reflects each school's response to their individual operating
difficulties, as well as the varying state environments in which charter schools operate. This highlights the importance
of effective management and governance for charter schools. Also, the mixed results, in our view, are due to the
movement in the ratings between categories. In addition, some weakening of our medians may have occurred as our
rated universe continues to grow to include more new schools that may be in the earlier stages of their growth plans
and potentially operating with compressed margins. Nevertheless, clear trends emerged over the past year: declining
excess margins and maximum annual debt service (MADS) coverage.
Although there isn't a large variance in the EBIDA and excess margins across the rating categories, these ratios are
somewhat stronger for the 'BBB+' and 'BBB' rated schools and weaker for the 'BB' and 'BB-' rated schools, reflecting
the latter's restricted operating flexibility and the increased credit risk for speculative-grade schools compared with this
time last year. We note that the median excess margin decreased slightly for the majority of the schools we rate (which
are concentrated in the 'BBB-' and 'BB+' rating categories), reflecting operating constraints that still linger from recent
declines in per-pupil funding and some state holdbacks, allowing for less flexibility. While per-pupil funding appears to
have stabilized and even increased a little in fiscal 2014 for some states, some schools may take longer than others to
recover fully, if they do at all. It depends on when the cuts occurred and management's ability to make often difficult
decisions.
For most schools we rate, maximum annual debt service (MADS) has increased, illustrating that schools are taking on
more debt. This also strained operations at a time when revenues were not necessarily growing (except if a school was
adding students). Thus, MADS coverage also declined across most rating categories although, at 1.3x, it was stable for
the 'BBB-' rated schools. The weakening is at the lower end of the rating spectrum, with coverage declining slightly to
1.15x from 1.30x for the 'BB+' schools and to just 1.0x from 1.1x for the 'BB' and 'BB-' schools. Even the lower-rated
schools are able to generate at least 1x MADS coverage although, given bond covenant requirements, coverage at this
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level does not provide a lot of cushion for any financial stresses or enrollment fluctuations.
With overall per-pupil funding beginning to stabilize in many of the states and districts where we rate charter schools,
we expect that coverage for the higher-rated institutions will increase a little in the next few years as operations
normalize or at least begin to recover.
Cash levels
Cash levels and their trends are an important factor in our analysis since they provide a sense of each school's financial
ability to address various situations or unexpected events. Despite the various operating pressures that charter schools
have experienced in the past few years, enrollment growth and generally positive financial performance have slowly
grown cash levels, particularly for the investment-grade rated schools. The 'BB+' and 'BBB-' schools significantly
increased their cash levels year-over-year as certain states (primarily Minnesota and California) that had instituted
holdbacks were able to return to normal distributions, thus allowing the schools to plan and manage their liquidity
better. The decline in days' cash for the 'BB' and 'BB-' rated schools is reflective of the limited flexibility for such
schools and indicative of diverging credit quality between investment-grade and speculative-grade schools. In the
future, we anticipate days' cash on hand will increase for most of the investment-grade schools we rate.
Table 3
Charter Schools Standard & Poor's Rates Publicly
Obligor Obligor State Rating Outlook
21st Century Charter School of Gary Inc. IN BB- Stable
A.W. Brown-Fellowship Charter School TX BBB- Stable
Advanced Technology Academy MI BBB- Stable
Albert Einstein Academies CA BB Stable
Allen Academy MI BB+ Negative
Alliance for College-Ready Public Schools CA BB+ Stable
American Heritage Education Foundation CA BB- Stable
Arizona Agribusiness & Equine Center Inc. AZ BB+ Stable
Arlington Classics Academy TX BB+ Stable
Ashland School Inc. NJ BBB Stable
Aurora Academy Charter School CO BBB- (ICR) Stable
Avon Grove Charter School PA BBB- Stable
Bay Haven Charter Academy Inc. FL BBB- Stable
Benton County Charter School Organization Inc. AR BBB Negative
Bradford Academy MI D N.M.
Bronx Charter School for Excellence NY BBB- Stable
Campus Community School DE BBB- Stable
Candeo Schools Inc. AZ BB+ Stable
Career Success Charter School AZ BB Stable
Carolina International School NC BB+ Stable
Castle Rock Lifelong Learning Center CO BBB (ICR) Stable
Center for Academic Success Inc. AZ BBB- Stable
Cesar Chavez Academy MI BBB- Stable
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Table 3
Charter Schools Standard & Poor's Rates Publicly (cont.)
Cesar Chavez Public Charter School DC BBB- Stable
Chandler Park Academy MI BBB Stable
Charter Facilities Management - Indianapolis LLC IN BB Stable
Charter Facilities Management -- Northwest Indiana LLC IN BB Stable
Charter High School for Architecture and Design PA BBB- Stable
Charter School for Applied Technologies NY BBB- Negative
Charter School of Boynton Beach FL B Negative
Charter School of Educational Excellence NY BB Stable
Cheyenne Mountain Charter Academy CO BBB- (ICR) Stable
Chicago Charter School Foundation IL BBB+ Negative
Choice Academies Inc. AZ BB+ Stable
Choices in Learning Elementary Charter School FL BBB- Stable
Classical Academy Charter School CO BBB (ICR) Stable
Classical Academy, Inc. CA BB+ Stable
Coastal Academy Charter School Inc. CA BBB- Stable
Collegiate Academy Charter School CO BB (ICR) Negative
Collegium Charter School PA BBB- Negative
Colorado Springs Charter Academy CO BB (ICR) Negative
Community Academy Public Charter School DC B+ Negative
Community Leadership Academy CO BB Stable
Community of Peace Academy MN BBB- Stable
Compass Public Charter School ID BB+ Stable
Conner Creek Academy East MI BB- Negative
Coral Academy of Science-Las Vegas NV BBB- Stable
Cornerstone Schools FL BB+ Stable
Creative Montessori Academy MI BBB- Stable
Crossroads Charter Academy MI BB+ Stable
DaVinci Academy of Science & the Arts UT BBB- Stable
DCS Montessori Charter School CO BBB- (SPUR) Stable
DeKalb Academy of Technlogy & Environment GA BBB- Stable
Detroit Community Schools MI B Watch Neg
Detroit Service Learning Academy MI BB+ Stable
Detroit West Prep Academy MI BB- Stable
Discovery Charter School PA BB+ Negative
Dr. Joseph F. Pollack Academy Center of Excellence MI BB Stable
Duluth Public School Academy MN BBB- Stable
Eagle Advantage Schools Inc. TX BBB- (ICR) Stable
Eagle Ridge Academy MN BBB- Stable
Eagle South Mountain Properties (Eagle College Prep) AZ BB+ Stable
Edkey Inc. AZ BB+ Stable
Entheos Acad UT BB+ Stable
Evolution Academy Charter School TX BB- Negative
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Table 3
Charter Schools Standard & Poor's Rates Publicly (cont.)
Explore Knowledge Foundation NV BBB- Stable
Faith Family Charter School TX BBB- Positive
First Philadelphia Preparatory Charter School PA BB Stable
Flint International Academy MI BBB- Negative
Foxborough Regional Charter School MA BBB Stable
Friendship Public Charter School DC BBB Stable
Frontier Academy CO BBB- (ICR) Negative
George Washington Academy UT BB+ Positive
Gertz-Ressler Richard Merkin 6-12 Complex CA BBB- Stable
Global Concepts Charter School NY BBB- Positive
Global Leadership Academy Charter School PA BBB- Stable
Golden Rule School, Inc. TX BB+ Stable
Grand Traverse Academy MI BB+ Stable
Green Woods Charter School PA BB Stable
G-Star School of the Arts FL B+ Negative
Hanley International Academy MI BBB- Stable
Harmony Public Schools TX BBB Stable
Harvest Preparatory Academy AZ BBB- Stable
Higher Ground Academy MN BBB- Stable
Highline Academy Charter School CO BBB- Stable
Hmong Education Reform Co. MN BB+ Stable
Holly Academy MI BBB- Stable
Horizon Community Learning Center AZ BBB Stable
ICEF Public School CA BB Stable
Idaho Arts Charter School ID BBB- Negative
Idea Public Schools TX BBB Stable
Independence Charter School PA BBB- Positive
Irvington Community School Inc IN BB- Negative
Karl G. Maeser Preparatory Academy UT BBB- Stable
King Chavez Academies CA BB+ Stable
KIPP DC DC BBB+ Stable
KIPP LA Schools CA BB+ Stable
Kipp Inc. TX BBB (ICR) Negative
Lady Liberty Academy Charter School NJ BB Watch Neg
Lakes International Language Academy MN BBB- Stable
Lakeview Academy UT BBB- Stable
Landmark Academy MI BBB- Negative
Learning Gate Community School FL BB Stable
Lee County Charter Schools FL BB Stable
Legacy Preparatory Academy UT BBB- (ICR) Stable
Legacy Traditional School AZ BB Stable
Liberty Charter School ID BBB- Stable
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Table 3
Charter Schools Standard & Poor's Rates Publicly (cont.)
Liberty Common Charter School CO BBB- (ICR) Stable
Life School of Dallas TX BBB- (ICR) Stable
Lincoln Academy UT BBB- (ICR) Stable
Lincoln Academy Charter School CO BBB- (ICR) Stable
Literacy First Charter School CA BBB- Stable
Littleton Academy Charter School CO BBB (ICR) Stable
Littleton Preparatory Charter School CO BB+ Stable
Magnolia Science Academy-1 CA BB Positive
Mariana Bracetti Academy Charter School PA BB Stable
MaST Community Charter School PA BBB+ Negative
Math & Science Academy MN BBB- Stable
Milwaukee Academy of Science WI BBB- Stable
Monticello Academy UT BBB- (ICR) Stable
Monument Academy CO BBB- Negative
Navigator Pointe Academy UT BBB Stable
New Branches School MI BB+ Stable
New Designs Charter School CA BBB- Negative
New Foundations Charter School PA BB+ Stable
New Frontiers Charter School TX BBB Stable
Newark Charter School, Inc. DE BBB Stable
Noah Webster Basic Schools, Inc. AZ BBB- Negative
Noble Network of Charter Schools IL BBB Stable
North Davis Prepatory Academy UT BBB- Stable
North Star Academy UT BBB- Stable
Nova Academy TX BBB- Stable
Nova Classical Academy MN BBB- Stable
Oakland International Academy MI BBB- Stable
Odyssey Academy, Inc. TX BBB- Stable
Ogden Preparatory Academy UT BBB- (ICR) Stable
Old Redford Academy MI BB Negative
Orenda Education TX BBB- Stable
PACT Charter School MN BBB- Stable
Paradigm High School UT BB- Stable
Paradise Education Center AZ BB+ Stable
Parker Core Knowledge Charter School CO BBB- (ICR) Stable
Partnerships to Uplift Communities (PUC) PUC Valley CA BB Stable
PUC (Partnerships to Uplift Communities) Schools; Five Schools CA BB+ Stabke
Paterson Charter School for Science & Technology NJ BBB- Negative
Patterson Park Public Charter School MD BBB- Stable
Peak to Peak Charter School CO BBB+ (ICR) Negative
Philadelphia Performing Arts Charter School PA BB- Stable
Phoenix Collegiate Academy AZ BB+ Stable
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Table 3
Charter Schools Standard & Poor's Rates Publicly (cont.)
Pinnacle Charter School CO BBB (ICR) Negative
Platte River Academic Charter School CO BBB (ICR) Stable
Plymouth Educational Center Charter School MI BB- Stable
Pointe Educational Services AZ BBB- Stable
Propel Charter Schools - East PA BBB- Stable
Propel Charter Schools - McKeesport PA BBB- Stable
Propel Charter Schools - Montour PA BBB- Stable
Propel Schools - Braddock Hills PA BB+ Stable
Providence Hall UT BBB- (ICR) Stable
Renaissance Public School Academy MI BBB- Stable
Richard Allen Preparatory Charter School PA BB+ Negative
Richfield Public School Academy MI BBB- Stable
Riverhead Charter School NY BBB- Stable
Riverwalk Education Foundation Inc TX BBB- (ICR) Stable
Rocklin Academy CA BB+ Negative
Rocky Mountain Academy of Evergreen CO BBB- (ICR) Negative
Rocky Mountain Classical Academy CO B+ Stable
Ronald Wilson Reagan Academy UT BBB- Stable
Russell Byers Charter School PA BBB- Negative
SABIS International Charter School MA BBB Stable
Saginaw Preparatory Academy MI BBB- Stable
Santa Rosa Academy Inc CA BB Stable
Sarasota School of Arts & Sciences FL BBB- Stable
School Lane Charter School PA BBB Stable
School of Excellence in Education TX BB+ Stable
Sculptor Charter School FL BBB- Stable
SER-Ninos, Inc. TX BBB- Stable
South Bronx Charter School for International Cultures and the Arts NY BB+ Stable
Spectrum High School MN BBB- Stable
St. Croix Preparatory Academy MN BB Stable
St. Paul Conservatory for Performing Arts MN BBB- Stable
Star International Academy MI BBB Stable
Stargate Charter School CO BBB- Stable
Summit Academy North MI BB Stable
Summit Academy MI BB Negative
Summit Academy UT BBB- Stable
Tacony Academy Charter School PA BB+ Stable
Tejano Center for Community Concerns, Inc. TX B+ Negative
Telesis Center for Learning, Inc. AZ BB Stable
Terrace Community Middle School FL BB+ Stable
Texas Leadership Charter Academy TX BB+ Stable
The John H. Wood Jr. Charter District and Inspire Academies TX BBB- Stable
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Table 3
Charter Schools Standard & Poor's Rates Publicly (cont.)
Thea Bowman Charter School IN BB- Negative
Thomas Jefferson Classical Academy NC BBB- Stable
Trinity Basin Preparatory (Dallas) TX BB+ Stable
Tucson Country Day School AZ BB+ Negative
Twin Cities German Immersion School MN BB+ Stable
Twin Peaks Charter Academy CO BBB- (ICR) Negative
Universal Academy MI BBB- Negative
Universal Academy TX BB Stable
Universal Learning Academy MI BBB- Negative
UNO Charter School Network IL BBB- Stable
Uplift Education TX BBB- Stable
Value Schools Inc. CA BB+ Stable
Victory Charter School ID BBB- Stable
Vista at Entrada Charter School UT BB+ Stable
Voyageur Academy MI B Watch Neg
Wasatch Peak Academy UT BBB- (ICR) Stable
Wayside Schools TX BB+ Stable
West Philadelphia Achievement Charter Elementary School PA BB+ Negative
Windsor Charter Academy CO BBB- Negative
Winfree Academy Charter Schools TX BB Negative
Woodrow Wilson Academy Charter Schools CO BBB (ICR) Stable
World Learner Charter School (Chaska) MN BB+ Stable
Yinghua Academy MN BB Stable
As of June 16, 2014
Table 4
Glossary Of Selected Charter School Ratios
Term Definition
Total revenues ($000s) Includes all unrestricted revenues earned by the charter school (state, federal, local, program revenues,
based on GASB governmentwide or FASB accounting)
Total expenses ($000s) Includes all expenses incurred by the school (based on GASB governmentwide or FASB accounting)
EBIDA ($000s) Net income before interest, depreciation, and amortization expenses
EBIDA margin (%) (EBIDA / total revenue) X 100
Excess revenues over expenses
($000s)
Total revenues - total expenses
Excess income margin (%) (Excess revenues over expenses / total revenues) X 100
Lease-adjusted debt service
coverage (x)
(EBIDA + operating lease expenses) / (current debt service + lease payments for facilites + capital leases)
MADS ($000s) Maximum annual debt service based on current debt portfolio
Lease-adjusted MADS coverage (x) (EBIDA + operating lease expenses) / (MADS + lease payments for facilites+ capital lease payments)
Lease adjusted MADS as % of state
aid
100 X (MADS + lease payments for facilites + capital lease payments)/state revenues
Lease-adjusted MADS debt service
burden
100 X (MADS + lease payments for facilites + capital lease payments)/total expenses
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Table 4
Glossary Of Selected Charter School Ratios (cont.)
Balance sheet metrics
Unrestricted days' cash on hand Unrestricted cash / ((total expenses depreciation and amortization expense) / 365)
Total unrestricted cash to debt (%) 100 X unrestricted cash / total long-term debt
Unreserved net assets as % of
expenses
100 X unreserved net assets /( total expenses - depreciation and amortization expense)
FASB--Financial Accounting Standards Board. GASB--Governmental Accounting Standards Board. MADS--Maximum annual debt service.
Related Criteria And Research
Related Criteria
U.S. Public Finance Criteria: Charter Schools, June 14, 2007
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