To compute the operating ratio-enterprise funds,one would need to look in the CAFR for the:
A) Government-wide Statement of Net Assets.
B) Proprietary funds Statement of Revenues, Expenses, and Changes in Fund Net Assets.
C) Both of the above.
D) Neither of the above.

Question

Quizplus · Accepted Answer

The operating ratio formula for enterprise funds is expenses divided by operating revenues. The information needed to calculate this ratio can be found in the Proprietary funds Statement of Revenues, Expenses, and Changes in Fund Net Assets, which provides the revenues and expenses of enterprise funds. The Government-wide Statement of Net Assets provides information about the entity's financial position, but it does not provide the specific fund-level information needed to calculate the operating ratio. Therefore, the correct answer is B.

To Compute the Operating Ratio-Enterprise Funds,one Would Need to Look