Common use of Determination of Compliance Clause in Contracts

Determination of Compliance. As measured by the indicators and measures set forth in this section, is the school meeting financial performance standards? SCORING CATEGORIES: Meets Standards 80-100 points Approaches Standards 70-79 points Does Not Meet Standards 0-69 points INDICATOR PERFORMANCE SECTION II, INDICATOR 1: FISCAL VIABILITY‌ NEAR-TERM MEASURES Measure 1a, Current Ratio (Working Capital Ratio): Current assets divided by current liabilities Does the school have the ability to cover short-term financial obligations? Points Available Meets Standard: • Current Ratio is greater than 1.0 15 Approaches Standard: • Current Ratio is between 0.9 and 1.0 or equal to 1.0 10 Does Not Meet Standard: • Current Ratio is less than or equal to 0.9 0 Measure 1b, Unrestricted Days Cash: Unrestricted Cash divided by (Total Expenses/365) Does the school maintain an appropriate balance of cash on hand? Points Available Meets Standard: • Days Cash is greater than 60 days 20 Approaches Standard: • Days Cash is between 15 and 60 days 10 Does Not Meet Standard: • Days Cash is less than 15 Days Cash 0 Measure 1c, Annual Debt to Income : Total Annual Debt Payments (Debt Service) / Total Revenue Does the school have enough income to cover short-term debt payments? Points Available Meets Standard: • Annual Debt to Income is below 5 percent 20 Approaches Standard: • Annual Debt to Income is between 5 and 15 percent 10 Does Not Meet Standard: • Annual Debt to Income is above 15 percent 0 Measure 1d, Default Is the school repaying debts in a timely manner? Points Available Meets Standard: • School is not in default of loan covenant(s) or delinquent with debt service payments nor does the school have any outstanding debt 10

Determination of Compliance. As measured by the indicators and measures set forth in this section, is the school meeting financial performance standards? SCORING CATEGORIES: Meets Standards 80-100 points Approaches Standards 70-79 points Does Not Meet Standards 0-69 points INDICATOR PERFORMANCE SECTION II, INDICATOR 1: FISCAL VIABILITY‌ VIABILITY NEAR-TERM MEASURES Measure 1a, Current Ratio (Working Capital Ratio): Current assets divided by current liabilities Does the school have the ability to cover short-term financial obligations? Points Available Meets Standard: • Current Ratio is greater than 1.0 15 Approaches Standard: • Current Ratio is between 0.9 and 1.0 or equal to 1.0 10 Does Not Meet Standard: • Current Ratio is less than or equal to 0.9 0 Measure 1b, Unrestricted Days Cash: Unrestricted Cash divided by (Total Expenses/365) Does the school maintain an appropriate balance of cash on hand? Points Available Meets Standard: • Days Cash is greater than 60 days 20 Approaches Standard: • Days Cash is between 15 and 60 days 10 Does Not Meet Standard: • Days Cash is less than 15 Days Cash 0 Measure 1c, Annual Debt to Income : Total Annual Debt Payments (Debt Service) / Total Revenue Does the school have enough income to cover short-term debt payments? Points Available Meets Standard: • Annual Debt to Income is below 5 percent 20 Approaches Standard: • Annual Debt to Income is between 5 and 15 percent 10 Does Not Meet Standard: • Annual Debt to Income is above 15 percent 0 Measure 1d, Default Is the school repaying debts in a timely manner? Points Available Meets Standard: • School is not in default of loan covenant(s) or delinquent with debt service payments nor does the school have any outstanding debt 10