USCharterSchools (1)

8/12/2019 USCharterSchools (1)

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U.S. Charter School Ratings ContinuedTo Slip As 2013 Medians Sent MixedSignals

Primary Credit Analyst:

Carlotta R Mills, San Francisco (1) 415-371-5020; [email protected]

Secondary Contact:

Avani K Parikh, New York (1) 212-438-1133; [email protected]

Research Contributors:

Phillip A Pena, San Francisco (415) 371-5039; [email protected]

Duncan Manning, San Francisco (1) 415-371-5088; [email protected]

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

WWW.STANDARDANDPOORS.COM/RATINGSDIRECT JUNE 25, 2014 1

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U.S. Charter School Ratings Continued To Slip As2013 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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U.S. Charter School Ratings Continued To Slip As 2013 Medians Sent Mixed Signals


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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 ser vice.

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 totalrevenues 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 maintainslim 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- StableCampus 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


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


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 (Par tnerships 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


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. Char ter District and Inspire Academies TX BBB- Stable


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Table 3


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 Elementar y 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 servicecoverage (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 stateaid

100 X (MADS + lease payments for facilites + capital lease payments)/state revenues

Lease-adjusted MADS debt serviceburden

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 % ofexpenses

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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USCharterSchools (1)