The FMB will look at five ratios during its financial performance review of a First Nation to determine grant eligibility. These ratios are calculated using information from the First Nation’s audited financial statements for the past five years.
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Fiscal Growth Ratio (FGR):
The FGR measures a First Nation’s ability to sustain and grow its revenues.
Thresholds - The First Nation demonstrates that its average FGR for the period under review is not lower than -5.0%.
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Operating Margin Ratio (OMR):
The OMR measures a First Nation’s ability to balance its revenues and expenses to maintain operations.
Thresholds - The First Nation demonstrates that its OMR for the period under review is not lower than -5.0%.
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Asset Maintenance Ratio (AMR):
The AMR assesses if a First Nation is investing enough to maintain its existing capital assets and add new assets as they are required.
Thresholds - The First Nation demonstrates that its AMR for the period under review is not lower than 100.0%.
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Net Debt Ratio (NDR):
The NDR measures a First Nation’s ability to manage its overall level of debt.
Thresholds - The First Nation demonstrates that its weighted average NDR for the period under review does not exceed 60.0% or that its NDR for the most recent year of the period under review does not exceed 60.0%.
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Interest Expense Ratio (IER):
The IER measures a First Nation’s ability to manage the interest payments on its debt.
Thresholds - The First Nation demonstrates that its IER for the period under review does not exceed 5.0%.