How do you calculate operational sustainability?

Calculate Operational Self Sufficiency

1. Operating revenues = financial income = 2,710,000.
2. Financial expenses = 1,340,000.
3. Impairment expense = 140,000.
4. Operating expense = 650,000.

What are sustainability ratios?

Rate of Return on Capital Ratio : Calculates surplus generated from operations of a MFI to its average capital fund/net worth for the period. If an institution’s ROTA is fairly constant, this ratio can be used to forecast earnings in future periods. …

What is OSS in microfinance?

This paper is to determine factors best describing a microfinance institution’s (MFI’s) operational self- sufficiency (OSS). The OSS is defined as the ratio of an MFI’s operating revenues to it operating expenses including the financial costs and impairment losses on loans.

How do you calculate self-sufficiency ratio?

The self-sufficiency ratio (SSR) is defined as: SSR = production x 100/(production + imports – exports). The SSR can be calculated for indi- vidual commodities, groups of commodities of similar nutritional values and, after appropriate conversion of the commodity equations, also for the aggregate of all commodities.

What should be included in a sustainability ratio?

Profitability Sustainability Ratios. For the purpose of this calculation, business revenue should exclude any non-operating revenues or contributions. Total expenses should include all expenses (operating and non-operating) including social costs. A ratio of 1 means you do not depend on grant revenue or other funding.

Which is the best definition of operational sustainability?

‘Operational sustainability’ is a method of evaluating whether a business can maintain existing practices without placing future potential resources at risk. Sustainability can refer to any one of a variety of areas, say ecological resources, social or economic resources.

What is the OSS ratio of a company?

OSS ratio = 2,710,000 / (1,340,000 + 140,000 + 650,000) = 127.23% So the operational self-sufficiency ratio is 127 % which means that the company is doing well to earn sufficient operational revenues to cover its total cost.

How to calculate the operational self sufficiency ratio?

Hence, we can calculate operational self sufficiency as below: OSS ratio = 2,710,000 / (1,340,000 + 140,000 + 650,000) = 127.23% So the operational self-sufficiency ratio is 127 % which means that the company is doing well to earn sufficient operational revenues to cover its total cost.