Home' Independence : Independence Vol 40 No 2 Oct 2015 Contents VOL 40 NO 2 OCTOBER 2015 INDEPENDENCE 77
PRODUCTS & SERVICES NEWS
ENVIRONMENTAL SUSTAINABILITY: FITNESS EQUIPMENT FROM PLASTIC BAGS
It’s the fitness craze that’s sweeping
Australian schools. Exercise equipment
made from recycled plastic and it’s all
the result of the REDcycle supermarket
campaign that’s converting shopping
bags into useable furniture.
Through the RED Group, over 100 million
pieces of flexible plastic were diverted
from landfill some of which was turned into
outdoor products by Replas—Australia’s
leading plastic recycler.
The latest product to be developed by
Replas is the RE-fit fitness circuit which is
manufactured using some of the flexible
mixed plastic waste collected through the
RE-fit is an affordable range of fitness
equipment especially designed for schools.
The circuit features six components offering
up to 12 exercise options and includes
Made from durable recycled plastic the
fitness equipment is intended to enhance the
school PE program. An increase in physical
activity has been linked to a positive effect
on concentration, memory and classroom
behaviour. RE-fit helps to raise the level of
fitness and physical competency of students
and promotes participation in physical activity.
Studies show that investing in physical
education results in many benefits for
students. Participation not only results in
better academic performance, but can
contribute to greater confidence and self-
Schools can choose from one of three
layout options or customise a design to
suit individual needs and site requirements.
At $4900 for a complete circuit it can be
self-installed and is the perfect project for a
weekend working bee.
One of the most amazing things about
RE-fit is that it is made from the equivalent
of 95,000 plastic bags that would otherwise
have ended up in landfill.
For schools interested in learning more
about the environment, educational tours
are offered at the Replas Environmental
Centre in Carrum Downs, Victoria.
For more information visit
www.replas.com.au or call 1800 REPLAS.
FINANCIAL HEALTH IS IN YOUR HANDS – A FIVE-MINUTE CHECKUP
Twice in the past few weeks I have sat
with a school Principal to run through
their ASBA/Somerset Non-Government
Schools’ Financial Performance Survey
report (FPS) – one occasion during a
taxi ride to the airport and another
during a conference lunch break.
Comments included, ‘I have learnt more
about the finances of my school in five
minutes than during my entire time in
Research indicates that financial viability for
not-for-profits depends on ability to maintain
services and resilience (responding to
short-term financial shock). The theme of
the research is having an adequate operating
surplus (‘profit’) and prudent levels of debt.
How are these measured?
The Net Operating Margin measures the
amount of operating surplus generated by a
school relative to total income. The five-year
average for Australian independent schools is
12%. This indicates that the average school
generated a surplus of 12 cents for every
dollar of gross income. So if a school had fees,
grants and other income of $10 million, after
paying all cash expenses (excluding interest),
on average it would have a $1.2 million
surplus to fund debt servicing and property,
plant and equipment purchases.
The Interest Cover Ratio is a measure of
ability to service debt. If you could notionally
pay interest expenses three times or more
John Somerset is a Chartered Accountant. He has
extensive knowledge of the independent schools
sector and is currently President of Independent
Schools Queensland and a board member of the
Independent Schools Council of Australia.
(Interest Cover ratio of 3.0 times), then
chances are you will also be able to meet
principal repayments. If the operating surplus
is too low or debt too high, the ratio may
fall below 3.0, meaning the risk of financial
distress is probably unacceptably high. Debt
Servicing Cover is similar and measures ability
to service interest and principal with a target
of 1.5 times or higher.
Figure 1 tracks the performance of a school
that found itself in financial difficulty in 2008.
It demonstrates the turnaround in financial
viability once using the FPS and ratio analysis
in the management of their operations. My
experience is that this trend is not uncommon
when schools start applying these practices.
Somerset Education is a specialist in the
financial governance of non-government
schools. For further information visit
Telephone 1300 781 968
Disclaimer We publish this article only for non-
government schools in Australia. All material should
be regarded as information only and individuals
should rely on their own enquiries when formulating
decisions for themselves or their clients. In no way do
we warrant or guarantee any changed circumstances
for a school from use or non-use of this material.
FIGURE 1 EXAMPLE SCHOOL – NET OPERATING MARGIN (SURPLUS GENERATION), INTEREST COVER (DEBT SERVICEABILITY)
Source: FPS 2005 - 2014 school year.
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
STARTED USING RATIOS
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