Suggested Credit Score of Municipalities as a Tool for More Efficient City Management

In this paper we suggest a way how to make the management of city more efficient. Forecasting the financial situation of the organization is an important part of the company practice. The economy of cities and municipalities works on the same principle however relations balance-sheet data are not so explicit. Minimal attention is attributed to many correlations as the sense of forecasting balance-sheet data of municipalities is not considered to be an interesting part of the financial-economic analysis. The methodology of forecasting of the future financial state using our suggested credit score expressed through trading income per habitant absents. Credit score is one of ways how to determine the total financial situation of the organization. The goal of the paper is to propose methodology for taking into account relations and correlations of the basic financial and economic data in order to determine financial condition and solvency of municipalities. The determination of this credit score would be useful for citizens of the city, the government of the city as well as for banking institutions. The use of these relations would be a simple manual how to get the situation about financial economy of the cities. Finally, the implementation and use of these characteristics could be useful in making the city management more efficient. By doing this, municipalities and cities would have financial resources, either from surplus or provided low bank credits, to finance important areas such as public transport and infrastructure.