Revenue capacity information in the CAFR should primarily focus on which aspect?

The focus on the largest single own-source revenue in the Comprehensive Annual Financial Report (CAFR) is vital because it provides a clear snapshot of the most significant revenue-generating aspect of the entity's financial health. Own-source revenues are those generated by the government without needing to rely upon intergovernmental transfers, meaning they reflect the entity's ability to generate funds internally through taxes, fees, or charges.

Highlighting the largest single own-source revenue allows stakeholders to understand where the entity's financial stability heavily relies. This information is critical for assessing the risk involved in a government's revenue structure. If a large portion of revenue comes from one source, it indicates a vulnerability; if that source experiences a downturn, the overall financial position could be severely impacted.

The emphasis on own-source revenues as opposed to total revenues, or even all significant sources, narrows the focus on sustainability and self-sufficiency—key concepts in governmental finance. This focused approach gives policymakers, investors, and citizens a basis for evaluating fiscal health and strategic planning, as it identifies both strengths and potential weaknesses in revenue generation strategies.