Monitoring System Institutions Using Financial Indicator Ratios

Topics: Administration and Finance

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Summary

Financial officers in university system offices face increased pressure to assess the financial health of system institutions and communicate these findings to senior leadership without the time or expertise to analyze raw financial data. Comparative analysis of institutional financial health often requires the calculation of financial indicator ratios and composite financial scores that allow simple and effective metrics with which to compare institutions across time and against each other, regardless of the institution’s size or resource pool. This report surveys financial indicator ratio analysis and the use of composite scoring systems as a way for institution and system boards to quickly and easily track the health of their institutions.

Research Questions

  • How do system administrators use financial indicators to monitor the financial health of their constituent institutions?
  • Which financial ratios or composite scoring systems do system administrators use to examine the financial health of constituent institutions?
  • What ratios do administrators weight most heavily in the evaluation of financial health?