Analyzing the Financial Condition of Higher Education Institutions Using Financial Ratio Analysis Page: 49
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49
3. The increase in total-revenue-to-working-capital indicated a strain on
working capital.
4. Liabilities (current and total) decreased slightly, relative to fund balances,
after an increase from 1991 to 1992. This indicated a greater chance of financial risk.
5. The ratio long-term-liabilities-to-working-capital showed an increasing
trend. This indicated a greater chance of financial risk.
6. The investment-in-plant-to-total-fund-balances had an increasing trend. This
trend explained the increase in leverage ratios.
7. Total-revenue-to-total-fund-balances showed an upward trend, suggesting
unsupported growth. The high ratio (approaching 100%) explained the reduction in
working capital, leading to reduced liquidity and an increase in leverage.
8. The ratio net-revenue-to-total-revenue had a decreasing trend. This was
unfavorable, but the fact that it was low indicated the need to increase enrollment.
9. Miscellaneous-assets-to-total-fund-balances showed a flat trend.
Southwestern Oklahoma State University
All financial data for Southwestern Oklahoma State University are located in the
appendix, Table 5. A discussion of notable ratios follows.
Liquidity
The trend indicated a decrease in overall liquidity. This was unfavorable. The
three measures of liquidity were still considered to be within the acceptable range.
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Buddy, Nancy J. Analyzing the Financial Condition of Higher Education Institutions Using Financial Ratio Analysis, dissertation, May 1999; Denton, Texas. (https://digital.library.unt.edu/ark:/67531/metadc2194/m1/53/: accessed April 19, 2024), University of North Texas Libraries, UNT Digital Library, https://digital.library.unt.edu; .