© 2002 William Buck All rights reserved. DataKnowledgeInnovation Financial Viability and the DEEWR...
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© 2002 William Buck All rights reserved. Data Knowledge Innovation Financial Viability and the DEEWR Financial Financial Viability and the DEEWR Financial Health Assessment Health Assessment Independent Schools Queensland Independent Schools Queensland ISQ State Conference ISQ State Conference Novotel Brisbane 27 August 2009 Novotel Brisbane 27 August 2009
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Transcript of © 2002 William Buck All rights reserved. DataKnowledgeInnovation Financial Viability and the DEEWR...
© 2002 William Buck All rights reserved.
Data Knowledge Innovation
Financial Viability and the DEEWR Financial Health AssessmentFinancial Viability and the DEEWR Financial Health Assessment
Independent Schools Queensland Independent Schools Queensland
ISQ State Conference ISQ State Conference
Novotel Brisbane 27 August 2009Novotel Brisbane 27 August 2009
Page 2
John Somerset
Qualifications
Graduate Diploma Company Directors Course
Certificate IV in Workplace Training and Assessment
Graduate Diploma in Applied Finance and Investment
Professional Year Institute of Chartered Accountants
Bachelor of Commerce University of Queensland
Accreditations/Memberships
Graduate - Australian Institute of Company Directors
Fellow - Financial Services Institute of Australasia
Member - Institute of Chartered Accountants in Australia
Member - Performance Measurement Association (UK)
Core Expertise
Benchmarking schools (14 years).
Strategic planning, evaluation and reporting.
Corporate governance of schools.
Financial management and performance improvement
Budgeting and board reporting models.
Appointments
Council and Finance - St Paul’s School (2000 – 2008)
Chairman - St Paul’s School Foundation (2006 to 2008)
Director - St Stephen’s College
Chair Finance Committee – St Stephen’s College
Risk Assurance Committee – St Stephen’s College
Member of Executive –Independent Schools Queensland
Chair Finance Committee –Independent Schools Queensland
Page 5
The “Going Concern” principle
DEEWR Schools Assistance Act 2008
The minister will be concerned about the financial viability of a school where
Its liabilities exceed its assets
For a substantial period it is unable to pay its debts as and when due or
Auditor expresses concern about financial viability
Australian Government Auditing and Assurance Standard
Auditor would generally express a financial viability concern where
School is unable to pay its debts as and when they fall due; and
It may be necessary to liquidate or otherwise wind up the operations
Page 6
Auditor will consider
Debts due in next 12 months exceed assets available to pay for them
Borrowings approaching maturity without realistic prospects of renewal
Withdrawal of financial support by debtors and creditors
Operating (cash) losses (historical and/or prospective)
Adverse key financial ratios
Inability to pay debts by due dates
Inability to comply with terms of loan agreements
Page 7
In short
Financial viability will be in question where there is insufficient cash being generated by the school to meet the obligations of the lenders (banks and creditors)
You must make a reasonable operating surplus (profit)
Page 8
Causes of Financial Distress
Over borrow (loans and leases)
Low profit margin or operating losses
Inability to repay debt from fiscal operations
Drop in students (demographics) causing drop in income
Not adjusting expenses (staff) for drop in students
Weak Governance
Not identifying financial distress early
Small financial resource base
Page 9
Causes of Financial Distress
Poor financial monitoring systems
Loss of owner’s support (deep pockets)
Grow too big, too quickly on the back of fee discounts
Non-precise budgeting - long and short term
Non-precise accounting – ignoring auditors management letters
Poor selection of key management personnel
Page 10
Operating Income
Operating Expenditure
Fee Levels State and Commonwealth
Grant Entitlements
Miscellaneous Income Available
Student Numbers
Tuition Administration & Maintenance
Student / Teacher Ratios
Miscellaneous Costs
Curriculum
Mission Statement
What drives Operating Requirements?
Page 11
What Drives Capital Requirements?
Capital Income Capital Expenditure
Facilities RequiredNon-Core Facilities Desired
Eligibility for Special GrantsOther Sources of
Capital Income
Student Numbers
Student / Teacher RatiosCurriculum
Mission Statement
Page 12
From 2009 DEEWR will use benchmarks to test financial viability
Schools Assistance Bill 2008 and Administrative Guidelines state
The financial viability of a school will be assessed utilising a set of financial indicators, with each indicator being assigned a benchmark…
The status of a school’s financial health will be assessed according to the number of benchmarks the school meets…
Schools will be assigned to one of three groups
Page 13
DEEWR Financial Viability Status Groups – out of 9 ratios
Group 1
5 + benchmarks
DEEWR comfortable with viability
Group 2
3- 4 benchmarks
DEEWR a little concerned and will request audited accounts and an action plan for improvement and a two year budget.
Deadline 4 weeks of receipt of request from DEEWR
Group 3
2 or fewer benchmarks
DEEWR quite concerned and will request engagement of qualified independent consultant to assess finance, governance and develop a management plan and a five year budget.
Deadline 6 weeks from mandatory meeting with DEEWR
Recurrent funding will be reduced to monthly installments until school moves to group 1 or 2
Page 17
Balance Sheet – A “picture” at a point in time
What you Own Assets
Less -
What you Owe Liabilities (debts)
Equals =
What you are Worth Equity (Retained Earnings)
Page 18
Balance Sheet – A “picture” at a point in time
Current Assets = Cash or things convertible to cash within 12 months
Current Liabilities = Debts payable within 12 months
Non-Current Assets = longer than 12 months to convert to cash
Non-Current Liabilities = longer than 12 months to pay
Page 19
Profit & Loss – A “picture” over time
Also called an Income Statement
Income Sale of services (Fees, grants, other)
Less
Expenses Costs incurred in operating the school
Equals
Net Operating surplus (Profit)
Page 20
The “Aim” of the Game
1. Earn more than you spend
2. Own more than you owe
Page 21
The “Aim” of the Game
Your School Entity
(Internal World)
Income in $1,000
Expenses out $900The Outside World
Balance Sheet Profit & Loss
Page 22
The value of the entity grows by $100
Extra $100 Cash
Expenses out $900
Income in $1,000
The Outside World
Balance Sheet Profit & Loss
Page 23
Reinvest $100 on a building
Extra $100 Cash
Building worth $100(Entity did not grow) Builder paid $100
Building supplied
The Outside World
Balance Sheet Just a flow of cash. No increase in wealth. Just A reallocation of assets from cash to building
Page 24
Moral of the Story
Must be able to pay your debts when due
Question 1 Are we solvent (can we pay our debts when due)?
You must make a surplus (profit) with the outside World
Question 2 Are we efficient?
Continue to reinvest in new assets
Question 3 Are we sustainable?
Question 4 How much debt is prudent?
Page 26
Measuring Performance
Financial statements provide absolute quantities - $
Convert quantities to ratios (eg. cost per student) for meaningful comparisons
We are better informed by comparing one quantity to another
Ratio Analysis
Page 27
Benchmarks – A Point of Reference
Make INFORMED decisions
A reference point or hurdle
What is a reasonable
Operating surplus (profit)?
Debt?
Staff number?
Benchmarks are your guiding tracks
Page 28
Use Benchmarks to
1. Assess Financial Health
Viability (viability ratios)
Operations (operational ratios)
2. Identify Weaknesses
3. Set Targets
4. Improve Performance
Make INFORMED decisions
Your fiduciary duty
Page 29
How to pass your DEEWR test
DEEWR Benchmarks
ASBA/Somerset Financial Performance Survey (FPS)
Your TestYour Coach/Tutor
• Diagnose
• Treat
• Improve
Page 30
DEEWR Financial Health Assessment Benchmarks
DEEWR ratio
Description Hurdle benchmark Type of ratio Year applied
1 Student/Teacher ratio Primary SES >104 = 12Primary SES < 105 = 17Secondary SES >104 = 9Secondary SES < 105 = 12.5
Operational
(but a crucial ratio)
2009
2 Enrolment change on previous year Maximum Minus 20% Viability 2009
3 % change in recurrent income compared to AGSRC % Minimum 0% Operational 2009
4 Change in net tuition income per student Minimum 4% Operational 2009
5 Salaries as % recurrent income Maximum 75% Operational 2009
6 Total Borrowings / Recurrent Income Maximum 100% Viability ? 2009
7 Interest Cover Minimum 2 times Viability 2009
8 Principal + Interest as % of Recurrent Income Maximum 10% Viability ? 2011
9 Cash surplus as % of Recurrent Income Minimum 3% Viability ? 2011
10 Recurrent Income – Recurrent Expenditure as a % Recurrent Income
Minimum 5% Viability 2009
11 Current assets / Current Liabilities (Current ratio) Minimum 1:1 Viability ? 2011
12 Government grants as % of Recurrent Income Maximum 70% Operational 2009
13 Bad and Doubtful debts as % of Gross fees Maximum 5% Operational 2011
Page 31
Comments on the DEEWR Benchmarks for 2009/2010Ratio Description Research Comments Retain
Remove xVary !
1 Student/Teacher ratio 50% of schools failed 80% of failing schools appear viable
Strong correlation to costs
But poor indicator of viability x2 Enrolment change on previous
year
3% of schools failed
ID < 1/3rd of schools likely to be unviable
Some correlation with viability 3
% change in recurrent income compared to AGSRC %
33% of schools failed 90% of failing schools appear viable
No correlation with viability x
4
Change in net tuition income per student
39% of schools failed
90% of failing schools appear viable
No correlation with viability
DEEWR including boarding ? x 5 Salaries as % recurrent income
41% of schools failed
50% of these schools not viable, but
Failed to ID 90% of unviable schools
Significant income missed
Not a reliable measure of viability
Now includes on-costs but hurdle not increased
x
6 Total Borrowings / Recurrent Income
6% of schools failed
65% of failing schools appear viable
Failed to ID 50% of unviable schools
Unreliable measure in current form
Suggest change in formula from recurrent income to profit (EBIDA)
!
7 Interest Cover 22% of schools failed
77% of failing schools appear viable
But correctly ID 94% of unviable schools
Include capital fees to halve sample of failing schools
Exclude schools with no debt
10
Recurrent Income – Recurrent Expenditure as a % Recurrent Income
38% of schools failed
80% of failing schools appear viable
But correctly ID 98% of unviable schools
Include capital fees and other ops.
Lower hurdle to 3%
Should reduce sample of failing schools by 1/3rd
12
Government grants as % of Recurrent Income
49% of schools failed
90% of failing schools appear viable
Failed to ID 70% of unviable schools
No correlation with viability x
Page 32
How to Improve your Financial Performance ASBA/Somerset Financial Survey
Are we Solvent?
Cash flow adequacy
Working capital ? – better to predict cash at bank
DEEWR equivalent
DEEWR 11 (2011)
Are we Efficient?
Net operating margin
Income per student
Discounts
Expenses per student
Staffing ratios
DEEWR 10
DEEWR 1
Are we Sustainable?
Depreciation
Reinvestment
Debt per student
Interest cover DEEWR 7
Page 35
How to use the ASBA/Somerset Benchmarking Survey
The schools selected for this comparison have the following characteristics:
Geographic: NationalDay or Boarding: BoardingSES: 106 to 112Enrolments: 1000 to 1600Affiliation: AllGender Mix: AllCurriculum: P-12
Characteristics of a Benchmarking Sample
Page 36
Actual Sample Average
1,300 1,260
Student Enrolments
Exa
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Average: 1,260
0
200
400
600
800
1000
1200
1400
1600
Source: ASBA/Somerset Education Non Government Schools Financial Performance Survey
Page 37
Answering the Key Questions – Key Ratios
Are we Solvent?
Cash flow adequacy
Working capital ? – better to predict cash at bank
Are we Profitable?
Net operating margin
Income per student
Expenses per student
Staffing ratios
Are we Sustainable?
Depreciation
Reinvestment
Debt per student
Interest cover
Page 38
Answering the Key Questions – Key Ratios
Are we Solvent?
Cash flow adequacy Working capital ? – better to predict cash at bank
Are we Profitable?
Net operating margin Income per student Expenses per student
Staffing ratios
Are we Sustainable?
Depreciation Reinvestment Debt per student Interest cover
Page 39
Cash Flow Management
Cash Flow Adequacy = Net cash from operations
Capital and debt expenditure
= Ability to generate cash to meet primary cash requirements
Rule of thumb = 1.0 times
Page 40
Actual Sample Average
0.53 0.92
Cash Flow Adequacy
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Average: 0.92
0.00
0.20
0.40
0.60
0.80
1.00
1.20
1.40
1.60
1.80
Source: ASBA/Somerset Education Non Government Schools Financial Performance Survey
Page 41
National Average
0.91
Cash Flow Adequacy
-
0.50
1.00
1.50
2.00
2.50
3.00
3.50
Source : ASBA/Somerset Education Non-Governmant Schools' Financial Performance Survey 2008 School Year
Average = 0.91 (Excluding catholic Systemic schools)
Page 42
Liquidity Ratios
Working Capital ratio = Current assets
Current liabilities
= number of time that you can pay current creditors (debts)
Rule of thumb = at least 1 times
Page 43
Actual Sample Average
0.20 0.90
Working Capital
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Average: 0.90
0.00
0.50
1.00
1.50
2.00
2.50
Source: ASBA/Somerset Education Non Government Schools Financial Performance Survey
Page 44
National Average
1.01
Working Capital
0.00
0.50
1.00
1.50
2.00
2.50
3.00
3.50
Source : ASBA/Somerset Education Non-Government Schools' Financial Performance Survey 2008 School Year
Average = 1.01 (Excluding Catholic Systemic schools)
Page 45
Answering the Key Questions – Key Ratios
Are we Solvent?
Cash flow adequacy Working capital ? – better to predict cash at bank
Are we Profitable?
Net operating margin Income per student Expenses per student
Staffing ratios
Are we Sustainable?
Depreciation Reinvestment Debt per student Interest cover
Page 46
Operating Efficiency
Net Operating margin (Adj.) = Operating Result*
Total Revenue* Before interest, depreciation and amortisation
For every dollar in income, how much remains after all expenses
2008 Industry Average 10.7%
Page 47
Actual Sample Average
7.0% 11.5%
Net Operating Margin (Adj)
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Average: 11.53%
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
14.0%
16.0%
18.0%
20.0%
Source: ASBA/Somerset Education Non Government Schools Financial Performance Survey
Page 48
National Average
10.7%
Net Operating Margin (before interest and depreciation)
-20%
-10%
0%
10%
20%
30%
40%
Source : ASBA/Somerset Education Non-Government Schools' Financial Performance Survey 2008 School Year
Average = 10.7% (excludes Catholic Systemic schools)
Page 49
Profit Trends (Lowest in 12 years)
0%
2%
4%
6%
8%
10%
12%
14%
2008 2007 2006 2005 2004 2003 2002 2001 2000 1999 1998 1997
Page 50
Actual Sample Average
$16,270 $15,440
Total Income per Student
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Average: $15,440
$0
$2,000
$4,000
$6,000
$8,000
$10,000
$12,000
$14,000
$16,000
$18,000
$20,000
Source: ASBA/Somerset Education Non Government Schools Financial Performance Survey
Page 51
National Average
$13,943
Total Income Per Student
$-
$5,000
$10,000
$15,000
$20,000
$25,000
$30,000
Source : ASBA/Somerset Education Non-Government Schools' Financial Performance Survey 2008 School Year
Average = $13,943 (Excluding Catholic Systemic schools)6% increase from 2007
Page 52
Actual Sample Average
$15,100 $13,535
Operating Expenses per Student
Exa
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Average: $13,535
$0
$2,000
$4,000
$6,000
$8,000
$10,000
$12,000
$14,000
$16,000
$18,000
Source: ASBA/Somerset Education Non Government Schools Financial Performance Survey
Page 53
National Average
$12,372
Total Operating Expenses Per Student (excl int. and Depn.)
$-
$5,000
$10,000
$15,000
$20,000
$25,000
$30,000
Source : ASBA/Somerset Education Non-Government Schools' Financial Performance Survey 2008 School Year
Average = $12,372 (Excluding Catholic Sustemic)7% increase from 2007
Page 54
Actual Sample Average
$8,174 $7,516
Teacher Salaries per Student
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Average: $7,516
$-
$1,000
$2,000
$3,000
$4,000
$5,000
$6,000
$7,000
$8,000
$9,000
$10,000
Source: ASBA/Somerset Education Non Government Schools Financial Performance Survey
Page 55
Staffing
Student/Teacher ratio = Number of students
Full-Time teacher equivalent
= Average number of students per EFT teacher
Best Practice = Depends on the school
Page 56
Actual Sample Average
15.4 14.7
Primary Student-to-Teacher Ratio
Exa
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Average: 14.67
0.0
5.0
10.0
15.0
20.0
25.0
Source: ASBA/Somerset Education Non Government Schools Financial Performance Survey
Page 57
National Average
15.3
Primary Student/Teacher Ratio
-
5.0
10.0
15.0
20.0
25.0
30.0
Source : ASBA/Somerset Education Non-Government Schools' Financial Performance Survey 2008 School Year
Average = 15.3 (Excluding Catholic Systemic)
Page 58
Primary Student/Teacher ratio
14.5
15
15.5
16
16.5
17
2008 2007 2006 2005 2004 2003 2002 2001 2000 1999 1998
Page 59
Actual Sample Average
10.5 10.3
Secondary Student-to-Teacher Ratio
Exa
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Average: 10.33
0.0
2.0
4.0
6.0
8.0
10.0
12.0
14.0
Source: ASBA/Somerset Education Non Government Schools Financial Performance Survey
Page 60
National Average
11.3
Secondary Student/Teacher Ratio
-
2.0
4.0
6.0
8.0
10.0
12.0
14.0
16.0
18.0
20.0
Source : ASBA/Somerset Education Non-Government Schools' Financial Performance Survey 2008 School Year
Average = 11.3 (Excluding Catholic Systemic schools)
Page 61
Secondary Student/Teacher ratio
10.5
11
11.5
12
12.5
13
2008 2007 2006 2005 2004 2003 2002 2001 2000 1999 1998
Page 62
Answering the Key Questions – Key Ratios
Are we Solvent?
Cash flow adequacy Working capital ? – better to predict cash at bank
Are we Profitable?
Net operating margin Income per student Expenses per student
Staffing ratios
Are we Sustainable?
Depreciation Reinvestment Debt per student Interest cover
Page 63
Asset Position and Sustainability
Depreciation Impact = Depreciation expenditure
Net cash from operations
= Extent to which assets wear out relative to the cash you are generating from operations.
Page 64
Actual Sample Average
85% 65%
Depreciation Impact Ratio
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Average:65%
0%
20%
40%
60%
80%
100%
120%
140%
Source: ASBA/Somerset Education Non Government Schools Financial Performance Survey
Page 65
National Average
58%
Depreciation Impact Ratio
0%
50%
100%
150%
200%
250%
300%
Source : ASBA/Somerset Education Non-Governmant Schools' Financial Performance Survey 2008 school Year
Average = 58% (Excluding Catholic Systemic schools)
Page 66
Asset Position and Sustainability
Reinvestment = Capital expenditure
Net cash from operations
= Extent to which you are reinvesting in new equipment relative to the cash you are generating from operations.
Best Practice = 60% to 65%
Page 67
Actual Sample Average
165% 114%
Reinvestment Ratio
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Average:114%
0%
20%
40%
60%
80%
100%
120%
140%
160%
180%
200%
Source: ASBA/Somerset Education Non Government Schools Financial Performance Survey
Page 68
National Average
132%
Reinvestment Ratio
0%
100%
200%
300%
400%
500%
600%
700%
Source : ASBA/Somerset Education Non-Government Schools' Financial Performance Survey 2008 School Year
Average = 132% (Excludes Catholic Systemic schools)
Page 69
Reinvestment Trends
0%
20%
40%
60%
80%
100%
120%
140%
160%
180%
2008 2007 2006 2005 2004 2003 2002 2001 2000 1999 1998
Page 70
Debt per Student
Financial Debt per student = Interest bearing (bank) debt
Student numbers
= Average debt per student
2008 Industry Average = $6,300
Page 71
Actual Sample Average
$6,000 $4,138
Debt per Student
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Average $4,138
$0
$1,000
$2,000
$3,000
$4,000
$5,000
$6,000
$7,000
$8,000
$9,000
$10,000
Source: ASBA/Somerset Education Non Government Schools Financial Performance Survey
Page 72
Debt per Student National average (Excludes catholic Systemic schools)
$0
$1,000
$2,000
$3,000
$4,000
$5,000
$6,000
$7,000
2008 2007 2006 2005 2004
Page 73
Capital Structure & Debt Protection
Interest Cover = Earnings before interest and depreciation
Interest expense
= Number of times the school can meet its interest expense
Rule of thumb 2 to 3 times (refer to you bank’s policies)
Page 74
Actual Sample Average
3.3 20.5
Interest Cover
Exa
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0.0
10.0
20.0
30.0
40.0
50.0
60.0
Source: ASBA/Somerset Education Non Government Schools Financial Performance Survey
Page 75
Quantify Variations
Key Performance Indicator Sample Average
Example School Effect
Net Operating Margin (Adj) 11.5% 7.3%
Total Income per Student $15,440 $16,270
Operating Expense per Student
$13,535 $15,100
Debt per student $4,138 $6,000
Primary Student/teacher ratio 14.7 15.4
Secondary Student/Teacher Ratio
10.3 10.5
Page 76
Quantify Variations
Key Performance Indicator Sample Average
Example School Effect
Net Operating Margin (Adj) 11.5% 7.3% ($900,000)
Total Income per Student $15,440 $16,270 +$1 million
Operating Expense per Student
$13,535 $15,100 +$2 million
Debt per student $4,138 $6,000 +$2.4 million
Primary Student/teacher ratio 14.7 15.4 (1.5) staff
Secondary Student/Teacher Ratio
10.3 10.5 (1.5) staff
Page 77
Limitations of Benchmarks
Different participants at different stages of development and with different ranges of services.
Consistency in accounting.
Ratios only as good as data (Garbage In Garbage Out)
Page 78
School Council and Management working together
Participate in the survey
Quantify variances
Debate with reference to strategy
Make INFORMED decisions
Set policies
Operating margin
Interest cover
Debt per student
Student/teacher ratios
Page 80
Governance –v- ManagementTricker’s Model - International Corporate Governance
Compliance Role Performance Role
External Role
Provide accountability Strategy formulation
Internal Role Monitoring and supervision Policy making
Past and present orientated Future orientated
How much time should you spend in each quadrant?
Where are you now?
What alters your priority?
BoardManagement
Page 81
Budgets – Long term and Short term
“Dollarise” your plan
Building master plan
Past, present and future modus operandi
Funding needs
“3 way” budget
Profit and loss
Balance sheet
Cash flow – cash at bank yearly rests and monthly rests
Compare KPI’s against benchmarks
Net operating margin
Interest cover
Staff ratios
Page 82
Monitoring
Distill information on crucial
Outcomes (operating margins, student/teacher ratios, interest cover) Drivers (student and staff numbers)
Report in a format which is easily understood by all.
Assess past, present and future performance
Somerset Key Indicator (SKI) report Preventative, pro-active decision making
Focus on matters of importance - CAUSE and effect
Interest cover Debt levels Operating margins
84
SKI Report
SKI Report 2007 Actual
2008 Actual2009
BudgetRec. Min.
NSW, SES 110-130, day schools
students 900-2000, Prep -
yr 12
Indexed to 2008 (5% p.a.)
Indexed to 2009 (5% p.a.)
Are we Solvent? (How easily can we pay our debt and capital expenditure needs)
Cash Flow Adequacy 0.15 1.35 0.85 1.04
Working capital ratio 0.7 0.6 1.0 1.22
Percentage trade debtors to fees billed (boarding and tuition) 18.9% 14.9% 9.4% 1.7%
Are we Profitable?
Earnings before interest, depreciation & amortisation (EBIDA) 179,503 933,703 211,868
Your profit would be this figure if you performed at sample average 1,445,722$ 1,498,621$ 1,028,765$
Including Capital Income
EBIDA + Other capital income 218,006$ 1,191,703$ 211,868$
Margin including other capital income 2.1% 10.7% 2.8%
Net cash from operations 181,150-$ 707,368$ 111,868$
Interest Cover (including other capital income) 0.55 2.46 2.12
Profit margin (EBIDA/Gross Income) 1.7% 8.6% 2.8% 13.8%
Income per student (excludes boarding, includes capital fees & levies) 12,169$ 12,991$ 11,564$ 14,609$ 15,339$ 16,106$
Percentage discounts/concessions to fees billed 8.0% 8.1% 0.9% 5.6%
Teaching salaries per student 6,752$ 6,409$ 8,448$ 7,551$ 7,929$ 8,325$
Total expenses per student (excluding boarding, interest and depreciation) 11,962$ 11,878$ 11,082$ 13,073$ 13,727$ 14,413$
Student/Teacher ratio - primary 14.6 16.7 13.0 15
Student/Teacher ratio - secondary 10.1 10.3 10.0 11.4
Are we Sustainable?
Depreciation/amortisation impact -520% 127% 218% 66%
Reinvestment -576% 57% 134% 116%
Debt per student 8,538$ 8,906$ 1,546$ 9,212$ 9,673$ 10,156$
Interest Cover (Earnings before interest and depreciation/interest expense) 0.4 1.9 2.1 3 13.5
Liabilities to equity 584% 768% 97% 82%
= Good result
= Caution on this result
Your School Benchmarks
Page 85
Summary
1. Assess Financial Health
Viability ratios
Operational ratios
2. Identify weaknesses
3. Set targets
4. Accurate, succinct and timely monitoring
Page 86
For further details contact
John Somerset – Director of Somerset Education
Email [email protected]
Internet www.somerseteducation.net
Telephones 1300 781 968
0417 618 899
Address GPO Box 3273
Brisbane, Queensland
Australia 4001
