By Jonathan Smith, Managing Editor
University officials must consider numerous statistics and factors when determining the university’s financial health, said Phil Schubert, vice president of finance.
Schubert said they are careful, when determining the university’s financial health and stability, to compare most statistics to other factors and to other universities of similar size.
Schubert pointed to the decline in ACU’s endowment over the last two years as a situation where it is important to look at numbers relatively.
“When you look at the reductions of the university’s endowment due to the declining stock market, you have to realize that’s hit everybody,” Schubert said. “That type of relative meaning is extremely important.”
Schubert said they also look at how well the university is accomplishing their main financial goals.
“We have three basic tenants of our financial responsibility,” Schubert said. “Ensure affordability for students and families, provide adequate support and ensure long-term financial stability.”
Achieving one of these goals often means having to compete with the other two, Schubert said.
Financial figures are not the only factor in determining financial health; university goals also must be factored in.
“One thing that could be misleading is that we are selling fewer credit hours per full-time equivalent employees,” Schubert said, which alone might indicate to some that ACU is hurting financially. “It might just be one of the university’s goals to increase the student/teacher ratio.”
Another important factor ACU looks at are the numbers, averages and medians credit rating companies put out. These companies assess a business’s financial stability and assign it a credit rating.
Moody’s Investors Service, one of the three largest credit rating companies, assigned ACU a rating of Baa, which is a medium credit rating.
“We’re about in the middle of the pack as far as those ratings go,” Schubert said.
Moody’s puts out the median numbers and statistics for large private colleges and universities comparable to ACU. This report lists such statistics as average tuition discount, university’s debt per student, gifts and pledges and net worth.
ACU ranks comparatively to the medians for other large universities ranked Baa but ranks close to other large universities ranked A, the next level up, in several categories such as net worth.
“If you begin to look at net worth, we are extremely strong to similar universities,” Schubert said.
