ERIC Number: ED165696
Record Type: Non-Journal
Publication Date: 1979
Reference Count: N/A
Evaluating the Economic Viability of Universities by Using Price-Level-Adjusted Financial Data. Faculty Working Papers.
Chan, James L.; Snyder, Gerald E.
Ways in which the external financial disclosures by universities may evaluate institutional economic viability are demonstrated. It is argued that the evaluation should take into account the effect of inflation and activity level. The evaluation model requires several years' information about revenues (general operating fund), the impact of inflation (as measured by the Higher Education Price Index (HEPI], and student enrollment in full-time equivalent (SFTE). Currently financial disclosure requirements of universities call for reporting only the revenue figures for individual years, and none of the other necessary information. Economic viability is measured by several growth indicators: revenue (R), R as adjusted by the HEPI (PLAR), R/SFTE, and PLAR/SFTE. Based on the data for the three state universities in Arizona for 1971-1978, this paper concludes that: (1) PLAR and PLAR/SFTE measure more accurately the economic viability of the universities in an inflationary environment; (2) university financial reports should include multi-year financial statistics and applicable price level changes; (3) instead of student headcount, universities should show SFTE; and (4) with appropriate supplementary information and analytic procedure, fund accounting information can be made more useful. (Author/MSE)
Descriptors: College Administration, Cost Indexes, Economic Change, Economic Progress, Educational Economics, Educational Finance, Higher Education, Inflation (Economics), Models, Predictor Variables, Resource Allocation, School Accounting, School Statistics, State Universities, Statistical Analysis
Publication Type: N/A
Education Level: N/A
Authoring Institution: Arizona State Univ., Tempe. Coll. of Business Administration.