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Financial Indicators

All business entities, including colleges and universities, can benefit from a study of a series of financial ratios or indicators, especially if they are compared to prior periods for a context of trends in the business activities of the entity.

This publication of KCKCC’s Financial Indicators over several years can benefit administrators in seeing the past, present, and if unchanged, the future financial wellness of the institution.  In today’s complex business and political environments institutions face a wide variety of risks. However, the financial and non-financial impacts of such risks can effectively be managed and reduced through the continual evaluation and understanding of key performance indicators.

The ratios and indicators have been grouped according to the intent of the indicator.  There is a general explanation of the group and what ratios are included therein.  Each ratio or indicator presented is designed to tell some significant story about KCKCC and how it has utilized its resources to accomplish its vision and strategic plan.  We have prepared a short explanation of what each ratio portrays, how it is determined (calculated), and what it means in context of the trend experienced by that indicator.

The majority of the information presented is taken from the KCKCC Annual Financial Statements, which is very informative, but is intended to provide general financial information to various audiences in a format that is common to most colleges and universities.  This report is intended for use by the KCKCC’s administration and Board of Trustees in its decision-making processes and has not been audited or verified by an outside entity.

Assessment of Overall Financial Condition

Readers of financial reports are interested in assessing the financial condition of the institution.  An important means of evaluating an institution’s financial condition is the Statement of Net Position, which shows the assets, liabilities, and net assets at a point in time.  The following financial ratios, derived from the Statement of Net Position, are used to assess the financial condition of KCKCC:

Evaluation of Financial Performance

To evaluate the financial performance of a higher education institution, the financial activities as reported in the Statement of Revenues, Expenses, and Changes in Net Position should be reviewed.  This Statement reflects financial activity in instruction, research, public service, academic support, student services, operation and maintenance of plant, institutional support, student aid, and auxiliary enterprises.  Three primary operating statement ratios are used to evaluate financial performance:

Evaluation of Creditworthiness

Creditors are especially interested in evaluating the creditworthiness of an institution.  When institutions try to secure external financing for capital and other projects, they must be able to demonstrate their ability to repay their current and future debts.  Creditors tend to focus on the future, looking at the historical trends for indications that an institution will be able to meet its future obligations.  Ultimately, creditworthiness is a matter of judgment.  Three primary financial ratios are used to reflect an institution’s creditworthiness:

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