Question

Question Five (8 Marks) 1. Think of the university where you are studying and answer the following: If you were asked to identify 2 key financial performance measures and 4 non-financial performance measures which need to be monitored, what would they be, and why? (6 marks) 2. What are the problems with simply measuring key performance targets in a rather static (say, annual) way, particularly for fast-moving organizations which are exposed to significant external change? (2 marks)

Answer 1

Solution (1)-

key financial measures-

1. CASH FLOW STATEMENT-

The cash flow statement gives information regarding the academic education institution cash-flow achieved from the operational, investing and financing activities; if in the first case, the cash flows are generated by the evolution of the liquidities from the current activity, in the second situation, they are the consequence of the cash fluctuation resulting from the fixed assets purchase or disposal; instead, the cash-flow related to the financing activity reflects the cash movements generated mainly by contracting and refunding loans; basically, this component of the periodic summary reports provides useful and rich in significance information not only for the university, but also for the third parties, as it allows assessing the institution degree of liquidity through the treasury result;

2. THE STATEMENT OF CHANGES IN ASSETS/BALANCE SHEET/ PROFIT AND LOSS

the statement of changes in the assets/capital structure allows the assessment of the economic and financial performance of a university through the global result because it disseminates information regarding the equity structure, the accounting policies change impact, the depreciation calculation and recording, the fixed assets revaluation and the accounting errors correction; balance sheet gives details of asset and liabilities of the university, in short, it is only and unique document which can show you the financial position of the institution in one go. Profit and loss account is the elephant in the room kind of a thing. You can't run without profits. So to know the financial performance of the institution Profit and loss account is important.

NON FINANCIAL MEASURES-

I will talk about key performance measures of universities in heading and describe them in the subheading.

A. Student Success

1. Graduation Rates: The proportion of students who graduate and the amount of time it takes them.
2. Course Success Rates: watch completion ratio on a course-by-course basis.
3. Persistence Rates: Understand and watch the reasons that impact students’ endurance on to the next semester.
4. Student Engagement: The number of students who learn in abroad, live in campus hostels, participate in research , are took parts in honors programs, etc.
5. Student Outcomes: Keep record of students after graduation to see where their education leads them.
6. Disproportionate Impact: Measure gaps between specific cohorts and your overall student body.
7. Passing Rates for Licensure Exams: Assess the effectiveness of your programs in equipping students for licensing exams

B. Faculty & Staff

1. Faculty Workload & Productivity: Keep record of your instructors on an individual and departmental basis.
2. Student-to-Faculty Ratio: The number of students per faculty member, on a campus-wise basis or by department.
3. Faculty & Staff Tenure Rate: The time of employment for faculty members and other support staff members.
4. Faculty Turnover: Supporting tenure numbers, turnover rates identify areas with weak employee retention.
5. Part-Time vs. Full-Time Faculty: evaluate the costs and benefits for both types of instructors.
6. Weekly Student Contact Hours: Analyze potency by certain courses, sections, instructors and other variables.

C. Facilities & Resources

1. Section Fill Rates: Distinguish the number of enrollments for every section of particular course.
2. Classroom Utilization: See when, where and how classroom resources are being utilized.
3. Sustainability: Evaluate emissions, keep track of LEED certification record and keep an eye on utility spends.
4. On-Campus Housing & Commuters: Know the living standard of your students to inspire future campus upgrades.

D. Admissions & Enrollments

1. Transfer Rates: students who apply and are admitted are transferring from other universities?
2. Acceptance Rates: The proportion of students who applied and were admitted. Compare your rates to other schools to mark your competitiveness.
3. Student Acceptance by Zip Code: watch where your students are coming from, and use the record to custom marketing programs.
4. Year-Over-Year Enrollment: keep watch on daily enrollment data to make year-over-year comparisons.
5. Retention Rates: What proportion of students return for the next semester?
6. Recruitment Marketing Programs: Gauge the success of each marketing campaign.

Solution (B)

We are living in a dynamic environment. Businesses also have to work in this environment. Nothing is certain for a longer period. A good can be a best seller in his segment this month, it can possible there will be no customer for that good in the coming months. Example: there are companies who use to make sanitizers, masks, and PPE Kits, they did not see coming the very huge demand for their products before this march. They did not even know that covid will hit internationally to the people and demand of their products go leaps and bounds. We are living in fast moving world. Things relevant today can be irrelevant a week later or so. if we talk about KPI(key performance indicators) they are made in the starting of the year, but in the practical situation, market does not run according to KPIs. Let's say you have made KPIs for a product and after some month company is forced to shut that product of from market due to losses. The difference between KPIs and the real measures are that real measures changes according to market conditions while KPI does not so its get very hard to sometime measure or compare KPI with the real outcomes.

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