An expert outside party review can give you the right information to help you make the best decisions.
Schools are experiencing major changes which will impact on both revenue and costs. Keeping abreast of the effects of these changes on financial metrics is absolutely critical to the financial management of the school. It contributes to the educational outcomes of the school and ensures sustainability and development.
As schools transform into more commercial operations, determining appropriate financial benchmarks allows you to compare the performance of your school or college against your peers, and provides unique and financial metrics for further school enhancement.
With over 50 years of experience in the Education sector, Moore Stephens can assist you in understanding your financial metrics.
We consider benchmarks as a good starting point to facilitate discussions around a school's financial performance and sustainability. Our specialists can help interpret the information and identify practical outcomes and actions, which could have a positive impact on the school's financial performance.
We have developed a range of performance and sustainability benchmarks specifically to assist you in developing your financial metrics in line with your strategic goals.
A selection of general benchmark guidelines across a broad range of key financial metrics for schools is provided below. For a more tailored understanding of how the benchmark guidelines are applicable to your school, contact our specialist Education Group.
Financial Peformance
| Benchmark | Guide | Comment |
| Income per student | >$15,000 | Total of all income sources divided by total student numbers |
| Employee cost ratio | < 68% | Comparing wages and salaries costs to total revenue |
| Net Earnings margin | > 5% | Net surplus as a % of total revenue |
| Earnings before interest, depreciation and amortisation (EBIDA) margin | > 10% | Earnings before interest, depreciation and amortisation as a % of total revenue |
| Debt servicing capacity | > 2.5 | EBIDA compared to total interest and loan repayments |
| Student to teacher ratio | > 11 | Average number of students per teacher |
| Student to non-teacher ratio | > 28 | Average number of students per non-teaching staff |
Balance Sheet Management
| Benchmark | Guide | Comment |
| Working capital ratio | > 1.2 | Comparing current assets to current liabilities |
| Debtors days | < 30 | Comparing outstanding fee debtors to total fee revenue |
| Financial Asset ratio | > 60% | Comparing total assets (excluding capital assets) to total liabilities |
| Reinvestment ratio | > 90% | Comparing reinvestment in capital assets to total depreciation charges |
| Borrowings to Equity ratio | < 35% | Comparing total school borrowings to equity amount/net assets |
| Borrowings per student | <$10,000 | Total borrowings divided by total number of students |
| Infrastructure Investment ratio | < 70% | Comparing current investment in capital assets to equity amount/net assets |
| Operating Risk Reserve | > 10% | Comparing uncommitted operating reserve amounts to total expenditure |
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