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Table 14 - Key Financial Indicators 2015/16 to 2022/23

HE Provider Data: Finance

Table 14 - Key Financial Indicators

Academic years 2015/16 to 2022/23

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Data for Table 14 are not based on restated figures.

Some HE providers saw significant cost adjustments in both 2018/19 and 2019/20, relating to the accounting treatment for the value of pension schemes. This appears as a significant additional cost in 2018/19, which caused some providers to report deficits, and an opposite movement in 2019/20, which caused some providers to show unusually large surpluses. This additional cost is an accounting, non-cash, adjustment. It is not a typical annual operating expense/credit for these providers and therefore caution is advised in any interpretation of financial operating performance in 2018/19 and 2019/20. For this reason, additional versions of relevant KFIs with pension cost adjustments applied have been published to enable users to understand the impact of this accounting change.

Some providers had a denominator value of zero for specific KFIs. Where this was the case, values have been suppressed in the Table.

Type of data

Administrative data

Data source

HESA (Higher Education Statistics Agency) is part of Jisc. We are the experts in UK higher education data and analysis. We have been collecting higher education information since the 1994/95 academic year.

Finance data is taken from the HESA Finance record, which universities, colleges and other higher education providers return to HESA on an annual basis. The Finance record collects a range of information about the primary financial statements from HE providers' published accounts.

From 2018/19, data for English HE providers (excluding further education colleges and sixth form colleges under the primary regulation of the Education and Skills Funding Agency) was collected by the Office for Students.

We provide data and analysis on finances of HE providers to a wide variety of customers, including:

  • Governments
  • Universities (via the Heidi Plus analytics tool)
  • Academic and commercial researchers
  • Students and potential students
  • Trade unions and employers' associations
  • Policy makers.

Our data is used to regulate the sector, inform policy making, advance understanding of social and economic trends, support decision making, and enhance public understanding of - and confidence in - the higher education sector.

Related releases

Our HE Provider Data: Finance data pages collect together all of the tables we publish on finances in higher education.

Further information

This table displays nine key financial indicators and shows the formulae and values used in the calculation of those indicators.

It is important to bear in mind that the financial health of a provider cannot be determined solely by ratio analysis for a single year. A criticism of a simple ratio analysis is that they do not tell the whole story; they do not necessarily represent the future as they are calculated on past data and that they do not always consider external and contextual factors. To fully understand a provider’s finances please refer to their financial statements available on their websites.

View Table 14 - Key Financial Indicators

Ratio analyses are to be used with caution and work best when a complete analysis, including trend analysis, is carried out by using both financial and non-financial indicators.

In 2019/20, pension provision adjustments were made following revaluation of the pension fund and in particular the Universities Superannuation Scheme (USS). These revaluations resulted in pension provision adjustments and as a result some providers have disclosed this as a material transaction. Some pension schemes carry an accounting liability which changes as the projected values of future pension assets and liabilities changes. These accounting adjustments are displayed as either a positive or negative value in staff costs although this does not relate to the operations in that single year and does not represent a cash transaction. This has been more significant for recent revaluations of the USS. Due to this accounting adjustment, the headline staff cost and surplus/deficit figures may not be representative of normal business as usual operations in that year. The key financial indicators (KFIs) therefore are calculated both including and excluding pension adjustment in five instances.

Description of the KFI’s used in this table are:

Surplus/(deficit) as a % of total income 
A key measure of financial sustainability. A provider showing a trend of surpluses with an increasing % suggests that they are generating funds to invest and innovate. This KFI is also calculated after excluding pension adjustment.

Staff costs as a % to total income
Staff is the largest category of expenditure and includes employer’s salary costs as well as National Insurance and pension costs. Much attention is paid to staff costs particularly due to rising pension costs and whether the business generates enough income to sustain rising levels of staff costs. This KFI is also calculated after excluding pension adjustment.

Premises costs as a % to total costs
Of the provider’s total expenditure, premises maintenance costs are normally the second largest cost. This KFI is also calculated after excluding pension adjustment.

Unrestricted reserves as a % to total income
This measures the ability of the provider to sustain through future uncertainties. The difference between assets and liabilities in provider’s balance sheet is called reserves. Reserves is then separated as restricted and unrestricted reserves. While restricted reserves are used for specific purposes, unrestricted reserves are the provider’s accumulated value of surpluses/deficits with no restrictions on how they can be spent. This may also be called general reserve. The reserves show the strength of the balance sheet.

External borrowing as a % of total income
This demonstrates the balance between debt and income. High level of debt to income means the provider will likely have higher debt servicing cost (dependent on the terms of the debt) relative to its ability to afford this cost, and may mean a more limited capacity to enter into more debt for investments.

Days ratio of total net assets to total expenditure
This measures the net value of the provider’s balance sheet, relative to its cost base. This KFI is also calculated after excluding pension adjustment.

Ratio of current assets to current liabilities
Also called the current ratio, tests whether the provider has enough short term assets (also called working capital) to carry out its operations. 

Net cash flow from operating activities as a % of total income
This measures the provider’s actual cash generated from its operations relative to its income size.

Net liquidity days
This measures the ability of the provider to meet its short-term obligations at a given point in time. It is a measure of how many days of average operating costs the provider can pay from its liquidity (how easily assets can be converted into cash) if there was no income. This KFI is also calculated after excluding pension adjustment.

Debt service ratio
Available from 2020/21. This indicates the ratio of net operating cash flow to debt service costs.

Refer to the KFI definitions page for detailed information on formulae

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