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Key financial metrics on Australia’s higher education sector - 2nd edition

13 December 2016

The HTML version of this report will be available shortly.

Overview

Background

This report is the second release of financial information held by Tertiary Education Quality and Standards Agency (TEQSA). It provides a snapshot of selected key financial metrics across the Australian higher education sector. Data in this report has been sourced from TEQSA’s 2015 data collection and relates to financial years ended 31 December 2014 until 30 June 2015.

TEQSA is committed to ensuring that stakeholders in Australia’s higher education sector have access to relevant information to enable and better inform decision making. TEQSA works closely with the Department of Education and Training and other agencies to collect data on the sector and to minimise the regulatory burden on providers. As part of its ongoing monitoring and quality assurance role TEQSA collects and then analyses this data.

The first edition of this report was released in April 2016 following a period of consultation and was well received by the sector. TEQSA intends to release this report on an annual basis using data from the latest available collection year.

About this report

Assessing the financial position and performance of a provider is a complex process which involves analysing a number of quantitative metrics and understanding the provider’s operating context, mission, governance and management structures. TEQSA conducts an annual financial assessment of each provider, which analyses ten commonly-accepted financial metrics reflecting the key business drivers critical to financial viability and sustainability. TEQSA consulted with the sector prior to adopting these financial metrics in 2013, and received broad support for their adoption.

This report provides a snapshot of selected key financial metrics across the whole sector. The metrics have been selected for their importance in measuring the capacity and capability of providers to deploy financial resources in a way that supports quality in the delivery of higher education. Importantly, the selected metrics are reasonably comparable across all providers and also provide visibility of financial position and performance at sector and sub-sector levels.1 The definitions and calculation methodology for each measure is available in the Glossary section of this report.

Special focus area in this report – International Student Revenue

This report includes a new special focus section featuring additional analysis on a topic of interest for the sector – Revenue from International Students. International student revenue accounted for 16% of sector revenue in the latest reporting year. It was the largest source of revenue for 18% of all providers and for 46% of For-Profit providers. International student revenue are a major revenue source for many providers complementing revenue from other sources.

Purpose of this report

TEQSA recognises that there is little publicly available information on Australia’s higher education sector beyond the university sector. Broadly, this report aims to enhance and improve the level of publicly available financial information on the whole of Australia’s higher education sector with a view to better informing decision making by sector stakeholders.

For many providers financial data is commercial-in-confidence; therefore, information in this report has been presented in an aggregated, de-identified manner. The analysis and key metrics presented in this report allow users, in particular existing higher education providers, to better understand how their entity’s financial performance compares with other similar providers and the sector more broadly.

Each registered higher education provider has been provided a copy of its organisation’s standing against each metric.

Provider groupings used in this report

For the purposes of this report, TEQSA has grouped providers by broad operating model, and by provider EFTSL size bands. The provider operating types used in this report are: Universities, Technical and Further Education (TAFE), Non-University For-Profit (For-Profit) and Non-University Not-For-Profit (Not-For-Profit).

Provider exclusions and inclusions

There are a small number of providers that were not required to submit financial data to TEQSA in the collection year due to contextual factors such as: being recently registered as a higher education provider; or at the time of the data collection, in the process of merging with another entity; withdrawing its registration (i.e. due to teach out of courses); or having its registration cancelled.

In addition to the exclusions identified above, in a handful of cases irregular or abnormal data points have been excluded from the analysis to avoid misleading interpretations of individual provider financial situations. Providers have also been excluded where insufficient data was available to calculate a particular financial metric. As a result, the number of providers presented in a particular chart may be less than the total number of providers listed for the respective provider type or size band. Further details on exclusions can be found in the Appendices and Explanatory Notes sections of this report.

Reporting period

Data in this report has been sourced from TEQSA’s 2015 data collection and relates to financial years ended 31 December 2014 until 30 June 2015.