Page 164 - UniZulu Annual Report 2020

Student Debt to Tuition and other Fee Income
Ratio
Student debt as a ratio of tuition and other fees raised is an indicator of the ability of the University to effectively manage student debt. The student-debt- to-tuition-and-other- fee-income ratio is 0,4:1 (2019: 0,3:1). The slight increase in 2020 is due to the portion of tuition and other fees that was deferred to the 2021 financial year due to the 2020 academic year continuing after the financial year-end as described earlier in the report.
This ratio is slightly above the norm of 0,2:1, which means that the student debt levels of the University remain high. However, compared to other historically disadvantaged and mainstream universities, this ratio is not high, with some universities recording a ratio of more than 1:1.
Liquidity Ratio
The liquidity ratio measures the University’s ability to meet its short-term financial obligations (current liabilities) as they fall due. A high liquidity ratio indicates a good liquidity position and the norm is that it should be above 1:1. The liquidity ratio in the case of a university measures its ability to meet its short-term obligations with its most liquid assets and, therefore, excludes inventories and student debt from its current assets.
Mr J. Kunji-Behari
Chairperson: Finance Committee of Council
The liquidity ratio of the University is 3,4:1 (2019: 4,4:1), which exceeds the norm of 1:1 and indicates that the University has sufficient liquidity and will be able to meet its short-term financial obligations.
Solvency Ratio
A solvency ratio is used to determine whether the University can stay solvent in the long term. The solvency ratio is calculated by calculating total assets less property, plant and equipment (PPE) to total liabilities. As PPE is illiquid and in most cases PPE of universities consists of buildings that cannot be sold, it seems appropriate to deduct the PPE from the assets and compare this to the liabilities. If this ratio goes below 1:1, a university would be technically insolvent.
The solvency ratio is 1,4:1 (2019: 1,4:1), which means that the University is above the norm of 1:1 and is solvent.
CONCLUSION
The Institution is in a sound financial position and is committed to continuing to strengthen past achievements through continued fiscal discipline and financial oversight. Surpluses have been achieved in the last three financial years and accumulated funds have also steadily increased. The University, therefore, has sufficient funding sources to implement its strategy.
Mr P. du Plessis
Executive Director: Finance
UNIVERSITY OF ZULULAND ANNUAL REPORT 2020
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