Six Tells of an Impending Financial Crisis

Colleges sometimes miss the ‘tells’ that indicate an increasing risk of a major financial crisis. Our experience has found that they are six critical ‘tells’ that a college should carefully monitor. You can find more information about this subject in TIPS on College Leadership, which is available on Amazon. If you would like to talk about concerns that you may have about the financial condition of your college, we are available at StevensStratergy.com.

1. Serial and Growing Deficits.
2. Burnout Score is less than three; use the following model to compute your score:

Cash Burnout Model ©
(data from Cash Flow in the Audit)

1. Short-term cash loans are increasing annually by large amounts
2. Net Tuition shrinks year-to-year.
3. Enrollment in a major is less than the number of faculty.
4. Payables are increasing.