Measuring financial sustainability of private higher education institutions
2018
Cernostana, Z., Baltic International Academy, Riga (Latvia)
Currently, one of the main priorities of the development of the higher education system is ensuring the quality of education. As it is noted in “Standards and Guidelines for Quality Assurance in the European Higher Education Area”, developed by the European Association for Quality Assurance in Higher Education (ENQA), institutions should ensure the availability of sufficient, relevant education resources. At present, there is no single methodology for assessing the financial provision of educational services supplied by private commercial companies in Latvia. The aim of this paper is to define a set of indicators for assessing the financial sustainability of a private higher education institution (PHEI). The author presents the results of the financial sustainability analysis (based on such ratios as leverage, debt-equity, liquidity, etc.) of Latvian PHEIs and suggests: 1) indicators most suitable for assessing sustainability of an educational institution; 2) permissible range of these indicators recommended for Latvia and methodology for their aggregation. The developed methodology may be recommended to national committees of quality assessment for accreditation procedures of higher education institutions (HEIs) and study programmes.
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