Financial Sustainability In Higher Education Institutions: Accounting Perspective

Abstract

This paper aims to review the research literature on financial sustainability in higher education institutions (HEIs) from the perspective of accounting principles. A search of Google Scholar to select only the papers available in English yielded 16 papers for the review. Out of 16 papers reviewed, ten dealt with specific financial analyses to highlight the measurement of financial sustainability trends in some HEIs. The remaining six papers dealt with non-financial issues like social factors and conflict between academic and financial logic. The commonly used method for assessing the financial sustainability of HEIs was the estimation of financial ratios. ROA, debt-equity (debt management) ratio, and asset management ratio are some of these ratios. The use of different financial instruments to assess the status of financial sustainability leads to some uncertainty about which method should be used in which context. Further research is required to sort out this issue. Some methods of implementing strategies to ensure financial sustainability in HEIs were described in detail in two papers from Saudi Arabia. Some problems and challenges of implementing these strategies were also discussed in two papers from Italy. HEIs need to implement measures to ensure financial sustainability with continuous monitoring and improvement using appropriate financial ratios. This is necessary because of the reduced funding from public sources and increased demand for accountability and transparency from the HEIs. It also helps to remain competitive in the higher education market.