Financial health of Lithuanian state universities

Abstract

The problem of assessment of university’s financial health is investigated in the publication. This subject is relevant from both theoretical and practical approach. According to authors’ knowledge, it is one of the first works of Lithuanian authors that analyses the financial health of Lithuanian state universities. The aim of performed research is to assess the financial health of Lithuanian state universities. The research is carried out according to publicly announced financial reports of 2011-2016 of fourteen Lithuanian universities. The financial health of universities is assessed calculating Financial health index (FHI), which consists of four indices: primary reserve ratio, viability ratio, return on net assets ratio and net operating revenues ratio. These indices allow evaluating different aspects of financial health of universities. The four ratios are weighted and combined to determine FHI. FHI statistic indices (mean, minimum, maximum) are calculated applying SPSS software. With reference to FHI of each university, universities are divided to four groups that reflect different level of financial health. The level of FHI of different years and average FHI meanings showed that financial health of most universities was satisfactory in analysed period.