Special Issue
A Financial Analysis of Public Universities/Public University Corporations
2012 Volume 15 Pages 71-92
Details
2012 Volume 15 Pages 71-92
In Japan, there are few studies of public (prefectural or municipal) universities as a distinct category, much less analyses of their financial circumstances. Moreover, since 2004, it has become possible for a public university to be incorporated and to be given the status of a public university corporation, which then becomes the university’s governing body. More research is needed on the implications of this change, and it is against this background that this paper aims to undertake a financial analysis of public university corporations in addition to reviewing previous papers on public university finances.
The main results of interest that are revealed by a financial analysis of public university corporations on the basis of their financial statements are follows (listed firstly are points as seen from a macro perspective):
・Tangible fixed assets make up a large proportion of the total assets.
・The percentage of earmarked funds in university balance sheets is small but they play an important role in profit and loss statements.
・Corporations invest and pay their debts instead of conducting a positive manipulation of their cash flow.
・Corporations’ undivided profits are largely reserved as earmarked funds, but it is not clear whether or not they are carried forward to the next Midterm Objectives period.
・About 40 percent of operating costs and extraordinary losses incurred by corporations have come to be assigned to local residents.Additional points are the following:
・The financial situation varies from corporation to corporation, for example, in terms of the possession of a hospital or the year of the university’s foundation.
・The assets and operating profits, administrative activities, and investment and financial activities of corporations as well as the results of these activities are correlated.
The financial analysis of public university corporations has just started. There is a need for more detailed research designed to explore the substantial implications.
