Analysing the financial viability of a private higher education institution

Abstract

This study analysed the financial viability of a private higher education institution (PHEI). It focused on a specific private higher education institution, emphasising operational cost, gross and net profits, and financial ratios. It assessed the current financial status of the private higher institution market. Further analyses were conducted of the current pricing structure of the private institution, Academic Institute of Excellence (AIE), and how the institution compared with other private higher institutions. The case study research design was established on an in-depth review of a specific group or event – in this case, AIE. Combined with a literature review, the investigation created a strong image of the financial viability of a private higher education institution. The study found that AIE is a financially viable private higher education institution; they made a positive net profit and four out of the six faculties also generated a profit. Annual enrolment numbers across all faculties increased significantly. Regarding the comparative pricing study with other private higher institutions in the same region as AIE, the study showed that AIE is well priced regarding their competitors with similar qualifications.