Page 93 - DUT Annual Report 2020

Current Ratio
The current ratio indicates the University’s ability to settle its current liabilities from its current assets. The current ratio of the University is 8.94:1 (2019: 11.59:1) which exceeds the accepted norm of 2:1.
Cash Ratio
The cash ratio effectively compares cash and cash equivalents with total current liabilities. The University’s cash ratio is 7.59:1 (2019: 10.17:1).
Solvency Ratio
The solvency ratio measures the ability of the University to meet its long-term financial obligations.
Total Assets (less Property, plant and equipment) to Total Liabilities
The University’s ratio is 2.25:1 (2019: 2.17:1). This is greater than the norm of 1:1 which is indicative of the financial stability of the University. The formula used excludes Property, Plant and Equipment (PPE) and intangible assets because it is generally very illiquid.
Debt Equity Ratio:
The ratio indicates the degree of financial leverage being used by the University and includes both short- term and long-term debt. The debt equity is 11% (2019: 10%), which is below the 50% borrowing limit as per the University’s policy.
Debt to Assets:
This ratio quantifies the percentage of the University’s assets that have been financed with debt. A higher ratio indicates a higher degree of financial leverage, and consequently, financial risk. Total debt to total assets ratio is low at 33% (2019: 34%).
Ms NF Dhumazi
Chief Financial Officer
Interest Cover Ratio
This ratio measures the University’s ability to meet the interest expense on debt. The higher the ratio, the better the University’s ability to meets its interest obligation. The interest cover is 81 (2019: 79).
Other relevant council controlled industry ratios
DURBAN UNIVERSITY OF TECHNOLOGY ANNUAL REPORT 2020
2020
2019
Norm
Personnel cost to unrestricted re- current income
52.36%
51.11%
58% - 62%
Personnel cost as % of unrestricted re- current expenditure
66.05%
64.64%
-
Subsidy as % of total income
52.19%
50.67%
-
Academic to non- academic personnel costs
55:45
56:44
60:40
Repairs and maintenance as % of total expenditure
2.77%
2.82%
3%
Outsourced services as % of total expenditure
5.44%
5.98%
3.5%
CONCLUSION
The financial sustainability of the University is a key perspective of the University’s strategy “ENVISION2030”. We are pleased to report that the University is a going concern and assets fairly valued exceed its liabilities. Based on the strong financial position, the Executive Management is satisfied that the University is adequately funded and will continue to exercise its mandate successfully in 2021 and beyond.
Mr B Singh
Chairperson of the Finance Committee
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