As we head towards the holiday season, it’s time to reflect on another challenging year and look forward to a successful 2022!
Thank you to the schools that participated in this year’s Somerset Education Financial Survey for Schools (FSS). We again had over 600 schools in the survey representing 71% of enrolments in Australian Independent schools.
The data from the survey indicates the Independent Schools sector is sustainably navigating these challenging times with the 2020 school-year data indicating:
- 1.7% increase in enrolments which is the highest since we started recording this metric five years ago
- Maintaining a five-year average Net Operating Margin of 13% (relative operating surplus)
- Debt relatively unchanged at $8,400 Debt per student
- Stronger Working Capital Ratio of 1.3, and
- Our new measure indicating an average 2.9 Months Expenditure held in Cash Reserves.
During 2020 schools appeared to look for operating savings and held off on capital investment to wisely conserve resources. I suspect 2021 and beyond will show some catch up.
I encourage schools to carefully manage risk during these uncertain times by:
- Using the FSS to analyse trends in your school’s key metrics, identify and quantify operational strengths and weakness to inform strategy
- Modeling strategic scenarios at least five years into the future using the Somerset School Budget Model and Somerset Key Indicator (SKI) Report, and
- Actively monitor actual to budget performance on a regular basis using our one-page Board Report, responding to adverse variations in a timely manner.
I thank the Somerset Education Team for sharing their skills to provide a professional and personal service to our school clients. I value being able to call a business and talk directly to a real person to assist with a query and trust that has been your experience with us. I sincerely hope we helped your school to govern with confidence.
The office will be closed from 5pm Friday 17 December 2021 and re-opening on Monday 17 January 2022. However if you have queries during this time, please email or call us on 1300 781 968 and we will do our best to respond in a timely manner.
Best wishes for a safe and joyful year-end rest and a successful 2022!
John and the Team
John Somerset is a Chartered Accountant. He has extensive knowledge of the independent school sector and is past President of Independent Schools Queensland and a past board member of the Independent Schools Australia.
Somerset Education Breakfast Seminar Series 2022—Webinar, 2022 dates to be advised (7am-9am).
Australian Conference of Lutheran Education—Conference, 6-8 July 2022, Melbourne, Victoria.