Higher Learning Commission Ratios- FY2006 thru FY2010 MCC's Ratios and CFI Score

Ratio and Description Ideal per HLC 2010 2009 2008 2007 2006

Primary Reserve Ratio .40 or better 0.506 0.470 0.469 0.475 0.505

This ratio indicates the amount of time during which an institution could pays it expenses - a .40 indicates would havethe ability to cover about 5 months of expenses from reserves.It means institutions operating at this ratio rely on internalcash flow to meet short term cash needs, are able to carry onreasonable facilities maintenance, and appear capable of managing modest unforeseen adverse financial events.

Net Operating Revenue Ratio 2% - 4% 4.90% 0.26% 6.00% 6.44% 1.36%

A positive ratio indicates the college experienced anoperating surplus for the year. The larger the surplus, thestronger the institution financial performance as a result of the year's activity. However, a large surplus may indicateunder spending on mission critical investments.

Return on Net Assets Ratio 3%-4% 6.00% -0.10% 7.40% 8.67% 1.77%

This ratio determines whether the institution if financially betteroff than in previous years by measuring total economic return.The ratio furnishes a broad measure of the change in aninstitution's total wealth over a single year and is based onthe level and change in total net assets. Thus, the ratio providethe most comprehensive measure of the growth or decline intotal wealth of an institution over a specific period of time.

Viability Ratio 1.00 0.743 0.637 0.823 0.741 0.992

This ratio measures one of the most basic determinants ofclear financial health: the availability of expendable net assetsto cover debt should the institution need to settle it obligationsas of the balance sheet date. The level that is right for the institution is institution-specific.

Composite Financial Indicator Score (CFI) 3 or greater 3.2 1.79 3.5 3.66 2.53

This ratio combines the four core ratios above into a singlescore. The combination, using a prescribed weighting plan,allows a weakness or strength in a specific ratio to be offsetby another ratio result. The CFI is useful in helping boardsand senior management understand the financial positionthat the institution enjoys in the marketplace.