VUT_Report 2018_Finale

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VAAL UNIVERSITY OF TECHNOLOGYANNUAL REPORT 2018SustainabilityThe VUT has considered that certain Operational and Liquidity ratios best demonstrates:Economic Sustainability:Operational Efficiency RatioCompares expenses to revenue 2018 2017A decreasing ratio is considered desirable since it generally indicates increased efficiencyOperating expense ratio = Operating Expenses Operating ExpensesTotal revenueTotal revenue= 1 572 181 565 1 419 816 1541 480 730 923 1 294 630 107= 1,06 1,10Liquidity Ratio2018 2017The VUT considers that there are three applicable ratios that are pertinent at this time.1) Determines the number of months the VUT could operate should all income streams dry upAdequacy of resources = Cash + accounts receivable Cash + accounts receivableMonthly expensesMonthly expenses= 778 626 175 661 559 982131 015 130 118 318 012= 5,9 months 5,6 months2) Determines if the University’s current assets will be able to cover current liabilitiesCurrent assets: Current liabilities = Current assets Current assetsCurrent liabilitiesCurrent Liabilities= 778 626 175 661 559 982560 477 888 365 277 086= 1,39 1,8125
VAAL UNIVERSITY OF TECHNOLOGYANNUAL REPORT 2018VUT would be able to cover its liabilities in the short-term.3) Determines if the University’s cash & cash equivalent will be able to cover liabilities in short-termCash Ratio = Cash and cash equivalent Cash and cash equivalentCurrent liabilitiesCurrent liabilities= 432 567 564 510 931 409560 477 888 365 277 086= 0,77 1,39The University’s cash and cash equivalent covers only 77% of the short-term liabilities of the University.Solvency Ratio2018 20171) Determines if the University’s total equity will be able to cover total liabilitiesTotal equity: Total liabilities = Total liabilities Total liabilitiesTotal equityTotal equity= 1 177 247 638 997 753 6051 088 528 062 1 095 185 677= 1,08 0,91The University’s equity does not fully cover the total liabilities of the University. This ratio is in a declining trend which is a warning signfor long-term sustainability especially when considering that it is unrestricted funds that are being depleted.2) Determines if the University’s total assets will be able to cover total liabilitiesTotal liabilities: Total assets = Total assets Total assetsTotal liabilitiesTotal liabilities= 2 265 775 700 2 092 939 2821 177 247 638 997 753 605= 1,92 2,09The University’s assets fully cover the total liabilities of the University.26
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VUT_Report 2018_Finale

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