The purpose of this study was to determine if a set of twelve financial ratios developed from revenue and expenditure characteristics of Indiana public school corporations in 1998, 1999, and 2000 could forecast a district's financial condition in 2001 and 2002. The study was limited to the statutory general fund which finances a district's day-to-day instructional expenditures. A district's financial status was determined by computing a composite financial status ratio (CFSR) using the district's annual net revenues and expenditures for 2001 and 2002. The relationship of twelve independent variables was examined with the CFSR continuum using multiple linear regression analyses. The population of the study included 286 of the 293 public school corporations in Indiana. The findings of the study found: (1) 94.4 percent of Indiana's public school corporations were considered non-financially distressed and 5.6 percent were considered financially distressed; (2) four independent variables were identified as significant and practical predictors of a district's financial condition: annual spending, December 31st encumbered cash balance, biannual spending, and annual expenditures/ADM ratios; (3) three independent variables were significant; however, the variables were not considered functional predictors of a district's financial condition: personnel/annual expenditure, certified instruction/personnel expenditure, and local property tax/annual revenue; and (4) four independent variables were not significant and were unable to predict a school district's financial condition: December 31S` net cash balance, employee benefit/annual expenditure, student growth, and school size impact factor ratios. The conclusions indicate: (1) financial ratios can be utilized by administrators to forecast a district's financial condition; (2) several financial ratios capable of forecasting a district's financial condition are under the management control of administrators; (3) financial ratios vary in the period of time they are capable of predicting a district's financial condition; (4) all statistically significant financial ratios may not be consistent predictors of a district's financial condition; (5) not all financial ratios serve as predictors of a district's financial condition even though the ratios provide important financial information; and (6) combined multiple year financial data, in addition to single year data, can be utilized to enhance the model's ability to predict a district's financial condition. / Department of Educational Leadership
| Identifer | oai:union.ndltd.org:BSU/oai:cardinalscholar.bsu.edu:handle/179481 |
| Date | January 2004 |
| Creators | Pearson, Joseph R. |
| Contributors | Sharp, William L. |
| Source Sets | Ball State University |
| Detected Language | English |
| Format | xii, 331 leaves ; 28 cm. |
| Source | Virtual Press |
| Coverage | n-us-in |
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