Compared to colleges and universities in the state, Kent State’s financial strength is secure.

Since 1997, Ohio’s higher-education institutions have been required to submit their financial information to the Board of Regents, said David Creamer, vice president of administration. The Regents then compile a ratio of assets to debts and evaluate the overall situation at each university.

“Ratios are used to give the organization an understanding of how strong it is performing financially,” Creamer said.

This year, Kent State ranked second in the state for financial performance, with a 4.4 out of a possible 5, Creamer said. Shawnee State had the highest ranking.

The higher a school’s overall score, the stronger it is financially, Creamer said. This is done using proportions rather than actual monetary amounts, so a smaller school, such as Shawnee State, can be compared to a larger school, such as Ohio State.

The composite score combines three categories: viability, net income and primary reserve, said Neal McNally, assistant budget director for the Regents. The viability score measures how effectively a university can manage its long-term debt; the net income score measures a university’s expenditures versus its income; and the primary reserve estimates how long a university can continue to operate at its current levels.

The ratio policy began so the Regents could keep a “watchful eye” on universities, Creamer said. Before this policy began, a school had gone bankrupt without anyone realizing it was going to happen.

If a school has a score of 1.75 for two years, the Regents will step in, McNally said.

Contact administration reporter Rachel Abbey at [email protected].