Budget & Planning

The Composite Financial Index (CFI) is a comprehensive metric used to assess the overall financial health and stability of Texas State University. It combines several key financial ratios into a single score, providing a holistic view of the university's fiscal condition. These ratios often include:

• Primary Reserve Ratio: Measures the financial strength and flexibility by comparing expendable net assets to total expenses.
• Net Operating Revenues Ratio: Assesses the extent to which operating revenues exceed operating expenses, indicating the university’s ability to generate surplus funds.
• Return on Net Assets Ratio: Evaluates the overall return on the university’s net assets, analogous to return on equity in the corporate sector.
• Viability Ratio: Examines the university's ability to cover its long-term debt with available resources.

By integrating these ratios, the CFI provides a balanced score that reflects the university's capacity to maintain financial sustainability, invest in improvements, and weather economic fluctuations. While embedded in the CFI calculations, Available Reserves help the university understand what funds that an institution has that can be readily accessed for unforeseen expenses, strategic initiatives, or emergencies. They are crucial for ensuring financial stability and operational continuity.

The budget model redesign initiative represents a strategic transformation aimed at optimizing financial management and resource allocation within the organization. This initiative is motivated by the need to enhance transparency, efficiency, and alignment with the organization’s strategic goals.  Key components include:

• Stakeholder Engagement: Involving key stakeholders throughout the redesign process to ensure that diverse perspectives are considered and that the model meets broad organizational needs.
• Data-Driven Decision Leveraging data analytics to inform budgeting decisions, ensuring that resource allocations are based on robust evidence and predictive insights.
• Technology Integration: Utilizing budgeting tools to facilitate accurate forecasting, real-time tracking, and comprehensive reporting.

The budget model redesign initiative is a forward-thinking approach to financial management that promises to deliver substantial benefits to the organization. By fostering transparency, efficiency, and strategic alignment, the initiative will position the organization to better achieve its mission and objectives.