In times of financial crisis, low enrolment courses are usually targets for removal. But removing the wrong courses could lead to a worse financial position!
Due to the financial impacts of the current pandemic, institutions are taking a serious look at all of their programs and courses to determine their financial performance. The typical targets for review are low enrolment courses but the big question is, how low is low? Some low enrolment courses could still be making a positive margin.
To figure out which courses to review, you need to understand the break-even point and to calculate this properly you need know your direct and overhead costs and also your variable and fixed costs.
It’s also very important to understand that a course that appears to be losing money can still be covering its direct costs and contributing towards some of the overhead, just not all of it.
Removing these courses without fully understanding their contribution to the overall school bottom line could actually lead to a worse financial position.
In this video we’ll show you how to undertake this type of analysis.