Concordia University - St. Paul (MN) presents an exceptionally strong financial profile.

Um, so we'll start with Concordia St. Paul. Concordia. So again, you can— so I can type, you can type, um, start typing the school that you want to look at and it will filter down. Um, again, if you're new to this app, the blue line is the school that we're studying, and we have two different graphs here so you can see some side-by-side comparisons of different— it comes in handy when we look at, say, revenue versus expenses growth or something like that. Another thing to keep in mind is I have a set of closed schools here. These schools closed in either 2023 or 2024. The list of schools are here just to get a sense of what, what you really want to avoid in different financial metrics, like what's really bad. And you also have your guides here for the percentiles. This is the median school in the country, the solid line. The dashed lines are the other percentiles. Of course, median is 50th percentile. This is the 75th percentile here, and this is the 25th. All right, ideally you would stay right in that band or really close to the median on really all of these metrics. That's really the ideal, what you want to see from your school. Okay, but in some cases more is better, potentially. We'll take a look here. So here's Concordia St. Paul. They have had, actually I would have been not happy with this. This is not a case where more is better. This is their net income margin. And so that's simply their— really the easiest way to think about it is their profit divided by operating revenue, right? And this is a nonprofit. So these really should hover really close to about 1% every year. And they were above 10% for a long time, which is not ideal. It generally indicates to me that the school is not investing potentially fully in its mission, which is a problem for a nonprofit institution. It looks like they got that back under control here. They're much closer to the the normal net income margins, although still must be part of their sort of culture there to keep those higher. But having a positive value is definitely better than negative. I'm not going to— we see a lot of negatives there. Yeah, we see a lot of negatives. In fact, eating school went negative in '23. The 2024 data is not all in, but I think it's going to be negative again this year, although slightly better. So yeah, you want to keep that at plus 1% or so, right in, right in that ballpark. And of course, uh, the cash flow from operating activities needs to be positive. Otherwise you're gonna have to borrow or sell stuff just to pay your payroll. Um, and that is again, not ideal and not sustainable. Uh, schools that are closing are running net cash deficits from operations every year, basically, uh, for many years. I shouldn't say this, actually, we have the data here where they have positive. For some of these, but the really went poorly for them towards the end of their life here, and that's what ended up killing the school. They don't have a lot of reserves in some of these cases. And, um, yeah, when you can't make payroll, that's the end of the line for you. Um, okay, so they're looking good. They're positive net income, positive cash flow. That's excellent. Uh, let's take a look at the next thing I like to look at is, uh, revenues over time versus expenses. And you can see, I believe, some very strong net, net, that's net tuition revenue. I'm going to do overall operating revenue. I'll show you that in a second. Total operating revenue and expenses. Okay. So their total operating revenues are up 66% since 2016. That is excellent. That's probably one of the best in the country. So school's doing great with revenue growth. Again, the median revenue growth for schools since, uh, 2016 is about 21% growth. They're at 66%. That's excellent. Um, and the school is just growing, right? They've grown their expenses. Actually, I showed you on the previous graph that they had actually maybe an underspending issue. It appears they've fixed that quite a bit. Their expenses are up 77% and their revenues are up 66%. They still have a positive net income, Exactly what, you know, I would hope they would do to sort of get that net income back to normal, invest in their mission, and keep having positive net income. That's exactly what they're doing. So excellent growth here for this school. Show you net tuition revenue. Again, probably one of the best schools in the country in terms of net tuition growth. It's up 73%. That is Incredibly good. Um, the median school's down a bit on that tuition revenue, which is, you know, that's the pressure in higher ed that you're seeing. Um, a key operating revenue for most schools being down is problematic. Um, if you don't have an endowment, that's really going to be your main life source, right? And so those schools that have very small endowments are not seeing revenue growth and they're seeing expense growth. With inflation and everything else. So that's putting a lot of pressure on their financials. But that is not the case at Concordia St. Paul. I will say this about St. Paul. Be a bit careful. They're kind of the poster child, so to speak, for tuition resets. And I dug into this a little bit and I actually, you know, think somebody should say a lot more about this because it's a lot more complicated at St. Paul than just, oh, they did a tuition reset and their net tuition took off. They did their tuition reset back in 2013 and take a look at their net tuition revenue. It doesn't really take off until, I mean, really you get the spike in 2021. So the correlation between their tuition reset and their net tuition revenue is not exactly as tight as a lot of people want to make it out to be. Interesting. Another thing is their net tuition reset, their tuition reset is not the type of tuition reset that most people think about. They actually reduced their net price, right? Which seems counterintuitive, right? They actually reduced the price that kids, that students pay to go to the school. Um, a traditional tuition reset is not doing that. It's just reducing the sticker price and keeping that out-of-pocket price the same for the students. So they sort of get the illusion that they're going to pay less, but they don't actually pay less. So that's not what Concordia did. They actually significantly reduced their net price. Interesting. Probably worked out quite well for them because their net price was actually high at the time when they did that. That's a whole other analysis that you can see in our Strategic Compass. I made one for them a while back because I was very curious about this sort of poster child case for tuition resets. And I don't think it should be a poster child case because it's not a tuition reset in sort of traditional sense. Let's take a look at their endowment. Endowment, uh, change in endowment. Their endowment's growing nicely, up 83% since 2016. So what does that probably tell us about how they're managing it? They're doing well. And there's lots of different levers there. One is your appropriations, which is something I keep tabs on because you worry about schools that are financially struggling. They'll start drawing more than normal from their endowment and their endowment will either shrink or just be stagnant. You can see the story here. What's one of the reasons why this endowment is growing so well? Their endowment draws are quite low. They're basically about half of what is normal, a normal draw. A normal endowment draw is about 4, 4.5% of your current year end-of-year endowment value. And they're at like 2%. So median, again, 4%. So their endowment is going to grow quite well because of that. Yeah, there's— I mean, there's other things to check here. The CapEx— the school is not struggling financially. You can see again, CapEx, you want that to be relative to depreciation. You want the CapEx spending to be a little bit above depreciation so that you're growing your property and equipment, your technology over time. You're covering any, any depreciation expenses which are real expenses. These are not just made up by an accountant. Depreciation is, uh, an expense like your shingles on your house, uh, getting older and older every year, right? That's an expense for you that you don't necessarily pay today, right? You pay it when you replace the roof, but you need to account for that in your current year expenses. Um, so it's a very real expense. You can't ignore it. Um, but yeah, they're doing a good job of covering their— their— this is 2, this is 1.6. You know, again, the median's just above 1. That's exactly where you would expect to be, uh, if you're going to just cover your depreciation enough and grow their capital stock a little bit. And I'll show the final thing on them. Their capital stock has grown quite a bit. This is their property and equipment, up 41%. Again, this school is really growing, um, and prospering. And but again, I do— don't, um, don't mistake this for completely attributable to a tuition reset. I would argue actually it was not a tuition reset at all. It was a very different policy that actually reduced the price, the net price, which is not a tuition reset in the sort of traditional sense.