Case Study: Devry Education Group Inc.

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Financial Health
(All Figures found in Appendix)
DeVry Education Group Inc. earned approximately $2M in revenues in fiscal year 2013, with net income of approximately $64M. The overall financial health of the company, valued by the company’s liquidity, leverage, efficiency, and performance ratios, is stable. The liquidity, measured by the current ratio, displays higher performance than the Industry, and thus exhibits overall low risk with a ratio greater than one (Figures 1 and 2). The ‘Industry' is defined as Colleges, Universities, and Professional Schools (NAICS code: 611310) in the U.S. Figure 3 depicts that the company has been steadily minimizing its debts over the past ten years. Devry has significantly lower debt-to-equity ratio than the industry (Figure 4), which may mean that the company is not leveraging its debt or is not fully utilizing its borrowing capabilities.

Devry is efficient in its operations, measured by the total asset turnover and receivables turnover ratios. The company has lower total asset turnover than the industry (Figure 6), although not significantly, meaning Devry is not utilizing its assets as efficiently as other industry participants to generate sales. The company’s balance sheet shows that Devry has been acquiring more land, buildings, and equipment over the past ten years. The lower asset turnover ratio may suggest that Devry is acquiring unnecessary properties or facilities, which are not helping in their revenue generation. However, a closer look at Devry’s individual trend over the years (Figure 5), suggests that the asset turnover performance has been steadily increasing at a rate of 2.9%, meaning the company has been using its assets more efficiently. The receivables turnover is significantly higher than the industry levels (Figure

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