Financial Analysis of Cpla

Financial Analysis - CPLA

Leilani Bloomquist

MBA6016

Finance and Value Creation

5724 Russell Avenue South

Minneapolis, MN 55410

Email: Leilani.bloomquist@capella.edu

Instructor: Dr. John Halstead

Abstract

Capella Education Company is a fully online university that offers bachelors, masters, doctoral programs, and certificates to adults. Capella University is the name of the university under Capella Education Company. They are a for-profit institution that competes with other for-profit online universities like University of Phoenix and Strayer University. Since they are a for-profit institution that is publicly traded, the organization has shareholders, which are very interested in the financials for the organization. Below is a summary of the Capella Education Company’s financial analysis.

Introduction

Capella Education Company is the parent company of Capella University, a publicly traded, for-profit online university offering 43 degree programs across all degree levels. Capella is based in Minneapolis, Minnesota and has over 36,000 students, 72% of which are enrolled in either masters or doctoral programs. The students come from all 50 states and 61 other countries or territories. Capella employs over 1500 faculty members and over 1200 staff members, and Capella Education Company (CPLA) is traded under the Education and Training Services segment of the market (Capella Education Company, 2013).

Financial Overview and Highlights

When looking at the return on equity for Capella Education Company versus the industry average, it is apparent that they are performing better than the industry average. The industry average for return on equity is 20.02% and CPLA has seen 66.70% and 88.27% for 2012 and 2011, respectively. It would be a clearer picture if we had five to ten years’ worth of trends to review; however, even looking at the downward trend in 2012, CPLA is still outperforming the industry average by 46.68%.

CPLA’s change in...