While the University is in a stable financial position and has a top credit rating, it could stand to see improvement in its cash on hand and ability to pay off annual debts, according to a recent rating from Moody’s Investors Services.

According to its website, Moody’s Investors Service provides credit ratings, research and risk analysis for institutions’ various financial sectors. Moody’s provides an analysis of credit risk and ratings, drawing on industry outlooks, special reports and institution-specific context.

The rating, released on Moody’s website late last month, explains that the University’s rating could be upgraded if it improves its liquid assets available, like cash, and its ability to cover annual debts and interest payments. Even with these areas for improvement, Moody’s still gave the University an A1 rating — one of the top credit ratings available — which indicates that the University has enough financial backing to pay off its financial obligations without defaulting. Institutions given an A1 rating are rated as upper-medium grade with a low credit risk, according to Moody’s.

The A1 rating “reflects Brandeis’ favorable market reputation as a highly selective private research university situated in the Boston metropolitan area with healthy student demand, strong fundraising, and manageable financial leverage,” the website notes.

The rating also described the University’s financial outlook as “stable,” explaining that Brandeis benefits from consistent donor support and student demand, with manageable future capital and borrowing plans in order.

However, challenges that potentially offset the University’s financial success include competition from elite peer universities, narrow liquidity and thinly balanced operations. In other words, there is a slim margin between the costs associated with operating the University and the revenue gained from operations. If the University’s liquidity weakens, or if its operating performance worsens, Moody’s could downgrade its rating.

Moody’s downgraded the University’s rating from Aa3 to A1 following the 2009 recession, during which the University took a hard financial hit to its operating profit and endowment. An Aa3 score, the fourth highest on the scale, indicates that an institution has a high quality rating and poses a very low credit risk with the best ability to repay short-term debt, according to Moody’s.

University President Ron Liebowitz told community members in September that the University’s finances have been declining for several years, with Brandeis drawing a relatively high annual amount from its endowment, according to a Sept. 27 Justice article.

In an open meeting with students, economist and financial consultant Kermit Daniel explained that the University has been employing unsustainable financial measures, according to the article.

In turn, these practices have caused the endowment’s growth rate to fall as operating costs rise due to decaying infrastructure.

Liebowitz has vowed to address the University’s long-term deficit in the coming months while remaining transparent about the financial steps Brandeis will take along the way. However, Liebowitz has emphasized that the University will not raise tuition rates in order to combat these financial imbalances.

There is “little more we could do to generate more revenue from tuition,” Liebowitz wrote in an emailed statement to the Justice in September. “Our annual increases need to be reduced over time, lest we price out too many excellent students from applying to Brandeis. Ideally, we need to reduce our dependency on tuition and reduce annual increases. That’s a goal.”