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As principal of one of the institutions appearing near the top of some financial indicators and at the bottom of others, it might be helpful if I make some comments on aspects of your otherwise very helpful analysis ("Which university has the deepest pockets?", THES , July 13).

First, endowments are generally extremely restricted in the ways they can be used, and for older institutions the restrictions are often much broader than those you identified. In our case, for example, a surprisingly large amount is dedicated to funding prizes, often small in modern terms, for students; the investment earnings cannot be used for any other purpose. So a large endowment is not an indicator of the capacity to fund mainstream costs.

Second, the table of reserves is often widely misunderstood. Transfers to reserves are made under accounting rules being applied to sources and expenditure of funds, and do not necessarily refer to cash. In our case, as a result of the property transactions that you mention, we have made "book profits", in that the prices we received were greater than the value of the asset in the balance sheet. All proceeds have been used to pay for new buildings and no cash surpluses arose for transfer to cash reserves.

Finally, as always, any indicator is a snapshot in time; our position will change as soon as the refinancing arrangements are fully implemented.

Arthur Lucas
Principal
King's College London.