The multiplicity of variables describing the financial conditions of postsecondary institutions makes it difficult to assess changes in higher education finance from year to year and to find the relationship between these finance variables and average faculty salaries. This study sought to determine if a small number of factors could be derived to describe the financial conditions of postsecondary institutions in meaningful and understandable terms, and given the factors, to produce a linear model that predicts average salaries with acceptable precision. Data from the Integrated Postsecondary Education Data System (IPEDS) were manipulated using factor analysis and regression analysis procedures. Factor analysis reduced the 82 finance variables to a set of 10 factors that can describe the financial condition of postsecondary institutions with greater parsimony and measurable precision. The prediction of institutional salary averages using finance factors as predictors was found to have good implications for faculty groups. Attached to the paper are a data collection form for IPEDS, the rotated factor pattern, a list of variables with high loadings on the 10 factors, and sample budget analysis reports. (JDD)