The University of Gloucestershire's annual accounts show it has turned a loss of more than £1m last year into a £5.5m surplus.
The university said it had prepared for changes in the further education market by cutting costs and increasing income.
An increase in overseas students and a buoyant undergraduate recruitment had also helped boost income.
It said it was confident of its future following changes in faculty structures and downsizing of its estates.
A university spokesman said the financial statement for 2009/10 shows there had been some constraints on spending in its library services, in student services and across every part of university life.
"Universities are changing - we are businesses which are part- funded by the public purse but also earn our own income.
"We are going to have to do a lot more of that in the future to offset the costs of higher education.
"The surplus was achieved by reducing cost - which was painful - with some job losses.
"We also trimmed some of our operations and have raised an additional income through commercial activity and additional fees of over £4.5m," he added.
The institution, which has seen 80 staff leave in the last year, is reducing its sites from four to three.