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Financial Performance of Private Sector Hospitals in India:Some Further Evidence

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  • Bhat Ramesh
  • Jain Nishant

Abstract

This paper analyses financial performance of private hospitals. The study is based on financial statement data of private hospitals for the years 1999 to 2004. Using 25 key financial ratios, the study finds six key financial dimensions. These are: fixed assets age, current assets efficiency, operating efficiency, financial structure, surplus/profit appropriation, and financial profitability/operating cost ratio. The findings suggest that over the years hospitals have shown marginal improvement in financial performance. Though the total amount of debt is not high, it is the cost of debt and ability to service the debt which is making debt burden high for hospitals. The financial risks in this sector are high because of lower profitability and lower operating efficiencies. We discuss the implications of the results.

Suggested Citation

  • Bhat Ramesh & Jain Nishant, 2006. "Financial Performance of Private Sector Hospitals in India:Some Further Evidence," IIMA Working Papers WP2006-04-08, Indian Institute of Management Ahmedabad, Research and Publication Department.
    • Handle: RePEc:iim:iimawp:wp01950
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    File URL: https://www.iima.ac.in/sites/default/files/rnpfiles/2006-04-08rbhat.pdf
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    Cited by:

    1. Panayiotis Curtis & Theodore A. Roupas, 2009. "Health Care Finance, the Performance of Public Hospitals and Financial Statement Analysis," European Research Studies Journal, European Research Studies Journal, vol. 0(4), pages 199-212.
    2. Utkarsh Shah, 2010. "Private Sector in Indian Healthcare Delivery: Consumer Perspective and Government Policies to promote private Sector," Information Management and Business Review, AMH International, vol. 1(2), pages 79-87.

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