AN ANALYTICAL STUDY ON FINANCIAL

PERFORMANCE OF INDIA’S TOP

PRIVATE HOSPITALS FOR THE FY:2014-
15

Dr. ANJALIE CHAURASIA

142803017
MHA 3rd SEM
GUIDED BY: Mr. LUMEN SHAWN LOBO
ASST PROFESSOR,
DEPT OF COMMERCE
 INTRODUCTION
• According to Drake (2010), Financial Statement
Analysis is the selection, evaluation, and
interpretation of financial data, along with
other pertinent information, to assist in
investment and financial decision-making.
• Financial ratio analysis simplifies the
understanding of financial statements Profit
and loss accounts & balance sheet.
• Private health sector has seen a dramatic
change in the past two decades due to
government policy reforms since 1991.
• The corporate hospitals like Apollo Hospitals,
Fortis Healthcare, Wockhardt etc have brought
in private capital, corporate organisational
structure and a chain of multi-speciality
hospitals to healthcare sector in India.
 NEED FOR STUDY

• There is a need to generate, analyse and

interpret financial performance of private
hospitals to meet the requirement of the
stakeholders.
• Financial ratio analysis can lead to a better
comparison amongst the chosen hospitals.
• Benchmarking to evaluate the success of the
hospitals and the Governments policy reforms.
• It can ease the management’s decision making
and lowering the risks associated.
• It can help to identify the areas where a
hospital needs to control costs and various
opportunities for improvement.
• It can help in discussing future growth and
development potential of a hospital.
 AIM
• To study the financial performance of India’s
top private sector hospitals for the FY:2014-
15.
 OBJECTIVE
• To find out the financial soundness of private
sector hospitals in India.
• To identify the key financial areas where such
hospitals have to focus.
• To compare and rank these hospitals on the
basis of their financial performance.
 RESEARCH METHODOLOGY
• Selection of the hospitals will be done
randomly.
• Using audited financial statements of 10
hospitals listed on the stock exchanges.
• The most suited financial ratios for healthcare
sector would be considered.
• Operating margin
• Total margin
• Cash flow margin
• Return on equity
• Net patient revenue
• Other operating revenue
• Total /fixed/current asset turnover
• Net income
• Cash flow coverage ratio
• Debt to capitalization ratio
• Capital spending
• Liquidity ratio
• Days cash on hand
• Current ratio
• Others: Occupancy rates, Average Length of Stay
 REVIEW OF LITERATURE
AUTHOR TOPIC METHOD OUTCOME
RAMESH BHAT, Financial health of private Exploratory
India sector hospitals in India. analysis using
financial ratios.
Flex Monitoring Financial Indicators for Questionnaire
Team Critical Access Hospitals . survey
Developing Financial
George H. Pink Benchmarks for Critical
et al. Access Hospitals.
Virginia Suarez, Making the Case for Using
et al. Financial Indicators in Local
Public Health Agencies.
TL Zeller, BB A new perspective on
Stanko, WO hospital financial ratio
Cleverley analysis
 REFERENCES
• Making the Case for Using Financial Indicators in Local Public
Health Agencies ; Virginia Suarez, MPH, Cheryll Lesneski,
and Dwight Denison, PhD (Am J Public Health. 2011 March;
101(3): 419–425).
• Financial health of private sector hospitals in India; Ramesh
Bhat(IIMA WP No.2006-01-01 January 2006)
• Private sector in indian hospital industry-a review; Naresh
Vashisht, Puneeth Jain (IJTBM) 2013 Vol No2 Issue No3 Jan-Mar.
• Financial health of private sector hospitals in India:some further
evidence; Ramesh Bhat, Nishant Jain (IIMA WP No. 2006-04-08
april 2006)
• Financial Indicators for Critical Access Hospitals;
Flex Monitoring Team Briefing Paper No. 7, May 2005.
• Developing Financial Benchmarks for Critical Access
Hospitals; George H. Pink, George M. Holmes, Rebecca T.
Slifkin,and Roger E. Thompson (HealtH Care FinanCing
review/Spring 2009/Volume 30, Number 3 ).
• A new perspective on hospital financial ratio analysis; TL
Zeller, BB Stanko, WO Cleverley(JHFMA
12/1997;51(11):62-6)
• www.investopedia.com