Evaluation of the Financial Condition of a Healthcare Institution

Abstract

The article is dedicated to diagnosing the financial position of a healthcare institution. A purpose of the article is to present outcomes of the 2020-2022 financial position analysis for the I. I.  Mechnykov Dnipro Regional Clinical Hospital Municipal Enterprise of the Dnipropetrovsk Regional Council. The authors have applied the main methodical approaches of the financial analysis: the comparison used to compare current year data with those of basic and previous years; the information grouping method - dividing a set of examined financial indices into homogenous groups by a single feature for determining the structure and a share, as well as establishing an interrelation between the examined financial indices; the table method - expressing financial analytical data in the table format. The authors have researched contemporary approaches to defining the enterprise financial position essence and have formulated a general definition for this notion. The authors have done the complex analysis of the financial position for the I. I. Mechnykov Clinical Hospital, have researched the dynamics and structure of property, equity sources, receivables, payables, and provisions, have disclosed liquidity and solvency ratios, have analysed profits and losses alongside elements of the hospital’s operating expenses on the basis of collected information in the process of undergoing a practical training at the medical institution. Initial data have encompassed balance sheets, profit and loss statements, and annual financial report appendices of the I. I. Mechnykov Dnipro Regional Clinical Hospital Municipal Enterprise. Drawing on the above-mentioned analysis, the authors have developed recommendations aimed at enhancing the financial and economic position of the hospital and extending its monetary incomes. It is expedient to increase the amount of inventories since their share in current assets decreased as of the end of 2022 compared to 2020. The authors recommend extending a list of paid services delivered to the population. This step will ensure transferring additional monetary funds to the hospital’s bank accounts. Within 2021-2022, the hospital hasn't been purchasing fixed assets at the expense of its own funds. Hence, it is expedient to ensure their transfer in the coming years, taking into consideration that medical equipment and tools are permanently renovated and improved, and the possessed ones get depreciated and amortized. A positive tendency is the build-up of the capital construction at the expense of extension, alteration, and major repairs of the health care facilities. Implementing the suggested recommendations into the practical activity of the hospital will foster the improvement of its financial and economic position.