Project OnFinancial Analysis On Private Health Sector

( A Case Study On Apollo Gleneagles Hospital Kolkata )

M.COM in Finance,Accounting & Control

OBJECTIVE

Objective of the project is to analyse the financial strength of Private Health Sector

and their future prospect.

Area Chosen For The Project –Private Health Sector (Apollo Gleneagles Hospital Kolkata)

Prosperity of Private Health Sector Lack of services rendered by Public Health Sector. Public sector services also need high amount of expenditure due to different activities involved in medical treatment without the satisfaction of patient and patient related parties.

Detail Of Organization Management- Apollo Gleneagles Hospital (kolkata) is a : 1) 325 bed multi speciality hospital. 2) Its spread across a lush landscape of 8.5 acres and is equipped with the latest generation diagnostic and treatment facitities. 3)It’s a joint venture between Asian Healthcare giants Apollo Hospital and Parkway group of Singapore. 4) It serves as a healthcare hub for East and North East India, Bangladesh, Myanmar, Nepal and Bhutan.

Special Features:

First in Eastern India to introduce the concept of 'Full Time Consultants The only hospital in Kolkata with a well-equipped Emergency Department that houses a state-of-the-art Operation Theatre First in Kolkata to install the latest version of the Siemens Digital Cath (Axion Artis) First in Eastern India to inaugurate a state-of-the-art Laser Clinic for the Department of Dermatology Well-equipped 'Renal Transplant Unit’.

SERVICES RENDERED

HEALTH SERVICES VALUE ADDED SERVICE

24 HRS. PHARMACY24HRS. AMBULANCE SERVICES24 HRS. DIAGNOSTIC SERVICES

CURRENCY EXCHANGE FACILITYTRAVEL ARRANGEMENT

UTI ATM COUNTERCAFETERIABOOK SHOP

GUEST LAUNDRYINTERNETSTD/ ISDN

EXTENSION OF VISA

METHODOLOGY

Project done on secondary data collected from different annual report of the organization and from websites

METHOD APPLIED FOR FINANCIAL ANALYSIS

Comparative analysis

Segment reporting

Trend analysis

Ratio analysis

Based on Balance sheet year 2006,2007 and 2008

COMPARATIVE ANALYSIS OF FINANCIAL STATEMENT FOR 2006-07

SL NO.

PARTICULARS 31.3.2006 31.3.2007 CHANGE % OF CHANGE

1 NET SALE/INCOME FROM OPERATION

7596 9495 1899 25

2 OTHER INCOME 95 71 -24 -25.26

3 P/L BEFORE EXTRAORDINARY ITEM,TAX

673 915 242 35.96

COMMENT:Though the income from other sources is of negative trend, but

the actual income from business is increasing nature i.e. @25%.And the actual net profit from the business is increasing at the rate around 36%.It shows the capability of earning of its own. It will make the business financial viable.

COMPARATIVE ANALYSIS OF FINANCIAL STATEMENT FOR 2007-08

SL NO.

PARTICULARS 31.3.2007 31.3.2008 CHANGE % OF CHANGE

1 NET SALE/INCOME FROM OPERATION

9495 12147 2652 28

2 OTHER INCOME 71 253 182 256.34

3 P/L BEFORE EXTRAORDINARY ITEM,TAX

914 1189 275 30.09

Comment: The above statement shows income from operation increased by 28% in the year 2008 and income from other sources increased by 256.34%.Profit before tax increased by 30.09%. . It shows basic operational activities have been increased and as a result income from operation and other expenses increased in the year 2008 through rate of increase in expenditure is higher than the income. Profit before tax shows a satisfactory level i.e 30.09%. From the above chart it can be concluded that overhead expenses increased and overhead expense control measures should be taken to minimize the cost otherwise it would be a burden in future. Profit before tax is at satisfactory level for the firm.

Segment Reporting

ITEM CAPITAL EMPLOYED

% OF CHANGE IN 2006-07

% OF CHANGE IN 2007-08

HEALTH CARE SERVICE

3.66 36.43

PHARMACY 100 130.89

OTHERS -30.31 198.52

For 2006-2007Capital employed in health care services increased by 3.66%, in case of

pharmacy capital employed increase by 100% in 2007 i.e pharmacy department has been opened in the year 2007, in case of others percentage of capital

employed has been decreased by 30.31%. It shows firm, in the year 2007 has been given special attention in case of pharmacy as well as health care services.

For 2007-2008Capital employed in health care service, in pharmacy and in other sector has been increased by 36.43%, 130.89%, 198.52% respectively. From this chart

it can be concluded that pharmacy and other department has got special attention in the year 2008 and healthcare service department also has got

attention than in 2007

Comment

TREND ANALYSISPARTICULARS 2006 2007 2008

NET PROFIT 100 136 177

EPS

BASIC 100 116.82 130.31

DILUTED 100 117.47 127.86

CAPITAL EMPLOYED

100 98.47 169.49

COMMENT:By analyzing trend, net profit shows a stable

increase in three years .EPS, both – basic and diluted as also increased in three years trend.

Capital employed shows an increment in the year 2008. From the above chart the conclusion are, the

earning capacity of the business is high and investment or reinvestment produce is also good.

Ratio Analysis

PARTICULARS 2005-06 2006-07 2007-08

EPS (Rs) 86 174.20 139.10

RETURN ON INVESTMENT (%)

12.005 15.122 09.401

GROSS PROFIT RATIO (%)

50.91 50.41 50.12

NET PROFIT RATIO (%)

06.050 09.646 07.087

Comment: EPS – Increasing tendency in the year 2006-2007 shows better performance and prospect of the company. It enhances the possibility of more dividend or bonus shares. Ultimately this has a favorable effect on the market price of shares. In the year 2007-2008 there is an adverse effect of EPS.ROI – In the year 2005-2006 ROI shows an efficient performance of the firm. But in 2007-2008 it shows lack of efficiency in financial decision.Gross Profit – G/P of the firm shows a declining rate and inefficiency of the management. If we take the G/P ratio as stock inventory control ratio, it shows difficulty in the realization of fixed overhead of the business. The management o the firm should take special attention in case of inventory and sales management area.Net Profit – It shows an incrase in the year 2006-2007 and decrease in the year 2007-2008. From this ratio it can be concluded that operating efficiency of the organization has been decreased in the year of 2007-2008.

FINDINGS

Organization also financially viable in all service rendering activities/segment and I think it would be beneficial in terms of cost to the general persons though the cost is minimum in public sector but service providing activities is much more compared to public sector.

CONCLUSION

Private health sector with special reference to APOLLO GLENEAGLES HOSPITAL (Kolkata) is growing well in terms of business activities and financial viability. Though this type of organisation is better for those patients who have financial ability or financial awareness, then the patients will be more interested in getting more services.

THANK YOU