Financial Statement Analysis of the Greek Private Health Sector Over the Last Decade (2002-2012): The Case of Diagnostic & Therapeutic Centre of Athens Hygeia S.A.

20 Pages Posted: 6 Oct 2014

See all articles by Georgios Loukopoulos

Georgios Loukopoulos

The Open University

Theodoros Roupas

University of Patras - Business Administration

Date Written: October 1, 2014

Abstract

The purpose of this study is to perform a comprehensive financial statement analysis for Hygeia, the largest Private Health Organization in Greece. In this regard, we employ a variety of theoretically advanced approaches. For instance, DuPont analysis based on the decomposition scheme of Nissim and Penman (2001), shows that the capital structure decisions eroded shareholder profits, and specifically their impact was pronounced after the outbreak of the global financial crisis. Considering the unique operating characteristics of the health sector and the hostile macroeconomic environment, working capital management performed generally well, but with a considerable margin for further improvements, if more responsible policies are followed. What is more, thorough analysis revealed that in the last years operating returns were consistently negative and operating cash return were unable to cover effective interest fixed costs. If the external environment does change favorably and if more importantly, the business model of Hygeia does not focus on significant operating improvements, the long term prospect of the organization may be questioned.

Keywords: financial analysis statement, Hygeia, ROE, ROA, asset turnover, profit margin Greece, private health sector, DuPont analysis, Nissim & Penman approach

JEL Classification: M41

Suggested Citation

Loukopoulos, Georgios and Roupas, Theodoros, Financial Statement Analysis of the Greek Private Health Sector Over the Last Decade (2002-2012): The Case of Diagnostic & Therapeutic Centre of Athens Hygeia S.A. (October 1, 2014). Available at SSRN: https://ssrn.com/abstract=2503875

Georgios Loukopoulos (Contact Author)

The Open University ( email )

Walton Hall
Milton Keynes, MK6 7AA
United Kingdom

Theodoros Roupas

University of Patras - Business Administration ( email )

Patras
Greece

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