Background: The financial analysis of the financial balance sheets is a critical procedure and a “prophetic” technique that sheds light on its latent or non-fold aspects of an economic unit. It aims at analyzing, assessing and profoundly understand of its financial status, extracting useful conclusions that will help its management to take the appropriate decisions for its viability in the future.
Aim: The financial analysis of the largest private neuropsychiatric clinics in the region of Thessaly, Greece, for the period 2010-2014, during which the country faced severe economic destabilization and, within the framework of the fiscal stability programs to rationalize health expendure, significant changes had been instituted that had adversely affected their financial situation.
Methods: The selection of private neuropsychiatric clinics was based on their turnover in the year 2013. The sources of information and their financial data were the published financial statements, their corporate websites and the sectoral studies of the ICAP Group and Stochasis S.A. For the financial analysis, the ratios method was used and more specifically the liquidity, activity, profitability and capital structure financial ratios.
Results: The selected private neuropsychiatric clinics lost a significant part of their turnover, following the downward trend of the sector and their difficult financial situation that threatens their sustainability, in their majority, was also confirmed by the bankruptcy probability prediction model (Altman’s Z-Score). The main causes of negative economic outcomes were the economic recession, the clawback/rebate mechanisms, the delay in compensation of the services provided by National Heatlhcare Organisation, as well as the decline in the citizens’ income, which has compulsorily turned them to public health service structures.
Conclusions: The Management of the chosen clinics must receive development-type initiatives and exploit the opportunities, presented by the rise of mental illnesses and life expectancy, in order to improve their financial figures, increasing their liquidity, efficiency and profitability.
Keywords: Altman’s Z-Score Model, Economic Crisis, Financial Analysis, Financial Ratios, Mental Health, Private Neuropsychiatric Clinics.