Analysis of financial statements of Japanese private hospitals (1982- 1991)

Abstract

In order to clarify the financial situation of Japanese private hospitals, the financial statements provided by the Social Welfare and Medical Service Corporation were analyzed for the period from 1982 and 1991. The results clarified the low growth rate and low profitability of the Japanese private hospitals, although their financial situation was relatively stable. However, the efficiency of cost has been stalled in recent years and profitability has been declining due to the low turnover rate of capital. According to the CVP analysis, the Profit volume ratio of the investigated hospitals has been increased to the level of 95%. This situation means that, in the current financial situation, more than half of the Japanese private hospitals will go into the red if revenue declines 5% due to some short term change in the managerial environment.