Profitability versus Debt in Hospital Industry
Profitability versus Debt in Hospital Industry

Author(s): Agnieszka Bem, Paweł Prędkiewicz, Paulina Ucieklak-Jeż, Rafal Siedlecki
Subject(s): Business Economy / Management, Economic policy, Health and medicine and law
Published by: Masarykova univerzita nakladatelství
Keywords: hospital; profitability; debt; financial management;
Summary/Abstract: The paper examines the relationship between profitability of hospitals and their debt ratios. The main objective is to investigate, whether hospitals use debt as a source of funding, in the absence of sufficient profits from operating activities. Using statistical methods, we have proved a negative relationship between the profitability measured on many levels (ROA, EBIT margin, EBITDA margin) and hospitals' total debt ratio. On the other hand, we have found a positive relationship between the debt and profitability, taking into account only short-term and long-term loans and credit.

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