According to the 2023 Auditor-General’s report, the Trust Hospital Company Limited is experiencing serious financial difficulties as a result of its growing debt levels, raising questions about its stability.
According to the study, The Trust Hospital’s debt has increased to a startling GH¢54,382,095.
The hospital’s financial condition is made even more difficult by the fact that this debt, which was incurred through a variety of borrowings, must be returned with interest.
The hospital’s equity component has stayed at GH¢50,000 since 2010.
The debt-to-equity ratio is an astounding 1,087.64:1 as a result of the rising debt and static equity.
This ratio demonstrates how heavily the hospital depends on debt financing, putting its finances in jeopardy.
In response, the management of the hospital has suggested raising the capital structure’s equity component to the Social Security and National Insurance Trust (SSNIT), its lone stakeholder.
The objective of this idea is to stabilize the hospital’s financial structure and reduce the excessive levels of debt.
SSNIT, however, has not yet responded to this suggestion in a conclusive manner.
The Auditor-General advises The Trust Hospital to closely collaborate with SSNIT management in order to explore the possibility of turning a portion of the debt into shares.
The hospital’s financial stability would be enhanced by this conversion, which would raise current capital and assist in lowering the high gearing ratio.
Source: newsthemegh.com