Financial Analysis Management of Companies in a Region of Mexico: the Need of a Financial Ratios Annual Directory

Deyanira Bernal Dom¨ªnguez (), Mar¨ªa Luisa Saavedra Garc¨ªa () and Lydia Mar¨ªa L¨®pez Barraza ()
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Deyanira Bernal Dom¨ªnguez: Faculty of Accounting and Administration, Universidad Aut¨®noma de Sinaloa Blvd, Mexico
Mar¨ªa Luisa Saavedra Garc¨ªa: Faculty of Accounting and Administration, Universidad Nacional Aut¨®noma de M¨¦xico
Lydia Mar¨ªa L¨®pez Barraza: Department of Economic and Administrative Sciences, Universidad de Occidente, Mexico
Authors registered in the RePEc Author Service: María Saavedra García

Review of Economics & Finance, 2014, vol. 4, 64-78

Abstract: Decisions of the organizational policies by business managers, based on ideal financial indicators, can be taken with the support of the analysis of financial ratios like predictors of business solvency, profitability and growth. This is an important financial tool to support decision making and for understanding the economic contexts where a company operates. For these reasons, the objective of this research is to identify the financial ratio usage level and to determine the relevance of elaborating an annual directory as support in defining the future of companies in Mexico. A qualitative methodology with a descriptive cross-sectional approach was used. To obtain the information a questionnaire with 43 items was successfully applied to 120 entrepreneurs in Culiac¨¢n, Sinaloa, Mexico. In this context it can be affirmed that the usage level of financial ratios is related to the firm¡¯s size. That is to say, the bigger the size of the company, the higher the level of usage is. The results support the relevance of elaborating the directory with advantages: its availability to businesses of all sizes at low cost.

Keywords: Ratios; Benchmarking; Financial analysis (search for similar items in EconPapers)
JEL-codes: C88 G11 L25 M21 (search for similar items in EconPapers)
Date: 2014
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