Firm Financial Performance: An Empirical Investigation on Romanian SMEs

Ionescu Alexandra (), Horga Maria-Gabriela () and Nancu Dorinela ()
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Ionescu Alexandra: “Ovidius” University of Constanta
Horga Maria-Gabriela: “Ovidius” University of Constanta
Nancu Dorinela: “Ovidius” University of Constanta

Ovidius University Annals, Economic Sciences Series, 2013, vol. XIII, issue 1, 1299-1303

Abstract: Firm's financial performance is reflected by its profit and loss account. Still, all financial statements are needed in order to have a complete view on a firm's financial performance. As a general rule, several financial indicators are calculated in this sense. Hence, it would be of great interest to reduce the number of financial indicators into fewer, more synthetic ones. However, the new indicators should reflect the same information as the first ones. Statistics offers this possibility through factor analysis. The purpose of the present study is to use factor analysis in order to generate a reduced number of relevant indicators that could help in analyzing firm's financial performance. The paper represents a case study on Romanian small and medium enterprises.

Keywords: factor analysis; financial performance; principal components. (search for similar items in EconPapers)
JEL-codes: C58 (search for similar items in EconPapers)
Date: 2013
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