Deciphering Financial Health and Risk: Hierarchical Relationships and Interdependencies among Key Factors

Jain Mayank (), Malik Taniya () and Malik Sakshi ()
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Jain Mayank: Vellore Institute of Technology, Vellore, India
Malik Taniya: KPMG Global Services Private Limited, Gurugram, India
Malik Sakshi: KPMG Global Services Private Limited, Gurugram, India

Acta Universitatis Sapientiae, Economics and Business, 2023, vol. 11, issue 1, 162-185

Abstract: This study examines the hierarchical relationships and inter dependencies of financial factors impacting companies’ health, using Total Interpretive Structural Modelling and Matrice d’Impacts Croisés Multiplication Appliquée à un Classement analyses. It identifies key financial factors and their influences. Findings reveal credit risk as a pivotal factor with substantial impact on other parameters. Solvency, capital adequacy, and Tier 1 capital ratios are also key determinants of financial health. The study further categorizes factors into independent, linkage, autonomous, and dependent categories. This research offers valuable insights for managers, policymakers, and investors aiding decision-making.

Keywords: financial health; credit risk; TISM; MICMAC; interdependent financial factors (search for similar items in EconPapers)
JEL-codes: G32 G33 M10 (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:vrs:auseab:v:11:y:2023:i:1:p:162-185:n:6

DOI: 10.2478/auseb-2023-0008

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