Examining Financial Ratios for Non-Financial Firms to Survive Currency Devaluation

Mohamed Abonazel, Charbel Salloum () and Iman Youssef
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Mohamed Abonazel: Cairo University
Charbel Salloum: Métis Lab EM Normandie - EM Normandie - École de Management de Normandie = EM Normandie Business School
Iman Youssef: NGU - NewGiza University

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Abstract: This research investigated the efficiency indicators of 160 non-financial firms listed on the Egyptian stock exchange between 2012 and 2021, a period marked by notable price escalations and currency depreciation. Amid the challenges introduced by the floating exchange rate system, particularly high inflation rates, the research endeavoured to discern valuable insights into a firm's financial standing through an analysis of financial ratios. Utilising dynamic panel data estimation methods, the study scrutinised the relationship between seven determinant variables and efficiency. Various analytical techniques, including OLS, fixed effects, random effects, and generalised method of moments (GMM), were employed in the data analysis phase. Results highlighted that with the exception of volatility, all variables had a considerably positive impact on efficiency. This research holds significance as it offers potential strategies to mitigate the economic challenges Egypt has grappled with in the recent decade, such as sudden currency value declines and concomitant inflation. It accentuates the crucial role of efficiency indicators in making informed decisions and bolstering financial stability, especially in economically tumultuous scenarios.

Keywords: Non-financial firms listed; Efficiency; Profitability; Leverage; Egypt (search for similar items in EconPapers)
Date: 2025
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Published in International Journal of Managerial and Financial Accounting, In press, ⟨10.1504/IJMFA.2025.10060373⟩

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-04981452

DOI: 10.1504/IJMFA.2025.10060373

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