Management Theory and Studies for Rural Business and Infrastructure Development, Volume 34

The role of the analysis of financial and non-financial indicators in assessment of performance of the companies

Inta Kotane

Abstract

Complex assessment of the business activities, which includes a system of financial and non-financial indicators, has been studied by many authors; however, there are problems to apply the given system of indicators in practice, because of lack of a single approach to identification, classification, measurement and evaluation of the indicators of non-financial as well as financial performance. The present research is based on the previous theoretical studies of the author as regards application of financial and non-financial indicators in assessment of the business activities. For approbation of theoretical findings the author has used the questionnaire method, using the method of simple incidental selection or real random sampling. In August–September 2012 the author has conducted a questionnaire of 208 Latvian entrepreneurs. Objective of the questionnaire: to set up a system for assessment of the business activities by means of which the company manager could make complex assessment and exercise effective control of financial position of the company under circumstances of growing competition. The research is aimed at examination of the role of analysis of financial and non-financial indicators in assessment of the business activities, based on regularity, importance and the grounds for implementation of performance of the analysis of financial and non-financial indicators in the companies. The research has used general scientific research methods: information analysis and synthesis, logical constructive, data grouping, treatment using SPSS programme and graphical description methods. The results of the research are indicative of: the analysis of financial indicators in the companies is made on a more regular basis than the analysis of non-financial indicators; respondents are not of the opinion that the analysis of financial and non-financial indicators is important or else, they have difficulties to respond to this question; in performance of the analysis of financial and non-financial indicators a variety of methods is used and there is a causal relationship between regularity of performance of the analysis of financial and non-financial indicators, its importance and grounds in the companies.

JEL codes: G30, M21.

Keyword(s): analysis, financial indicators, non-financial indicators


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Management Theory and Studies for Rural Business and Infrastructure Development eISSN 2345-0355

This journal is published under the terms of the Creative Commons Attribution-Noncommercial 3.0 Unported License. Responsible editor: Dr Audrius Gargasas.