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Advantages And Limitations Of The Financial Ratios Used In The Financial Diagnosis Of The Enterprise

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  • Mihaela GADOIU

    (Faculty of Economics, University of Pitesti, Romania)

Abstract

This paper points out the importance of the financial ratios used in financial diagnosis. Starting from the idea that the financial theory and practice use too many indicators to achieve the financial diagnosis of a company, and that most of the instruments used are relevant only under specific and limited conditions, we examined the advantages and limitations of the financial ratios. The research method used in this paper involves on the one hand, the theoretical substantiation of the specific notions used in financial diagnosis of an enterprise, and on the other hand their transposition by appealing to an example of the use of a company.

Suggested Citation

  • Mihaela GADOIU, 2014. "Advantages And Limitations Of The Financial Ratios Used In The Financial Diagnosis Of The Enterprise," Scientific Bulletin - Economic Sciences, University of Pitesti, vol. 13(2), pages 87-95.
    • Handle: RePEc:pts:journl:y:2014:i:2:p:87-95
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    References listed on IDEAS

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    1. Maria Daniela Bondoc & Marian Ţaicu, 2013. "Expenses Analysis Based on Information Provided by the Profit and Loss Account – Company Performance Diagnosis Stage," Annals of the University of Petrosani, Economics, University of Petrosani, Romania, vol. 13(1), pages 5-14.
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    Cited by:

    1. Trofimov, Ivan D. & Md. Aris, Nazaria & Ying Ying, Jovena Kho, 2018. "Determinants of Commercial Banks' Profitability in Malaysia," MPRA Paper 85598, University Library of Munich, Germany.

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      More about this item

      Keywords

      financial diagnosis; financial ratios; performance.;
      All these keywords.

      JEL classification:

      • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions
      • G12 - Financial Economics - - General Financial Markets - - - Asset Pricing; Trading Volume; Bond Interest Rates
      • L21 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Business Objectives of the Firm

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