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The Application of Financial Ratios and Panel Data Analysis in Assessing Firm Performance and Socio-Economic Dynamics

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  • Ferreira, Bianca
  • Ndiaye, Fatima
  • Silva, Costa

Abstract

This paper examines the application of financial ratios and panel data analysis in evaluating firm performance and socio-economic dynamics. Through a systematic review of recent literature, we highlight how financial ratios—such as liquidity, profitability, and leverage metrics—serve as critical diagnostic tools for assessing corporate health, particularly in crisis contexts. Meanwhile, panel data analysis enhances longitudinal insights, enabling researchers to identify causal relationships and long-term trends across industries and economies. Our synthesis reveals methodological gaps, including the underutilization of hybrid approaches that integrate ratio analysis with advanced econometric techniques. By bridging these analytical approaches, researchers can generate more robust insights for financial decision-making and policy formulation.

Suggested Citation

  • Ferreira, Bianca & Ndiaye, Fatima & Silva, Costa, 2025. "The Application of Financial Ratios and Panel Data Analysis in Assessing Firm Performance and Socio-Economic Dynamics," MPRA Paper 124723, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:124723
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    References listed on IDEAS

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    1. Emmanouil Taxiarchis Gazilas, 2024. "Economic Factors Influencing Homicide Rates: A European Perspective," Journal of Applied Economic Research, Graduate School of Economics and Management, Ural Federal University, vol. 23(2), pages 258-278.
    2. Emmanouil Taxiarchis Gazilas, 2024. "Factors Influencing Life Expectancy in Low-Income Countries: A Panel Data Analysis," Journal of Applied Economic Research, Graduate School of Economics and Management, Ural Federal University, vol. 23(3), pages 580-601.
    3. Gazilas, Emmanouil Taxiarchis, 2024. "An empirical analysis on the impact of labour market regulations on uninsured employment in Greece," MPRA Paper 121311, University Library of Munich, Germany.
    4. Covar, Eliska, 2025. "Resilience and Rebound: A Financial Analysis of Czech's Big Four Accounting Firms Post-COVID-19 Recovery," MPRA Paper 124351, University Library of Munich, Germany.
    5. Levine, Ross, 2005. "Finance and Growth: Theory and Evidence," Handbook of Economic Growth, in: Philippe Aghion & Steven Durlauf (ed.), Handbook of Economic Growth, edition 1, volume 1, chapter 12, pages 865-934, Elsevier.
    6. Edward I. Altman, 1968. "Financial Ratios, Discriminant Analysis And The Prediction Of Corporate Bankruptcy," Journal of Finance, American Finance Association, vol. 23(4), pages 589-609, September.
    7. Badi H. Baltagi, 2021. "Econometric Analysis of Panel Data," Springer Texts in Business and Economics, Springer, edition 6, number 978-3-030-53953-5, July.
    8. Shvekens, Martins, 2025. "Revealing Financial Success: A Comprehensive Decade-long Financial Accounting Analysis of Hellenic Telecommunications Organisation S.A (OTE) - A Leading Force in Greece's Stock Exchange," MPRA Paper 124256, University Library of Munich, Germany.
    9. Manuel Arellano & Stephen Bond, 1991. "Some Tests of Specification for Panel Data: Monte Carlo Evidence and an Application to Employment Equations," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 58(2), pages 277-297.
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    Cited by:

    1. Yılmaz, Emre & Bekele, Tewodros & Yuang, Đặng & Kim, Min-ji, 2025. "Building Financial Power in Small and Medium Enterprises," MPRA Paper 125292, University Library of Munich, Germany.
    2. Thị Mai, Nguyễn & Wijaya, Putri & 陽翔, 田中 & Volkov, Dmitry, 2025. "Cross-Sector Performance Benchmarking: The Evolving Role of Financial Ratio Analysis Across Industries," MPRA Paper 125290, University Library of Munich, Germany.
    3. Hương, Trần & Đức, Vũ & Ndlovu, Thando & Chaiwat, Somsak, 2025. "Financial Ratio Analysis: A Research Note on Post-Pandemic Lessons Across Sectors," MPRA Paper 125291, University Library of Munich, Germany.
    4. Zhang, Yi & Silva, Beatriz & Moreau, Élodie & Tāne, Hinewera, 2025. "Financial Ratio Analysis: A literature Review Working Paper," MPRA Paper 125289, University Library of Munich, Germany.

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    JEL classification:

    • M41 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Accounting

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