Financial performance analysis: A case study of industrial enterprise governance

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Abstract

This study explores the financial resilience of an industrial firm, emphasizing the vital significance of financial analyses in ensuring sustained operational viability. It presents a strategic framework for enduring prosperity through a thorough examination of financial statements and operational efficiency, highlighting the indispensable role of rigorous financial scrutiny in navigating contemporary business landscapes for sustained success across industries and economies. The study empirically investigates the efficacy of the margin vs turnover model through ratio analysis methodologies applied to the company’s financial data. It reveals notable fluctuations in gross profit margins, spanning from 11.51 percent to 33.79 percent, and estimated asset turnovers, ranging between one and 20.6 percent, throughout the years 2019–2022, offering insights into the financial dynamics of the entity under scrutiny. Ensuring sustained success necessitates consistent attention to industry trends, enhancement of operational efficiency, and adherence to financial discipline, as evidenced by satisfactory ratios in borrowing, asset-to-liability, and interest coverage on the balance sheet, which also presents avenues for improvement.

Keywords: Financial Performance, Financial Analysis, Ratio Analysis, Financial Management, Accounting, Industrial Management

Authors’ individual contribution: Conceptualization — A.S.; Methodology — A.S. and R.H.; Investigation — R.H.; Resources — A.S.; Writing — A.S.; Supervision — R.H.

Declaration of conflicting interests: The Authors declare that there is no conflict of interest.

JEL Classification: G12, G30, L53, M20, M41

Received: 19.12.2023
Accepted: 19.07.2024
Published online: 24.07.2024

How to cite this paper: Safarli, A., & Hasanov, R. (2024). Financial performance analysis: A case study of industrial enterprise governance. Journal of Governance & Regulation, 13(3), 115–123. https://doi.org/10.22495/jgrv13i3art10