THE INFLUENCE OF ECONOMIC AND FINANCIAL INDICATORS IN THE ASSESSMENT OF ECONOMIC PERFORMANCE

Abstract

The continuous evolution of accounting imposed it as a model of description and modeling of an economic entity, becoming the most important system of information and assistance in issuing effective economic decisions. The process of evaluating an entity’s performance requires the highlights a system of indicators that complies with the degree of satisfaction of the internal and external users' information needs of the annual financial statements. The objective of the research is to establish the determinants factors of the financial performance of economic entities, the research made analyzing the correlation between the profitability of the companies that are part of the BET and a number of other indicators. The financial performance was quantified by the accounting indicators: return on assets (ROA) and return on equity (ROE).Factors through which the impact on financial performance was analyzed are: capital structure (short-term indebtedness, long-term indebtedness, leverage), liquidity, capital intensity, growth opportunities, effective tax rate, net margin rate, market indicators (EPS, PER).The time period considered for our analysis covers 5 financial years for the period 2017-2021, with the necessary data being extracted for each company for the mentioned period. Following the analysis we found a negative correlation between the return on assets and the effective tax rate. Regarding the existing correlation between leverage and long-term debt, current liquidity, and capital intensity, we can see that it is moderate. The results of the present study are in line with other research in this field, with the indicators used as a reference forsupporting decisions.

Keywords

• financial performance
• accounting information
• annual financial statements
• return on assets
• return on equity