An evaluation of financial performance of companies. The financial performance of companies is investigated using multiple discriminant analysis together with methods for the identification of potential high performance companies.

摘要

The objective of this study is to establish whether companiesudthat utilise their resources more efficiently present specificudcharacteristics in their financial profile, and whether on the basisudof these characteristics a classification model can be constructedudthat includes, alongside resource utilisation measures, predictorsudrelated to other financial dimensions calculated from publishedudinformation.udThe- research proceeds by examining the factors influencingudcompanies' performance, and the reliabilty of published accounts.udDiscriminant analysis is chosen as the most appropriate technique ofudanalysis. Its applications in the field of financial analysis areuddiscussed -and an examination of the discriminant analysis techniqueudis undertaken.udFor reasons of comparability and access to a large quantity ofudinformation, the analytical part of the study is based on dataudextracted from a computer readable tape provided by ExteludStatistical Services Ltd. It starts by describing the financialudvariables to be used later on in the study, and proposing audclassification framework that would be of assistance in identifyingudthe financial dimensions of importance in relation to the problemudunder investigation. A discriminant model that correctly classifiesud85 per cent of the companies is then constructed. It includes,udbesides measures of resources utilisation, measures of financialudlevarage, working capital management, cash position and stability ofudpast performance. The-part of the analysis on the identification ofudpotential well performing companies indicates that, althoughudspecific characteristics can be noticed up to five year before, itudis only possible to construct a classification model with sufficientudaccuracy one year before a high level of performance is actuallyudreached. Finally,udan index of financial performance based on normaludapproximations of the z-score distributions from the model used toudidentify well performing companies is suggested and an assessment ofudthe structural change experienced by companies rising from a lessudwell to a well performaing status is presented.