Searching for the best financial ratios evaluating companies operating in different Lithuanian sectors

Abstract

Because of the significant growth in the amount of companies going bankrupt, there is a rising need in the methods that could assess the position of a company more accurately. The purpose of this article is to identify a set of financial indicators that would help to assess company operating in any of the sectors more adequately. In order to achieve this objective, there was a study of financial ratios of 137 Lithuanian sectors carried out. Sectors were chosen according to Statistical Classification of Economic Activities in the European Community, Rev. 2 (hereinafter-EVRK Rev. 2), 3-digit precision. The study revealed that there is no one specific combination of indicators which would suit to evaluate companies operating in different sectors. In order to reduce the time input into the evaluation of financial position of the company operating in a particular sector, analysis should include different sets of financial indicators.