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The Financial Diagnostic – Profitability and Risk

Author

Listed:
  • Achimescu Georgeta

    (“Spiru Haret” University, Faculty of Financial and Accounting Management Constanta)

  • Verisan Cristina-Alina

    (“Spiru Haret” University, Faculty of Financial and Accounting Management Constanta)

Abstract

The financial diagnostic calls, especially the study of liquidities, of the financial structure, of the profitability, but also of the other aspects such as the risk, the development of the company and other. With this purpose, the financial analyst should study the financial situations and the aggregation of this ones with general information on economic, fiscal and monetary, legal and economic and those referring to the economic activity of the domain of activity of the entity. A right financial diagnostic can be established by a much boarder approach, including a preliminary study on the environment. The principal objectives of the financial diagnostic are regarding especially the evolution of the risk management, being sometimes restricted to the formulation of opinions on the economic-financial health situation of the company regarding the shareholders, the investors and the business keepers and creditors, the borrowers. Starting from the objectives of the financial diagnostic, we can distinguish three types of financial diagnostic, namely: the financial diagnostic of the shareholders, the financial diagnostic of the leaders of the company and the financial diagnostic of the creditors.

Suggested Citation

  • Achimescu Georgeta & Verisan Cristina-Alina, 2011. "The Financial Diagnostic – Profitability and Risk," Ovidius University Annals, Economic Sciences Series, Ovidius University of Constantza, Faculty of Economic Sciences, vol. 0(1), pages 29-33, May.
    • Handle: RePEc:ovi:oviste:v:11:y:2011:i:1:p:29-33
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    More about this item

    Keywords

    risk degree; profitability degree; inflation risk; reputation risk; efficiency risk;
    All these keywords.

    JEL classification:

    • G0 - Financial Economics - - General

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