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Deciphering Financial Health and Risk: Hierarchical Relationships and Interdependencies among Key Factors

Author

Listed:
  • Jain Mayank

    (Vellore Institute of Technology, Vellore, India)

  • Malik Taniya

    (KPMG Global Services Private Limited, Gurugram, India)

  • Malik Sakshi

    (KPMG Global Services Private Limited, Gurugram, India)

Abstract

This study examines the hierarchical relationships and inter dependencies of financial factors impacting companies’ health, using Total Interpretive Structural Modelling and Matrice d’Impacts Croisés Multiplication Appliquée à un Classement analyses. It identifies key financial factors and their influences. Findings reveal credit risk as a pivotal factor with substantial impact on other parameters. Solvency, capital adequacy, and Tier 1 capital ratios are also key determinants of financial health. The study further categorizes factors into independent, linkage, autonomous, and dependent categories. This research offers valuable insights for managers, policymakers, and investors aiding decision-making.

Suggested Citation

  • Jain Mayank & Malik Taniya & Malik Sakshi, 2023. "Deciphering Financial Health and Risk: Hierarchical Relationships and Interdependencies among Key Factors," Acta Universitatis Sapientiae, Economics and Business, Sciendo, vol. 11(1), pages 162-185, October.
    • Handle: RePEc:vrs:auseab:v:11:y:2023:i:1:p:162-185:n:6
    DOI: 10.2478/auseb-2023-0008
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    References listed on IDEAS

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    More about this item

    Keywords

    financial health; credit risk; TISM; MICMAC; interdependent financial factors;
    All these keywords.

    JEL classification:

    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • G33 - Financial Economics - - Corporate Finance and Governance - - - Bankruptcy; Liquidation
    • M10 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - General

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