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Considerations Regarding the Assessment and Measurement of Financial Performance

In: 16th Economic International Conference NCOE 4.0 2020

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  • Izabela Diana Hada

    (Ph.D. Student, „1 Decembrie 1918†University of Alba Iulia, România)

Abstract

Financial performance is a complex indicator that has represented and represents a priority, an assurance of profitable economic results, and also a hard to reach indicator. Given the importance and necessity of measuring the financial performance both for the internal and external environment of the economic entity, the main purpose of this article is to present concepts regarding the financial performance: typology, importance, indicators that measure the performance. The paper also aimed to highlight the importance of knowing and measuring performance, based on an empirical study conducted on a sample of five companies in the pharmaceutical field (companies whose object of activity is the retail trade of pharmaceuticals, in specialized stores - CAEN 4773) for which profitability indicators were analysed for a period of fifteen years (2004-2018). The five companies were chosen on the basis of turnover, representing the five best performing companies in the field of trade in pharmaceuticals. The research results show that financial performance is the goal of an economic and social game whose main actors are economic entities, also it is a measure of profit, growth, productivity, value creation, being a complex indicator that confirms the profitability of the business, and performance evaluation involves meeting the requirements of stakeholders. In addition to obtain profit, an entity must focus on sustainable development business, on a capitalization of factors of production, obtaining the best and optimal results in relation to the resources consumed.

Suggested Citation

  • Izabela Diana Hada, 2020. "Considerations Regarding the Assessment and Measurement of Financial Performance," Book chapters-LUMEN Proceedings, in: Carmen NÄ‚STASE (ed.), 16th Economic International Conference NCOE 4.0 2020, edition 1, volume 13, chapter 11, pages 115-129, Editura Lumen.
    • Handle: RePEc:lum:prchap:13-11
    DOI: https://doi.org/10.18662/lumproc/ncoe4.0.2020/11
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    References listed on IDEAS

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    1. Syed Shah Alam & Vijayesvaran Arumugam & Noor Gani Mohd Nor & Pushpa Kaliappan & Lee Sze Fang, 2013. "Relationships between Innovation Capabilities, Business Performance, Marketing Performance and Financial Performance: A Literature Review," Business and Management Horizons, Macrothink Institute, vol. 1(1), pages 59-73, June.
    2. Jaroslav Wagner, 2009. "Measuring Performance – Conceptual Framework Questions," European Research Studies Journal, European Research Studies Journal, vol. 0(3), pages 119-134.
    3. Olu Ojo, 2011. "Performance Appraisal System and its Implications on Organisation’s Performance," The International Journal of Economic Behavior - IJEB, Faculty of Business and Administration, University of Bucharest, vol. 1(1), pages 111-119, June.
    4. Feng Shen & Yunwen Ma & Run Wang & Ningning Pan & Zhiyi Meng, 2019. "Does environmental performance affect financial performance? Evidence from Chinese listed companies in heavily polluting industries," Quality & Quantity: International Journal of Methodology, Springer, vol. 53(4), pages 1941-1958, July.
    5. Ilie Răscolean & Alin Monea, 2014. "Some aspects regarding meaning of intermediate management balances," Annals of the University of Petrosani, Economics, University of Petrosani, Romania, vol. 14(1), pages 297-304.
    6. Ilker Yilmaz, 2013. "Social Performance vs. Financial Performance: CSR disclosures as an indicator of Social Performance," International Journal of Finance & Banking Studies, Center for the Strategic Studies in Business and Finance, vol. 2(2), pages 53-65, April.
    7. Marek Gruszczynski, 2006. "Corporate Governance and Financial Performance of Companies in Poland," International Advances in Economic Research, Springer;International Atlantic Economic Society, vol. 12(2), pages 251-259, May.
    8. Christopher Lim, 2019. "The Impact of Social Variables on Financial Performance," Proceedings of the 12th International RAIS Conference, April 3-4, 2019 2CL, Research Association for Interdisciplinary Studies.
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    Cited by:

    1. Izabela Diana Hada, 2020. "Analysis and Evolution of Profitability in the Pharmaceutical Field in Romania," Book chapters-LUMEN Proceedings, in: Marcin Waldemar STANIEWSKI & Valentina VASILE & Adriana Grigorescu (ed.), International Conference Innovative Business Management & Global Entrepreneurship (IBMAGE 2020), edition 1, volume 14, chapter 55, pages 744-757, Editura Lumen.
    2. Hada Izabela Diana, 2020. "Evolutions and Trends Regarding the Pharmaceutical Sector in Romania," Risk in Contemporary Economy, "Dunarea de Jos" University of Galati, Faculty of Economics and Business Administration, pages 59-65.

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    More about this item

    Keywords

    financial performance; ROA; ROE; net profit margin; pharmaceutical field;
    All these keywords.

    JEL classification:

    • A1 - General Economics and Teaching - - General Economics
    • F1 - International Economics - - Trade
    • F3 - International Economics - - International Finance
    • M1 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration
    • R1 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics
    • O3 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights

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