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Article

Overview of Factors Influencing Financial Performance: A Case Study of Albanian Firms

1Department of Finance and Accounting, Fan S. Noli University, Korçë, Albania


Journal of Finance and Accounting. 2024, Vol. 12 No. 2, 61-67
DOI: 10.12691/jfa-12-2-2
Copyright © 2024 Science and Education Publishing

Cite this paper:
Junada Sulillari. Overview of Factors Influencing Financial Performance: A Case Study of Albanian Firms. Journal of Finance and Accounting. 2024; 12(2):61-67. doi: 10.12691/jfa-12-2-2.

Correspondence to: Junada  Sulillari, Department of Finance and Accounting, Fan S. Noli University, Korçë, Albania. Email: junasulillari@gmail.com

Abstract

The Albanian economy has experienced various events in the last few years, like the earthquake of 2019 and the COVID-19 pandemic that hurt the economy and businesses. These events were a critical factor that determined a company's future. This research aimed to investigate the factors affecting the Albanian company's financial performance in these shocks. This is secondary and quantitative research. The information needed to conduct the quantitative analysis was collected by downloading the financial statements of 93 companies on the National Business Centre's website. The financial information used was a mixture of key financials from the fiscal years of 2022 and 2018, to allow for getting financial information before and after the disrupting events. The econometric model created included mainly firm-specific factors for their effect on the Albanian company's financial performance. The Return on Assets was used to measure the company's financial performance. The independent variables included the current ratio, the debt ratio, the debt-to-equity ratio, sales growth, the firm size, and the total assets turnover. I used the ordinary least squares method to test the relationship between the independent and dependent variables. The factors that significantly affected the Albanian company's financial performance were the current ratio, the debt ratio, the debt ratio before the disrupting events, the debt-to-equity ratio before the disrupting events, firm size before and after the disrupting events, and sales growth before the disrupting events. These findings suggest that the companies shall focus on these areas, to maximise their potential to increase the effect on the company's financial performance or minimize the effect on the company's financial performance. Future research could focus on a more narrow view of the factors affecting Albanian companies' financial performance.

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