The financial distress indicators trend in Italy: an analysis of medium-size enterprises

This study analyses financial distress as evidenced by financial ratios calculated for Italian medium-sized enterprises from 1989 to 2007, the study is carried out by means of a Dynamic Factorial Analysis (DFA). The data for the Italian firms come from about 240,000 surveys’ records and financial st...

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Bibliographic Details
Published in:Eurasian economic review 2014-12, Vol.4 (2), p.199-221
Main Author: Zeli, Alessandro
Format: Article
Language:English
Subjects:
Bankruptcy
Capital
Capital structure
Data analysis
Economic models
Economic policy
Economics
Economics and Finance
Eurozone
Financial analysis
Financial statements
Foreign exchange rates
GDP
Gross Domestic Product
Investigations
Leverage
Multivariate analysis
Original Paper
Psychological distress
Ratios
Trends
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Summary:This study analyses financial distress as evidenced by financial ratios calculated for Italian medium-sized enterprises from 1989 to 2007, the study is carried out by means of a Dynamic Factorial Analysis (DFA). The data for the Italian firms come from about 240,000 surveys’ records and financial statements over the period. Four basic areas identified as being economically significant in affecting the financial distress include: the leverage index, the measure of the efficiency, the measure of performance, and the measure of liquidity. The financial distress trend has been analysed through a “synthetic” indicator summarizing the information represented by financial ratios by means of a dynamic factorial analysis. The results highlight a slight increase in financial distress over the period and different behaviours of the financial distress indicator among the Italian industries. In particular specific tendencies are detected for capital intensive sectors and for export sectors.
ISSN:1309-422X
2147-429X
DOI:10.1007/s40822-014-0010-5