Performance Analysis through Financial Modelling
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The study analyzes the financial performance of four major UK retail companies: Tesco, Sainsbury, Aldi, and Lidl, using various financial ratios to assess their stability and competitiveness. It highlights how the COVID-19 pandemic affected their financial health, particularly in 2020, leading to significant losses for Tesco and Sainsbury. The researchers emphasize that ratio analysis is crucial for understanding a company's financial position and guiding investors in their decision-making processes.
![BOHR International Journal of Finance and Market Research
2021, Vol. 1, No. 1, pp. 39–43
https://doi.org/10.54646/bijfmr.006
www.bohrpub.com
Performance Analysis through Financial Modelling
Dr. G. Naveen Kumar1, Dr. Podapala Siva Reddy2,∗ and Mulupur Sai Rama Krishna3
1Prof & HoD, Department of Business Management, MRCET (A)
2Associate Professor, Department of Business Management, MRCET (A)
3Student of F&I, University of Hertfordshire, United Kingdom
∗Corresponding author: siva.podapala@gmail.com
Abstract. Finance is the lifeblood and lifeline of any business entity either commercial or non-commercial. The
Survival, Stability and Sustainability of a firm is highly associated with its financial wellness. It can be observed
through its ability to pay(re) short-term as well as long term liabilities, meeting the regular financial obligations,
to increase the value of firm and ability to generate profit. Financial analysis, evaluation, and assessment help in
determines the financial position and financial strength of a firm. Among the plenty of methods and tolls available
for financial performance, ratio analysis is more useful and meaningful. These ratios make it possible to analyze the
evolution of the financial situation of a firm (trend analysis), cross-sectional analysis and comparative analysis.
Introduction
The study presents the market competitiveness of four
retail giants of the UK such as TESCO PLC, Sainsbury,
ALDI, and Lidl with help of ratios. The present study ana-
lyzes about the different study concepts that are related
to the establishment of financial stability. The financial
position can be evaluated with help of ratio analysis, as
well as Du-Point analysis. In addition, the study has also
mentioned various financial condition analysis methods to
have an understanding about financial ratios. The finan-
cial performance analysis holds a significant role in terms
of understanding the financial health of the company.
The financial records derived from the analysis helps the
investors to understand the economic conditions of the
company, which leads to financial and reputation growth
of the company.
Objectives of the Study
The main research objectives constructed by the researcher
for this study are:
• To study the financial performance of selected com-
panies by assessing the past performances, revenue,
and projected future performance of all the compa-
nies;
• To analyse the financial performance of the compa-
nies to determine the financial health of these com-
panies;
• To evaluate the competitive advantages and eco-
nomic viability of the companies with the help of
ratio analysis framework; and
• To recommend appropriate strategies that can
improve the financial performance of the selected
company in this research.
Ratios – The Theoretical Framework
In this digital and information era, organization of infor-
mation relevant to a decision field has become the primary
task of the decision maker [12]. The world is now more
complex, uncertain and dynamic, not because of lack of
information but because there is too much information. In
real life situations, the quality of a decision taken is often
found to be inversely related to the quantity of informa-
tion [4]. A business system continuously generates data. A
good management control system must produce relevant,
intelligible information and identify key variables for man-
agement control [9].
39](https://image.slidesharecdn.com/bijfmr20221106-220411114942/85/Performance-Analysis-through-Financial-Modelling-1-320.jpg)
![40 G. Naveen Kumar et al.
A carefully selected ratio or a set of ratios can not only
aid the primary decision-making process it could as well
as act as a highly effective monitoring tool [10]. Among
the wide range of techniques using for processing of data,
the data-processing by the ratio methods has the ability
to bring out the maximum information content if vari-
ables that produce a ration are correctly chosen with regard
to the purpose at hand. The simplicity and directness of
ratios attracted the minds of great analytical thinkers dur-
ing not only the modern times, even in the ancient times
too (Hrishikesh, 2015).
Ratio is a numeric figure, reveals the association or
relationship between two variables. Financial ratios are cal-
culated to establish a relevant relationship between two
numbers of financial statements and then its result is inter-
preted to derive meaningful conclusions. The key aspect
the calculation is that the numerator and denominator
must be logically related to each other. Otherwise, the ratio
will not provide information needed for decision making.
So financial statement analysis is presented as a matter of
pro-forma analysis of the future, with forecasted ratios [6].
The ratios used in the study are:
Current Ratio: Current ratio express the relation between
the current assets to current liabilities of a business entity.
The current ratio is static measure of resources available
at a point in time to meet current obligations. The current
reservoir of cash resources does not have a logical or rela-
tion to its future cash flows [2].
Quick Ratio: A stringent test of liquidity can express by
Quick Ratio (Acid Test Ratio). Inventories of the least liq-
uid of current assets and are removed from this, and our
analysis must assess the merits of excluding inventories in
evaluating liquidity [11].
Gross Margin Ratio: Is measured as revenues less cost
of sales, and it directs special attention to the factors
explaining variations in sales and cost of sales. The gross
profit must be sufficiently large to finance essential future
directed discretionary expenditures [3].
Net Margin Ratio: This ratio expresses the relation
between total revenue and to its net profits. The net profit
margin ratio is used to describe a company’s ability to
produce profit and to consider several scenarios, such as
an increase in expenses which is deemed ineffective. Net
profit margin is a strong indicator of a firm’s overall suc-
cess and is usually stated as a percentage.
Literature Review
Renáta et al., made a study on “Comprehensive assessment
of firm financial performance using financial ratios and lin-
guistic analysis of annual reports”. The results of the study
suggest that firms that have good financial results verbally
describe not only the achieved values of financial indica-
tors, but they also elaborate the causes of the result in more
detail. This seems to be true for both positive and negative
impacts (Renata et al., 2017). The main purpose of financial
statement analysis (Ratio Analysis) is to utilize information
about the past performance of the company in order to pre-
dict how it will fare in the future [8].
Paul Barnes [7] explained the application and impor-
tance of ratios in brief. They not only measure the perfor-
mance of a firm and use as a tool to measure and predict
financial position. The ratios are using for both credit and
managerial analysis purpose, and also using for measuring
profitability of various business entities.
Warui (2017) analysed credit risk management strate-
gies and performance of commercial banks in Kenya. He
adopted the credit risk theory and found that credit risk
is amongst critical factors to think about for any finan-
cial institutions involved in any lending activity. The study
adds that financial institutions have to find themselves in
making decision on giving credit to potential borrowers,
despite effectively growing their balance sheet and effec-
tively increasing their returns and cautions to any losses
incurred.
Methodology: The study is based on pure secondary data
included financial statements of selected companies, i.e.,
TESCO PLC, Sainsbury, Aldi and Lidl. As part of the
analysis, the researcher focused on liquidity position (Cur-
rent Ratio & Quick Ratio) and consistency (Gross Mar-
gin Ratio & Net Margin Ratio). These ratios of selected
four companies are presented, and the discussions are as
follows:
Analysis of the Data
The performance of any business entity can be measured
with money in business tycoon. A firm will be considered
as strong if it has sufficient financial reserves, funds and
liquidity. At the same time, their performance also depends
on some other variables like assets (both fixed and current)
liabilities, sales revenue, expenses, and cost of goods sold.
The researcher considers these variables for the study and
presented here.
In this current study, a total of four financial ratios are
calculated such as current ratio, quick ratio, gross margin
ratio, and net margin ratio. According to the above ratio
analysis spreadsheet, it is observed that TESCO PLC faces
fundamental business losses in the 2020 financial year due
to the COVID-19 pandemic. As per the overview of this
organization, TESCO PLC faces around 4.9% of reduction
in operating profit (tescoplc.com, 2021). Moreover, from the
financial data of this organization, it is also identified that
the organization experiences around 0.7% of reduction in
the annual sales volume.](https://image.slidesharecdn.com/bijfmr20221106-220411114942/85/Performance-Analysis-through-Financial-Modelling-2-320.jpg)
![Performance Analysis through Financial Modelling 43
challenge to continuing their business as their liabilities
may be increased. In the year of 2019, they get their maxi-
mum market share that is almost 10% in the UK however
it is reduced after this Covid-19 spreading.
Results & Discussion
It is observed that TESCO PLC faces fundamental busi-
ness losses in the 2020 financial year due to the COVID-19
pandemic. Sainsbury also experiences significant business
losses in the 2021 financial year due to the business losses
in 2020 and it reduces the overall sales volume of this enter-
prise by 0.3% (about.sainsburys.co.uk, 2021). Aldi faces
huge losses after the 2018 financial year due to inappro-
priate operational processes and even Lidl also performed
in the same lines with huge losses.
References
[1] Altman, E.I., Iwanicz-Drozdowska, M., Laitinen, E.K. and Suvas,
A. (2017). Financial distress prediction in an international context:
A review and empirical analysis of Altman’s Z-score model. Jour-
nal of International Financial Management & Accounting, 28(2),
pp. 131–171.
[2] Edward I. Altman (1968). Financial Ratios, Discriminant Analysis
and the Prediction of Corporate Bankruptcy, The Journal of Finance,
Vol. 23, No. 4., pp. 589–609.
[3] Farris, Paul W.; Neil T. Bendle; Phillip E. Pfeifer; David J. Reib-
stein (2010). Marketing Metrics: The Definitive Guide to Measuring
Marketing Performance. Upper Saddle River, New Jersey: Pearson
Education, Inc. ISBN 0-13-705829-2, pp. 88–96.
[4] Financing India’s MSMEs (2018). Estimation of Debt Requirement of
MSMEs in India, IFC Report.
[5] MacCarthy, J., (2017). Using Altman Z-score and Beneish M-score
models to detect financial fraud and corporate failure: A case study
of Enron Corporation. International Journal of Finance and Account-
ing, 6(6), pp. 159–166.
[6] Nissim, D., Penman, S.H. (2001). Ratio Analysis and Equity Valu-
ation: From Research to Practice. Review of Accounting Studies 6,
pp. 109–154. https://doi.org/10.1023/A:1011338221623.
[7] Paul Barnes, (2006). The Analysis and Use of Ratios: A Review Arti-
cle, Journal of Business Finance & Accounting, Wiley Publications,
Vol. 14, Issue-4, pp. 449–461.
[8] Petrit Hasanaj1 & Beke Kuqi (2019), Analysis of Financial State-
ments: The Importance of Financial Indicators in Enterprise,
Humanities & Social Science Research, Vol. 2, No. 2; 2019
ISSN 2576-3024, E-ISSN 2576-3032 https://doi.org/10.30560/hssr.
v2n2p17, pp. 12–19.
[9] SME Competitiveness Outlook (2020), COVID 19: The Great Lock-
down and its Impact on Small Business, International Trade
Centre.
[10] Stein, Peer, Tony Goland and Robert Schiff (2010). Two Trillion and
Counting: Assessing the Credit Gap for Micro, Small, and Medium-
size Enterprises in the Developing World, McKinsey, USA.
[11] Tracy, John A. (2004). How to Read a Financial Report: Wringing
Vital Signs Out of the Numbers. John Wiley and Sons. p. 173. ISBN
0-471-64693-8.
[12] World Bank Development Report (2021), Data for Better Lives,
World Bank, Washington D.C.](https://image.slidesharecdn.com/bijfmr20221106-220411114942/85/Performance-Analysis-through-Financial-Modelling-5-320.jpg)
Performance Analysis through Financial Modelling
- 1. BOHR International Journal of Finance and Market Research 2021, Vol. 1, No. 1, pp. 39–43 https://doi.org/10.54646/bijfmr.006 www.bohrpub.com Performance Analysis through Financial Modelling Dr. G. Naveen Kumar1, Dr. Podapala Siva Reddy2,∗ and Mulupur Sai Rama Krishna3 1Prof & HoD, Department of Business Management, MRCET (A) 2Associate Professor, Department of Business Management, MRCET (A) 3Student of F&I, University of Hertfordshire, United Kingdom ∗Corresponding author: siva.podapala@gmail.com Abstract. Finance is the lifeblood and lifeline of any business entity either commercial or non-commercial. The Survival, Stability and Sustainability of a firm is highly associated with its financial wellness. It can be observed through its ability to pay(re) short-term as well as long term liabilities, meeting the regular financial obligations, to increase the value of firm and ability to generate profit. Financial analysis, evaluation, and assessment help in determines the financial position and financial strength of a firm. Among the plenty of methods and tolls available for financial performance, ratio analysis is more useful and meaningful. These ratios make it possible to analyze the evolution of the financial situation of a firm (trend analysis), cross-sectional analysis and comparative analysis. Introduction The study presents the market competitiveness of four retail giants of the UK such as TESCO PLC, Sainsbury, ALDI, and Lidl with help of ratios. The present study ana- lyzes about the different study concepts that are related to the establishment of financial stability. The financial position can be evaluated with help of ratio analysis, as well as Du-Point analysis. In addition, the study has also mentioned various financial condition analysis methods to have an understanding about financial ratios. The finan- cial performance analysis holds a significant role in terms of understanding the financial health of the company. The financial records derived from the analysis helps the investors to understand the economic conditions of the company, which leads to financial and reputation growth of the company. Objectives of the Study The main research objectives constructed by the researcher for this study are: • To study the financial performance of selected com- panies by assessing the past performances, revenue, and projected future performance of all the compa- nies; • To analyse the financial performance of the compa- nies to determine the financial health of these com- panies; • To evaluate the competitive advantages and eco- nomic viability of the companies with the help of ratio analysis framework; and • To recommend appropriate strategies that can improve the financial performance of the selected company in this research. Ratios – The Theoretical Framework In this digital and information era, organization of infor- mation relevant to a decision field has become the primary task of the decision maker [12]. The world is now more complex, uncertain and dynamic, not because of lack of information but because there is too much information. In real life situations, the quality of a decision taken is often found to be inversely related to the quantity of informa- tion [4]. A business system continuously generates data. A good management control system must produce relevant, intelligible information and identify key variables for man- agement control [9]. 39
- 2. 40 G. Naveen Kumar et al. A carefully selected ratio or a set of ratios can not only aid the primary decision-making process it could as well as act as a highly effective monitoring tool [10]. Among the wide range of techniques using for processing of data, the data-processing by the ratio methods has the ability to bring out the maximum information content if vari- ables that produce a ration are correctly chosen with regard to the purpose at hand. The simplicity and directness of ratios attracted the minds of great analytical thinkers dur- ing not only the modern times, even in the ancient times too (Hrishikesh, 2015). Ratio is a numeric figure, reveals the association or relationship between two variables. Financial ratios are cal- culated to establish a relevant relationship between two numbers of financial statements and then its result is inter- preted to derive meaningful conclusions. The key aspect the calculation is that the numerator and denominator must be logically related to each other. Otherwise, the ratio will not provide information needed for decision making. So financial statement analysis is presented as a matter of pro-forma analysis of the future, with forecasted ratios [6]. The ratios used in the study are: Current Ratio: Current ratio express the relation between the current assets to current liabilities of a business entity. The current ratio is static measure of resources available at a point in time to meet current obligations. The current reservoir of cash resources does not have a logical or rela- tion to its future cash flows [2]. Quick Ratio: A stringent test of liquidity can express by Quick Ratio (Acid Test Ratio). Inventories of the least liq- uid of current assets and are removed from this, and our analysis must assess the merits of excluding inventories in evaluating liquidity [11]. Gross Margin Ratio: Is measured as revenues less cost of sales, and it directs special attention to the factors explaining variations in sales and cost of sales. The gross profit must be sufficiently large to finance essential future directed discretionary expenditures [3]. Net Margin Ratio: This ratio expresses the relation between total revenue and to its net profits. The net profit margin ratio is used to describe a company’s ability to produce profit and to consider several scenarios, such as an increase in expenses which is deemed ineffective. Net profit margin is a strong indicator of a firm’s overall suc- cess and is usually stated as a percentage. Literature Review Renáta et al., made a study on “Comprehensive assessment of firm financial performance using financial ratios and lin- guistic analysis of annual reports”. The results of the study suggest that firms that have good financial results verbally describe not only the achieved values of financial indica- tors, but they also elaborate the causes of the result in more detail. This seems to be true for both positive and negative impacts (Renata et al., 2017). The main purpose of financial statement analysis (Ratio Analysis) is to utilize information about the past performance of the company in order to pre- dict how it will fare in the future [8]. Paul Barnes [7] explained the application and impor- tance of ratios in brief. They not only measure the perfor- mance of a firm and use as a tool to measure and predict financial position. The ratios are using for both credit and managerial analysis purpose, and also using for measuring profitability of various business entities. Warui (2017) analysed credit risk management strate- gies and performance of commercial banks in Kenya. He adopted the credit risk theory and found that credit risk is amongst critical factors to think about for any finan- cial institutions involved in any lending activity. The study adds that financial institutions have to find themselves in making decision on giving credit to potential borrowers, despite effectively growing their balance sheet and effec- tively increasing their returns and cautions to any losses incurred. Methodology: The study is based on pure secondary data included financial statements of selected companies, i.e., TESCO PLC, Sainsbury, Aldi and Lidl. As part of the analysis, the researcher focused on liquidity position (Cur- rent Ratio & Quick Ratio) and consistency (Gross Mar- gin Ratio & Net Margin Ratio). These ratios of selected four companies are presented, and the discussions are as follows: Analysis of the Data The performance of any business entity can be measured with money in business tycoon. A firm will be considered as strong if it has sufficient financial reserves, funds and liquidity. At the same time, their performance also depends on some other variables like assets (both fixed and current) liabilities, sales revenue, expenses, and cost of goods sold. The researcher considers these variables for the study and presented here. In this current study, a total of four financial ratios are calculated such as current ratio, quick ratio, gross margin ratio, and net margin ratio. According to the above ratio analysis spreadsheet, it is observed that TESCO PLC faces fundamental business losses in the 2020 financial year due to the COVID-19 pandemic. As per the overview of this organization, TESCO PLC faces around 4.9% of reduction in operating profit (tescoplc.com, 2021). Moreover, from the financial data of this organization, it is also identified that the organization experiences around 0.7% of reduction in the annual sales volume.
- 3. Performance Analysis through Financial Modelling 41 Table 1. Ratio Analysis of TESCO PLC. Ratio Analysis Spreadsheet Balance Sheet Ratio (Plausible) No. Years 2016 2017 2018 2019 2020 2021 1 Current Ratio 3.03479 3.86585 2.4902 0.60783 0.71841 2.08227 Current Assets 14828 15417 13726 12570 12879 10807 Current Liabilities 4886 3988 5512 20680 17927 5190 2 Quick Ratio 0.00594 0.01204 0.00798 0.00106 0.00128 0.00193 Cash + Accounts 29 48 44 22 23 10 Current Liabilities 4886 3988 5512 20680 17927 5190 Income Statement Ratio (Consistent) No. Years 2016 2017 2018 2019 2020 2021 1 Gross Margin 0.01952 0.02567 0.03603 0.03785 0.04389 0.03248 Gross profit 944 1280 1837 2153 2518 1736 Sales 48352 49867 50991 56883 57370 53445 2 Net margin 0.009 0.00291 0.02546 0.02943 0.02292 0.01544 Net profit before tax 435 145 1298 1674 1315 825 Sales 48352 49867 50991 56883 57370 53445 Source: Calculated by the Researcher. Table 2. Ratio analysis of sainsbury. Ratio Analysis Spreadsheet Balance Sheet Ratio (Plausible) No. Years 2016 2017 2018 2019 2020 2021 1 Current Ratio 0.66131 2.80853 3.22906 1.9825 1.70052 1.52304 Current Assets 4444 6322 7866 7589 7586 7073 Current Liabilities 6720 2251 2436 3828 4461 4644 2 Quick Ratio 0.33497 0.255 0.30542 0.17268 0.02892 0.01335 Cash + Accounts 2251 574 744 661 129 62 Current Liabilities 6720 2251 2436 3828 4461 4644 Income Statement Ratio (Consistent) No. Years 2016 2017 2018 2019 2020 2021 1 Gross Margin 0.05637 0.07053 0.06735 0.06192 0.07082 0.06743 Gross Profit 1456 1634 1882 2007 2294 2177 Sales 25829 23168 27944 32412 32394 32285 2 Net Margin 0.02273 0.02171 0.01464 0.00737 0.01809 0.01103 Net Profit before tax 587 503 409 239 586 356 Sales 25829 23168 27944 32412 32394 32285 Source: Calculated by the Researcher. Sainsbury According to the detailed ratio analysis of the mentioned organization, it is observed that Sainsbury also faces huge business losses in the 2020 financial year due to the pan- demic period. The above figure represents the financial overview of Sainsbury over the six financial years. As per the annual report of this organization, Sainsbury also experiences sig- nificant business losses in the 2021 financial year due to the business losses in 2020 and it reduces the overall sales volume of this enterprise by 0.3% (about.sainsburys.co.uk, 2021). However, while comparing those financial state- ments with Tesco PLC, it can be considered that Sainsbury faces minimal business losses from the financial perspec- tive compared with Tesco PLC. Aldi For this Aldi organization there is considering the financial data from the year of 2016 to 2021 fanatical year.
- 4. 42 G. Naveen Kumar et al. Table 3. Ratio analysis of Aldi. Ratio Analysis Spreadsheet Balance sheet ratio (Plausible) No. Years 2016 2017 2018 2019 2020 2021 1 Current ratio 0.60725 0.56915 0.5175 0.4878 0.5130 0.3664 Current assets 728.7 739.9 724.5 756.2 667 458 Current liabilities 1200 1300 1400 1550 1300 1250 2 Quick ratio 0.23733 0 0 0 0 0.0992 Cash + Accounts 284.8 0 0 0 0 124 Current liabilities 1200 1300 1400 1550 1300 1250 Income statement ratio (Consistent) No. Years 2016 2017 2018 2019 2020 2021 1 Gross margin 0.03863 0.04258 0.03365 0.2695 0.0304 0.0279 Gross profit 324.5 417.3 370.2 398 345 276 Sales 8400 9800 11000 14765 11348 9876 2 Net margin 0.02557 0.02254 0.01656 0.0182 0.0227 0.0187 Net profit before tax 214.8 220.9 182.2 198 170 143 Sales 8400 9800 11000 10870 7483 7642 Source: Calculated by the Researcher. Table 4. Ratio analysis of Lidl. Ratio Analysis Spreadsheet Balance sheet ratio (Plausible) No. Years 2016 2017 2018 2019 2020 2021 1 Current ratio 1.0390 1.0406565 1.0029 5.69367 2.81145 2.0849 Current assets 24849 24982 793498 821466 659435 512351 Current liabilities 23916 24006 791185 144277 234574 245743 2 Quick ratio 0.01363 0.01945 0.011109 0.024016 0.01369 0.009579 Cash + Accounts 326 467 8790 3465 3212 2354 Current liabilities 23916 24006 791185 144277 234574 245743 Income statement ratio (Consistent) No. Years 2016 2017 2018 2019 2020 2021 1 Gross margin 0.0458 0.0532 0.0484 0.0662 0.0567 0.0617 Gross profit 356 456 478 654 418 336 Sales 7765 8565 9865 9866 7370 5445 2 Net margin 0.0315 0.0402 0.0571 0.0665 0.0769 0.0793 Net profit before tax 245 345 564 657 567 432 Sales 7765 8565 9865 9866 7370 5445 Source: Calculated by the Researcher. According to the table, it is observed that Aldi faces huge losses after the 2018 financial year due to inappropri- ate operational processes. As per the current information, it is also identified that the organization faces a signifi- cant reduction in annual profit margin that is reduced by 11.28% in the gross profit margin of the 2018 financial year compared with the previous year (craft.co, 2021). In this regard, it can be considered that Sainsbury and Tesco PLC are in better financial condition compared with this enter- prise from the perspectives of competitive advantages. Lidl According to this total ratio analysis of this Lidl organiza- tion, it is seen that the Lidl also getting major losses from the year of 2020 years due to the situation of Covid-19 out- break and the post Covid-19 situations. From the table it is seen that this Lidl was improv- ing their businesses before the situation of Coovoid-19 pandemic. After the Covid-19 this organization are facing huge loss in their business that may provide them a huge
- 5. Performance Analysis through Financial Modelling 43 challenge to continuing their business as their liabilities may be increased. In the year of 2019, they get their maxi- mum market share that is almost 10% in the UK however it is reduced after this Covid-19 spreading. Results & Discussion It is observed that TESCO PLC faces fundamental busi- ness losses in the 2020 financial year due to the COVID-19 pandemic. Sainsbury also experiences significant business losses in the 2021 financial year due to the business losses in 2020 and it reduces the overall sales volume of this enter- prise by 0.3% (about.sainsburys.co.uk, 2021). Aldi faces huge losses after the 2018 financial year due to inappro- priate operational processes and even Lidl also performed in the same lines with huge losses. References [1] Altman, E.I., Iwanicz-Drozdowska, M., Laitinen, E.K. and Suvas, A. (2017). Financial distress prediction in an international context: A review and empirical analysis of Altman’s Z-score model. Jour- nal of International Financial Management & Accounting, 28(2), pp. 131–171. [2] Edward I. Altman (1968). Financial Ratios, Discriminant Analysis and the Prediction of Corporate Bankruptcy, The Journal of Finance, Vol. 23, No. 4., pp. 589–609. [3] Farris, Paul W.; Neil T. Bendle; Phillip E. Pfeifer; David J. Reib- stein (2010). Marketing Metrics: The Definitive Guide to Measuring Marketing Performance. Upper Saddle River, New Jersey: Pearson Education, Inc. ISBN 0-13-705829-2, pp. 88–96. [4] Financing India’s MSMEs (2018). Estimation of Debt Requirement of MSMEs in India, IFC Report. [5] MacCarthy, J., (2017). Using Altman Z-score and Beneish M-score models to detect financial fraud and corporate failure: A case study of Enron Corporation. International Journal of Finance and Account- ing, 6(6), pp. 159–166. [6] Nissim, D., Penman, S.H. (2001). Ratio Analysis and Equity Valu- ation: From Research to Practice. Review of Accounting Studies 6, pp. 109–154. https://doi.org/10.1023/A:1011338221623. [7] Paul Barnes, (2006). The Analysis and Use of Ratios: A Review Arti- cle, Journal of Business Finance & Accounting, Wiley Publications, Vol. 14, Issue-4, pp. 449–461. [8] Petrit Hasanaj1 & Beke Kuqi (2019), Analysis of Financial State- ments: The Importance of Financial Indicators in Enterprise, Humanities & Social Science Research, Vol. 2, No. 2; 2019 ISSN 2576-3024, E-ISSN 2576-3032 https://doi.org/10.30560/hssr. v2n2p17, pp. 12–19. [9] SME Competitiveness Outlook (2020), COVID 19: The Great Lock- down and its Impact on Small Business, International Trade Centre. [10] Stein, Peer, Tony Goland and Robert Schiff (2010). Two Trillion and Counting: Assessing the Credit Gap for Micro, Small, and Medium- size Enterprises in the Developing World, McKinsey, USA. [11] Tracy, John A. (2004). How to Read a Financial Report: Wringing Vital Signs Out of the Numbers. John Wiley and Sons. p. 173. ISBN 0-471-64693-8. [12] World Bank Development Report (2021), Data for Better Lives, World Bank, Washington D.C.