Accounting for Risk

Journal of Accounting Advances, (2020) 12(1): DOI: 10.22099/JAA.2021.39285.2077 Journal of Accounting Advances (JAA)Journal homepage: www.jaa.shirazu.ac.ir/?lang=en Developing Fama and French Multi-Factor Pricing Model Using a Fundamental Factor Based on Accounting CharacteristicsSanaz Aalamifar1, Abdollah Khani2*, Hadi Amir3 1. Ph.D. Candidate, Department of Accounting, Faculty of Administrative Science and Economics, University of Isfahan, Iran. sanazaalamifar@ase.ui.ac.irCorresponding author, Associate Prof., Department of Accounting, Faculty of Administrative Science and Economics, University of Isfahan, Isfahan, Iran. a.khani@ase.ui.ac.irAssistant Prof., Department of Economic, Faculty of Administrative Science and Economics, University of Isfahan, Isfahan, Iran. h.amiri@ase.ui.ac.ir ARTICLE INFABSTRACT Received: 2020-12-21Accepted: 2021-04-03 The purpose of the present research is to introduce a fundamental factor, based on related accounting characteristics (including earnings to price, book to price, sales growth rate, accruals, investment and growth in net operating assets), as a factor in the structure of Fama and French asset pricing model. The mentioned factor has been deducted from consumption theory and accounting principles and assumptions. In order to test the hypotheses, data of 345 companies listed in the Tehran Stock Exchange (TSE) and Iran Farabourse market, during the period 2006 to 2020, were used. To evaluate the performance of the multi-factor asset pricing model, test assets were ranked in two categories (once considering expected return characteristic, and once without considering the company’s expected return characteristic). In the following, using time series regression approach, the performance of augmented multifactor asset pricing models and corresponding conventional ones are compared. The results of this research showed that development of the research models with the fundamental factor based on mentioned accounting characteristics, can lead to improving the performance of these multi-factor models in explaining the variation in (expected) stock returns, and the test assets that considered the company’s expected return performed better compared to those that did not. The findings of this study indicate that the information in the financial statements has information content and can play an undeniable role in determining the expected return. * Corresponding author: Abdollah Khani Associate Prof., Department of Accounting, Faculty of Administrative Science and Economics, University of Isfahan, Isfahan, Iran. E-mail: a.khani@ase.ui.ac.ir 1-IntroductionIdentifying the correct asset pricing model has long been an important topic in the thematic literature of financial economics. Such a model not only explains stock returns, but also increases the ability to predict abnormal returns. The first models for estimating returns date back to the 1960s, when Markowitz’s (1952) new theory of securities attracted the attention of researchers. The first model for estimating returns was the capital asset pricing model (CAPM) which was presented by William Sharp (1964). In his research, William Sharp showed that return on asset was a function of line of market risk premium. But from 1975 to 1990, deviations and anomalies related to the CAPM model gradually became apparent. Following the recognition of these anomalies in accounting, in this study, based on the research of Penman and Zhou (2018), a fundamental factor based on accounting characteristics is introduced. For this purpose, consumption theory and accounting principles and assumptions will be used for initial identification; and empirical tests will be used for final identification of accounting characteristics that affect earnings growth and expected returns. Then these identified characteristics are summarized in a factor called the fundamental factor. Therefore, the purpose of this study is to evaluate the possibility of improving the performance of the asset pricing factor models in explaining the stock returns by adding a fundamental factor based on accounting characteristics. The hypothesis, methods, result and discussion and conclusion have been explained below. 2-HypothesisThe aim of this research is to introduce a fundamental factor based on accounting characteristics as a factor in the structure of the Fama and French asset pricing models. For this purpose, data of 345 companies, listed in the Tehran Stock Exchange, during the period 2006 to 2020 have been used. In order to achieve the objectives of this research, the following hypothesis are developed:H1: Adding a fundamental factor, based on accounting characteristics, to Fama and French three-factor model, improves its performance in explaining the stock returns.H2: Adding a fundamental factor, based on accounting characteristics, to Carhart four-factor model, improves its performance in explaining the stock returns.H3: Adding a fundamental factor, based on accounting characteristic, to Fama and French five-factor model, improves its performance in explaining the stock returns.H4: Adding a fundamental factor, based on accounting characteristics, to Fama and French six-factor model, improves its performance in explaining stock returns. 3- MethodsThis is an applied research in terms of purpose and an inferential and descriptive research, in terms of method. For data analysis and hypothesis testing, the data have been collected from 345 companies listed in the Tehran Stock Exchange for a period of 15 years (2006 to 2020). For initial calculations, the Excel and Ox Metrics software tools, and for the final analysis, Eviews and State software tools were used. 4- ResultsThe results of this research showed that a research model with fundamental factor, based on accounting characteristics, has a better performance in explaining the stock returns compared to the corresponding multifactor pricing models; and the tests that considered the company’s expected return, performed better compared to those that did not. 5- Discussion and Conclusion Findings of this research indicate that adding a fundamental factor based on accounting characteristics to Fama and French three-factor, Carhart four-factor, Fama and French five-factor, and Fame and French six-factor models, improves their performance in explaining the stock returns. In other words, developing a model with a fundamental factor, based on accounting characteristics, can lead to an improvement in the asset’s pricing model. This is a result of all the efforts that have been made since the time of Sharpe (1964). In addition, the research findings show that despite the research and efforts that have been made in the field of assets’ pricing, it is still possible to further develop this model from other angles in the financial field.

Financial statement analysis is an essential process that helps businesses, investors, and other stakeholders assess an organization's financial health, stability, and overall performance. It involves a detailed examination of financial data, including income statements, balance sheets, and cash flow statements, to gain insights into a company’s profitability, liquidity, and solvency. Various analytical techniques, such as ratio analysis, trend analysis, and comparative financial analysis, are applied to interpret financial information effectively. Ratio analysis helps measure key financial aspects like profitability, liquidity, and financial leverage, while trend analysis enables the identification of financial patterns and forecasting future performance. Comparative analysis allows businesses to benchmark their financial position against competitors and industry standards, ensuring they stay competitive in the market. This study aims to explore the significance of financial statement analysis, its methodologies, and its impact on decision-making. Financial analysis provides valuable information that aids in strategic planning, investment decisions, risk management, and overall business sustainability. By thoroughly understanding the financial strengths and weaknesses of a company, stakeholders can make well-informed strategic choices, optimize resource allocation, and improve operational efficiency. Additionally, financial analysis plays a crucial role in assessing the creditworthiness of businesses, enabling banks and financial institutions to determine loan eligibility and lending risks. Investors rely on financial statement analysis to evaluate the potential risks and returns associated with investments, ensuring that they make sound financial decisions. While financial statement analysis offers numerous benefits, it also comes with challenges, such as data inaccuracy, financial statement manipulation, and market fluctuations, which can impact the reliability of the analysis. Additionally, financial models can be complex, requiring expertise to interpret data accurately. The integration of advanced technologies, such as artificial intelligence and big data analytics, has improved the efficiency and accuracy of financial analysis, enabling businesses to make data-driven decisions with greater confidence. Furthermore, this study examines how financial analysis influences corporate sustainability and long-term business growth. Companies that implement strong financial analysis practices can better manage their cash flow, reduce financial risks, and enhance overall profitability. A well-structured financial analysis framework ensures transparency, regulatory compliance, and investor confidence, contributing to business stability. As financial analysis continues to evolve with technological advancements, businesses and investors must adopt modern analytical tools to enhance their decision-making capabilities Keywords : Financial statement analysis, financial health, business performance, investors, stakeholders, income statement, balance sheet, cash flow statement, ratio analysis, trend analysis, comparative analysis, profitability, liquidity, solvency, strategic planning, investment decisions, risk management, business sustainability, resource allocation, operational efficiency, creditworthiness, financial institutions. .

Objective: The study aims to determine the impact of e-learning on learning outcomes in the Jordanian Objective: Accounting professionals who are directly responsible for the preparation of the reports must use the principles and techniques of Forensic Accounting which help them to investigate legitimate financial activity and conduct due diligence reviews to properly assess the activity of economic entities. This paper identifies the importance of financial statement analysis tools and techniques in this process, being identified as Fraud Indicators of financial statements indicators. Theoretical Framework: Business development plays a vital role in economic development, so the effective and efficient management of activities carried out by businesses is to a great importance. But their identification in financial report is also object of fraud activities, a phenomen, which is turning into a headline of the day, especially for developing countries and also in Albania. Method: In the study are been taken into consideration the financial statement of 70 SMEs that carry out commercial activity and that through financial statements reports it was studied how “red flags” can be identified in financial reporting indicators to further investigate whether fraud conditions are met or not. The paper tests the relationship between two important indicators for every economic entity, which are liquidity and profitability as the most studied indicators. Results and Discussion: Data analysis showed that there was a significant statistical relationship between liquidity and performance indicators, which serve as a starting point for going into further use of technical forensic accounting techniques by professionals. Originality/Value: This study contributes to the literature with an empirical study on techniques and principles of Forensic Accounting and Financial Statements Analysis. Solvency analysis helps us to identify those transactions for which accounting professionals and not only should focus to further deepen the investigations based on the techniques and principles of forensic accounting. Based on the findings of this study as well as those of other researchers, we recommend to professionals that the use of financial statement analysis instruments in the investigation process is a key factor.

This study aims to determine the application of accounting principles that have been carried out by mosques with mosques that still do not apply accounting principles so that the accountability of their financial statements can be relied upon. This study uses the type of Qualitative Research and Descriptive Approach method, namely analyzing and describing the Application of Accounting Principles and Financial Management in Mosques in Kotanopan District, Mandailing Natal Regency. The data used in this study are primary data and secondary data. The data collection technique is field research with the form of observation interviews, documentation, and content analysis. From this research it is known that the application of accounting principles has a very large influence on the accountability or accountability of the mosque's financial statements. Based on data collected from various sources, it can be seen that the principles that are less considered in making mosque financial reports are the principle of full disclosure and the principle of realization, so that the accountability of mosque financial reports becomes less transparent. Then to account for the mosque's financial statements, the mosque manager has similarities in providing information to the public and interested parties in the mosque's financial statements, but differs in making financial reports.

The study examined on how financial analysis tools can be used on the financial institution in the global pandemic crisis event. The Financial analysis of a financial institution is based on the financial tools such as the results of financial statements' analysis, the Company valuation methods, Due Diligence, Qualitative factors, and Options –based valuation. The financial tools can be used to make a decision on the acquisitions of the Financial Institution. Forecasting Financial Statement under COVID-19, the global pandemic is very complex and cannot be predicted accurately. The Financial statements' prediction is impacted heavily by the global pandemic, COVID-19 resulting in negative economic growth in the world. The primary data collection for this study were collected from a quoted public list financial company’s financial statement. The Investment decision will be based on the future earnings of the Company, at the same, the past financial years’ performance and financial position which can help to make a viable decision. The final outcome of this study concluded that financial analysis cannot be done in the logical manner and analysis should be a more resilient. The future study on the financial statement analysis tools need be develop a suitable model under any crisis event.

Financial statement analysis has been used to assess a company’s likelihood of financial distress – the probability that it will not be able to repay its debts. Financial statement analysis was used by credit suppliers to assess the credit worthiness of its borrowers. Today, financial statement analysis is ubiquitous and involves a wide variety of ratios and a wide variety of users, including trade suppliers, banks, creditrating agencies, investors and management, among others. Financial distress refers to the inability of a company to pay its financial obligations as they mature. Empirically, academic research in accounting and finance has focused on either bond default or bankruptcy. The basic issue is whether the probability of distress varies in a significant manner conditional upon the magnitude of the financial statement ratios. This monograph discusses the evolution of three main streams within the financial distress prediction literature: The set of dependent and explanatory variables used, the statistical methods of estimation, and the modeling of financial distress. For over 100 years, financial statement analysis has been used to assess a company’s likelihood of financial distress – the probability that it will not be able to repay its debts. Financial statement analysis was used by credit suppliers to assess the credit worthiness of its borrowers. In many cases, there was little alternative, reliable information, other than the general reputation of the borrower. A major force for the audit of financial statements arose from the demand to help ensure more reliable financial statements. For example, major users were trade suppliers allowing companies to purchase inventory on credit until the goods could be resold. For these users, there was an emphasis on shortterm ability to repay, given the focus on ability to repay over the period of inventory turnover (typically a matter of 30-60 days). In this context, the current ratio (the ratio of current assets to current liabilities) was one of the first and most prominent ratios used.1 Today, financial statement analysis is ubiquitous and involves a wide variety of ratios and a wide variety of users, including trade suppliers, banks, credit-rating agencies, investors and management, among others. Moreover, financial statements are only one among many sources of information about a company. Financial distress refers to the inability of a company to pay its financial obligations as they mature. Empirically, academic research in accounting and finance has focused on either bond default or bankruptcy. The basic issue is whether the probability of distress varies in a significant manner conditional upon the magnitude of the financial statement ratios. This monograph discusses the evolution of three main streams within the financial distress prediction literature: the set of dependent and explanatory variables used, the statistical methods of estimation, and the modeling of financial distress. The outline of the monograph is as follows: Section 1 discusses concepts of financial distress. Section 2 discusses theories regarding the use of financial ratios as predictors of financial distress. Section 3contains a brief review of the literature. Section 4 discusses the use of market price-based models of financial distress. Section 5 develops the statistical methods for empirical estimation of the probability of financial distress. Section 6 discusses the major empirical findings with respect to prediction of financial distress. Section 7 briefly summarizes some of the more relevant literature with respect to bond ratings.Section 8 presents some suggestions for future research, and Section 9 presents concluding remarks.

Financial statements are the main source of information showing the performance of an enterprise and its financial state. They are need for business management, analysis, internal and external audit, owners and state, investors, society. The set of financial statements is prepared by summarizing the company's financial year data. To prepare accountability, data is pre-accumulated and grouped in accounting records, synthetic and analytical accounting registers according to general principles: continuity, periodicity, permanence, prudence, monetary measure, accumulation, neutrality, relevance of content, importance of information (the most important ones, and necessary to know). These accounting principles are followed in the EU countries. According to A. Ivanauskienė, an annual stocktaking must be carried out before the annual financial statements are drawn up [3]. Accounting policy part includes accounting principles and a brief description of accounting methods and rules that are used by the entity in accounting and financial reporting. [2]. Accounting policies are general accounting principles, accounting methods, and rules intended for accounting management, formation and submission of financial - the definition is provided by A. Ivanauskienė [3]. For more information on accounting policies is written 6 BAS - the explanatory note of the accounting policy part should state that 'financial statements are prepared in accordance with business accounting standards. Other legal acts that have been used for accounting management and financial reporting purposes [1] are also included. At the end of the company's financial year, we have to prepare not only financial statements, but also to analyze it properly. Because only by submitting an annual analysis of financial statements we will be able to evaluate the company's performance and position. We will be able to determine whether the company's performance is profitable, whether by putting together and discussing all the reports, there is a risk for the company's future plans. Problem and Relevance - it is very important that the financial accountability reports would be prepared correctly and would perform their intended purpose. Accurate accumulation and systematization of accounting information allows to account correctly assets, capital, income and expenses. Otherwise, false information will result in distorted analysis results and its users will make wrong decisions. The aim of the work is to analyze the content of financial statements, principles of formation and use of data. Research object - financial accountability. Research objectives: 1. To analyze the essence and importance of financial accountability, to provide a systematic description of financial accountability. 2. To provide a procedure for regulating accountability and how to allocate it. 3. To set requirements for financial reporting. 4. To prove the importance of financial reporting with respect to companies. Research methods - analysis of scientific literature, including the comparison of theoretical statements, methods of generalization, logical and graphical representation. Conclusions: Financial statements should reflect fair information about the financial position and performance of the entity, as well as provide necessary information to internal and external users and disclose relevant information about significant events occurring during the reporting period. Preparation of financial statements is regulated by: Law on Accounting of the Republic of Lithuania, Law on Financial Accountability of the Republic of Lithuania, Consolidated Financial Accountability Compilation of the Republic of Lithuania, International Business Accounting Standards, National Business Accounting Standards, Accounting Policies shaped in the company. The data presented in the annual financial statements shall be prepared in accordance with the general accounting principles. The information received in the reports must be compared to the previous reporting periods and to the performance of other companies. The data obtained are needed for economic analysis, audit, planning of the company performance and forecasting

Stock exchange investment in Tanzania is growing fast, and many people of different varieties of income are participating in the purchase of shares commonly known as stock exchange. However, there is seemingly little concern on the use of financial analysis on the part of local individual investors when purchasing the shares. Hence, this paper presents the findings of the study on financial analysis as a consideration for stock exchange investment decision making in Tanzania. The study was conducted for four months from July to October 2006. It adopted a survey study incorporating all six registered brokers in Tanzania located in Dar es Salaam. First, the introduction was given, which provided the essentials and the need for financial statements analysis as far as decisions regarding investment is concerned, after which the literature review was done. This was followed by a presentation of the role of Dares salaam stock exchange. Subsequently, the methodology of the study was given, followed by data analysis and discussion of findings. Finally, conclusions and recommendations were given. The paper concluded that most of investors in Tanzania do not depend on the financial statements analysis of the firms when investing mainly because most of these investors have not acquired knowledge on the importance of financial statements in making decisions regarding the investment. However, big investors such as financial institutions and firms do consider financial statement analysis when investing. Key words: Financial analysis, stock exchange, investment decisions, Tanzania.

Financial statement analysis is used to determine the company's financial performance as a consideration in making decisions and evaluating the company's financial performance for the next period. However, the financial statements prepared by each company do not fully meet the applicable accounting standards and principles. For this reason, the accounting process requires Financial Accounting Standards (SAK) that contains guidelines for every transaction made by the company. This standard allows interested parties to interpret and compare its financial statements with other companies. PT Metropolitan Kentjana Tbk has been able to present information about the basis for preparing financial statements, providing information that has not been presented in the financial statements including displaying the general description of the company, accounting policies, and an overview of accounting policies, and others. This shows that the financial statements of PT Metropolitan Kentjana Tbk for the notes to the financial statements have met the existing standards. The financial statements presented by PT Metropolitan Kentjana Tbk have met the requirements in PSAK 01

Learning outcomes After completion of the case, students will be able to understand the following: how to understand financial statements, income statements and cash-flow statements with the help of ratios; understand the concept of shareholding pattern along with different entities, namely, non-promoters, foreign institutional investor, domestic institutional investor and others; financial ratio analysis with traditional DuPont and extended DuPont analysis; understand the differences between comparable firms; how to analysis return, risk, covariance, correlation, market risk and capital assets pricing model (CAPM) and how to suggest an appropriate investment strategy. Case overview/synopsis The case presents company background and financial statements of four companies listed under departmental stores in India, namely, Vmart retail, V2 retail, Avenue Supermarts (known as DMart) and future retail. Students are asked to determine, which company is performing better to make a recommendation for investment. Students learn the tools of financial ratio i.e. profitability, efficiency, liquidity and market-based ratio along with the traditional DuPont decomposition and the extended DuPont analysis. Students also learn how to measure stock return, standard deviation, covariance, correlation, market risk and CAPM. Complexity academic level This case is suitable for management accounting, financial analysis and security analysis and portfolio management courses at the post-graduate or graduate levels. The case can be used in similar courses such as in financial statement analysis courses or security analysis and portfolio management courses. Supplementary materials Teaching Notes are available for educators only. Please contact your library to gain login details or email support@emeraldinsight.com to request teaching notes. Subject code CSS: 1 Accounting and finance.

The main purpose of this paper is to address the existing gap in traditional analysis methods by integrating strategic management and environmental aspects, and to establish a theory of quality analysis of corporate financial conditions. This paper uses the method of combining enterprise strategy and financial statement analysis to analyse the quality of assets, profit and cash flow of enterprises, and then evaluates the allocation of strategic resources, the effect of strategy implementation and the ability of strategic support. This study demonstrates that the application of the theory of financial condition quality analysis can enhance the assessment of enterprises in terms of their market expansion ability, strategic layout ability, and internal governance ability, and this approach is aligned with the requirements of users. Based on the link between strategic management and financial statement analysis, this paper establishes a theoretical framework for financial position quality analysis. The theoretical framework of financial condition quality analysis established in this paper solves the limitations of traditional financial analysis methods and existing financial quality analysis theories, and opens up a new way for corporate financial analysis. Based on the analysis framework, this paper analyses the three aspects of Midea Group's cost management, diversified strategic layout and global breakthrough strategy, and puts forward suggestions for the future development of the enterprise.

In today's dynamic business environment and intensified competition among companies, the study of financial stability and management efficiency is crucial for any successful organization. Therefore, the analysis of financial statements is a necessary tool for enterprises to make rational management decisions and achieve strategic goals. Additionally, financial analysis is essential in the context of increasing competition and market volatility. The capacity to promptly respond to changes in the economic environment and adapt strategies is increasingly crucial for ensuring enterprise efficiency. Financial statement analysis, in particular, enables companies to assess their financial strength, determine optimal development strategies and make informed decisions in a changing market environment. Financial statement analysis is a crucial aspect of successful management. It involves a systematic analysis of an enterprise's financial and economic activities, including its structure, dynamics, and effectiveness. The scientific literature reviewed in this paper emphasizes the significance of financial statement analysis as a tool for identifying risks, formulating management strategies, and enhancing financial stability. In particular, the article discusses various aspects of the analytical approach, methods and tools of analysis that can help companies make informed management decisions. This article aims to explore the role and importance of financial statement analysis in business management. It covers various aspects of the analytical approach, methods, and implements of analysis to determine how this tool can become crucial for making informed strategic and operational decisions.

- Financial statement analysis will help the company to estimate the level of risk, uncertainty and result in the formulation of a better plan. Financial statement analysis aims to determine the extent to which the achievement of work has been achieved by all divisions in the company. One of the financial statement analysis is Profitability ratio. Profitability ratios are used to measure the company's ability to earn profits. The purpose of this study is to determine and identify financial performance at Bank Central Asia Tbk period 2011 to 2015. In this study, the authors use three types of data collection methods is library research Reading literature and books that examine theories about profitability ratios and the theoretical basis of the content of writing. Observations of non-behavioral methods of observation of financial statements published by BCA Tbk during the period of 2011 and 2015. The method of taking the conclusion that after the analysis process has been completed, then the conclusion is drawn by drawing conclusions from the data analysis done before. Based on the results of the discussion can be summarized as follows based on the financial statements of BCA there is a decrease in OM from 2011 to 2015. Based on the financial statements of BCA there is a decreased NPM from 2011 to 2015. Based on BCA's financial statements there is an increase of ROI value from 2011 to 2015. Based on financial statements BCA there is a decreased the value of ROE from 2011 to 2015. Based on BCA's financial report, there is an increase of ROA value from 2011 to 2015. Key words :Ratio Analysis, Financial Performance, Profitabiliy

The technique of determining a company's performance and financial features through accounting and financial statements is known as financial performance analysis. The goal of this investigation is to find out how effective and efficient the company's management is, as evidenced by financial records and reports. A company's performance can be judged by its financial outcomes, i.e., the size of risk and profitability, which are the two key criteria that define the level of concern. The technique of determining a company's performance and financial features through accounting and financial statements is known as financial performance analysis. The goal of this investigation is to find out how effective and efficient the company's management is, as evidenced by financial records and reports. A company's performance can be judged by its financial outcomes, i.e., the size of risk and profitability, which are the two key criteria that define the level of concern. A financial decision that adds risk lowers the firm's worth; on the other side, a financial decision that enhances earnings raises the firm's value. The two most fundamental components of any business concern are risk and profit. The major figures in the financial statements, as well as the noteworthy relationships between them, are the subject of the financial analysis. The practise of evaluating the relationship between the components of a financial statement in order to better understand the entity's performance and performance is known as financial statements analysis. The purpose of this research was to use a comparison analysis to analyse TVS' financial performance in 2023 and 2024. The TVS motor has been found to be both efficient and cost-effective through research. Keyword- Comparative Analysis, TVS Motors, Financial Performance

Each company has financial statement ratios, including solvency ratios. The financial statements required by a company to measure and assess the performance of the company because in it there is important information about the company's earnings and financial position of the company's capabilities. The financial statements can be analyzed to see the condition of the company. Type of financial statements analysis varies according to the interests of the parties will conduct the analysis. One way to analyze financial reports by performing the analysis of the solvency ratio. The purpose of this study was to determine the level of solvency PT Cemerlang Jakarta. Solvency ratio analysis will provide a better understanding of the financial condition analyzed. Indicators used in the solvency ratio analysis consists of: Total Debt to Total Assets Ratio, Debt to Equity Ratio / Equity Ratio Debt, Long Term Debt to Equity Ratio. From the analysis of financial statements in 2011 and 2012 Jakarta PT Cemerlang changes, where in 2011 the financial statements of the company in 2012 while insolvable financial statements solvable. Analysis of the financial statements required to monitor the progress of the company and to anticipate the various possibilities that will occur at the company, so that the management company can make decisions quickly and accurately. Keywords: Solvency Ratio, Financial Statements