Financial Ratio and Efficiency Analysis as a Competitive Advantage of Wine Manufacturing Firms. The Case of Greece

Abstract

In the Greek economy, the wine industry is one of the most important sectors, not just for the domestic beverage market, but also for the development and promotion of Greek traditional products abroad. The wine sector has been recognized as one of the most significant economic activities in many countries, both in terms of employment and revenue. Financial analysis is crucial to understanding the economic condition of wine production companies and ensuring the sustainability of the industry. Financial ratio analysis provides insights into the factors that determine economic utility, which is increasing profitability, reducing risk, and providing liquidity to economic entities. The main purpose of the paper is to examine and analyze the financial situation of companies active in the wine industry. This will evaluate how well they adapt to the changing market environment. By analyzing the financial profile of the companies, an effort was made to identify the problems that they faced as well as analyzed their efficiency. Cluster analysis would be conducted in order to determine their level of competition. According to the results, large companies were able to pay their current liabilities, fixed costs, interest, dividends, as well as better handle any current losses. The large companies have a high level of solvency and display rapid circulation of their stocks. Small and medium-sized businesses had difficulties meeting their current obligations as well as dealing with potential losses. Indicators measuring the efficiency of the utilization of assets in large and medium-sized enterprises were relatively stable, but a significant over-investment of capital relative to sales could lead to obligations not being met in the future. The debt to assets ratio of large companies was higher than that of medium and small companies, which must be addressed by increasing the firms’ liquidity to avoid debt service problems.