Abstract
The author analyses financial ratios of Lithuanian enterprises by economic sectors in the period from 1998 to 2008. During the period in question, which was selected consciously and purposefully, Lithuanian economy experienced two recessions: the first one took place after the Russian crisis 1998 and the second started in 2008, together with the global financial crisis. In the period between the two crises, a rapid economic development was observed.In the paper, the efficiency of the sectors of Lithuanian economy is assessed using various financial ratios, reflecting various aspects of performance of an economic entity: its capability to secure income, to perform profitably, to properly manage liabilities, to make proper use of available potential, to avoid jeopardising its further performance. Since no common methodology for the assessment of economic efficiency has been developed, it is offered to form an integral aggregate ratio to make possible the intercomparison of economic sectors and to determine the level of efficiency based on a set of financial ratios but not on each of them separately. The experiments and calculations performed showed that most suitable is the weighted arithmetic mean method.
Highlights
After the period of a rapid annual growth in gross domestic product, which started in 2000, Lithuania – to other European and world countries – is facing economic difficulties
The results of the methodologically based calculation of the aggregate efficiency ratio for Lithuanian economic sectors and assessment of their efficiency reflect the current situation in Lithuanian economic sectors
It may be stated that the method used in the formation of the aggregate efficiency ratio is suitable for assessing the efficiency of economic sectors
Summary
After the period of a rapid annual growth in gross domestic product, which started in 2000, Lithuania – to other European and world countries – is facing economic difficulties. The present article examines the challenges met by Lithuanian economy from the aspect of the efficiency of national economic sectors, because the efficiency of performance – contributing to the increase in productivity, reduction in unnecessary costs, etc. In Lithuania, the Department of Statistics to the Government of the Republic of Lithuania (Statistics Lithuania) is the institution producing information on the financial ratios of enterprises and their changes. In this field, efforts have been made to form an integral aggregate ratio for the assessment of the efficiency of economic sectors – to make possible an intercomparison of economic sectors and determining the level of efficiency based on a set of financial ratios but not on each of them separately
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