Abstract
Financial health of companies in certain region is the foundation on which the prosperity of region is based. If companies in region are healthy and successful, there are good reasons to believe that all social problems can be solved relatively easy. Regional economic development in Latvia at present time happens inhomogeniously – there is a growing region near Riga where economic and social development is going very good, and there are regions where results are worse. The main purpose of this paper is to describe, apply and provide critical review the existing information technologies based possibilities for Latvian companies' financial health evaluation. We focus on the set of financial ratios necessary for economic health evaluation and homepages parsing based methods for these ratios determination for Latvian companies.
Highlights
The main purpose of this paper is to describe, apply and provide critical review the existing information technologies based possibilities for Latvian companies’ financial health evaluation
We focus on the set of financial ratios necessary for economic health evaluation and homepages parsing based methods for these ratios determination for Latvian companies
The main purpose of this paper is to describe the information technologies based possibilities for Latvian companies’ financial health evaluation
Summary
The main purpose of this paper is to describe the information technologies based possibilities for Latvian companies’ financial health evaluation. = Long Term Debt / Invested Capital = Short Term Debt / Invested Capital = Long Term Debt / Total Liabilities = Short Term Debt / Total Liabilities = Total Liabilities / Total Assets = Working Capital / Market Cap. Comparing ratios of two company financial health evaluation approaches, we can see that they use very similar sets of ratios, but practically oriented system pays more attention to capital structure. The second step in financial health of company evaluation after the set of financial ratios determination is the financial ratios comparison with optimal values In several cases such comparison can be performed relatively easy – for example, for all profitability ratios the recommendation of strategic management theory is that in long term perspective profit should be higher, that average profit in industry. In many cases the determination of optimal values of financial ratios is not so simple and it is necessary to consider which financial information is available and which is not
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