A Study on Financial Risk Assessment Practices in a Mid-Sized Audit Firm
Saikumar S1*, Dr. E. Nafeza2
Abstract
The present study titled “Financial Performance Analysis of Small-Scale Companies based on MCA Data” aims to evaluate the financial health, efficiency, and stability of selected small-scale companies using secondary data obtained from the Ministry of Corporate Affairs. Small-scale companies play a vital role in economic development, employment generation, and industrial growth in India. However, due to limited resources and financial constraints, it becomes essential to assess their financial performance in a systematic and analytical manner.
The study is based on the financial statements of selected companies for the available accounting periods. Various financial tools and techniques are applied to analyze performance, including ratio analysis, the DuPont Model, and the Altman Z-Score. Ratio analysis evaluates profitability, liquidity, solvency, and operational efficiency, while the DuPont Model provides deeper insights into return on equity. The Altman Z-Score is used to assess financial distress and bankruptcy risk. The analysis is conducted using Microsoft Excel with tables and graphical representations.
The findings indicate variations in financial performance among companies, with some showing strong stability and others indicating moderate or high risk. The study concludes with suggestions for improving financial performance and achieving long-term sustainability.
Keywords:
Financial Risk Assessment, Profitability Analysis, Cash Flow Analysis, Capital Structure Analysis, Liquidity Risk, Comparative Analysis
