Business Success Rate as Example of the Composite Ratio of Business Performance Evaluation Valuation: Baltic States

Abstract

The methodology of the business performance evaluation, in a particular number of the ratios to use, has been extensively developed over the last 30 years and has reached critical mass. According to numerous sources, the number of ratios companies and researchers are using to evaluate the company's business performance has exceeded three hundred. The traditional theory provides five group classifications to make the analysis. The approach was confronted by the groups of researchers providing alternative grouping of the indicators based on the target group/users, functions, and goals. Elaborating on the optimization and systematization of the ratios, the pool of opinion was questioned on the necessity of the composite ratios. Several attempts were made to incorporate and integrate several ratios in one to offer a fast track for the evaluation process. One of the methods for the integrated assessment of success, developed by Barkhatov, Pletnev and Nikolaev, involved a system of indicators for assessing the success of small and medium companies and was initially implemented in Russia. It was tested on 11000 companies and took four years to make the conclusions. The analysis of the author's research was implemented based on the application of the developed methodology for assessing the success of companies – Nasdaq Baltic emitents in Latvia, Estonia, and Lithuania in 2013–19 carried out based on data from accounting reports of enterprises, provided by NASDAQ Baltic. It can be concluded that there is a steady increase in the share of successful companies in the Baltic States over the period under analysis. This is proof of the sustainability of the emitents of the NASDAQ BALTIC.