Considerations Regarding the Assessment and Measurement of Financial Performance

  • Izabela Diana Hada Ph.D. Student, „1 Decembrie 1918” University of Alba Iulia, România
Keywords: financial performance, ROA, ROE, net profit margin, pharmaceutical field


Financial performance is a complex indicator that has represented and represents a priority, an assurance of profitable economic results, and also a hard to reach indicator. Given the importance and necessity of measuring the financial performance both for the internal and external environment of the economic entity, the main purpose of this article is to present concepts regarding the financial performance: typology, importance, indicators that measure the performance. The paper also aimed to highlight the importance of knowing and measuring performance, based on an empirical study conducted on a sample of five companies in the pharmaceutical field (companies whose object of activity is the retail trade of pharmaceuticals, in specialized stores - CAEN 4773) for which profitability indicators were analysed for a period of fifteen years (2004-2018). The five companies were chosen on the basis of turnover, representing the five best performing companies in the field of trade in pharmaceuticals. The research results show that financial performance is the goal of an economic and social game whose main actors are economic entities, also it is a measure of profit, growth, productivity, value creation, being a complex indicator that confirms the profitability of the business, and performance evaluation involves meeting the requirements of stakeholders. In addition to obtain profit, an entity must focus on sustainable development business, on a capitalization of factors of production, obtaining the best and optimal results in relation to the resources consumed.


[1] Bărbuță-Mișu N. Finanțarea și performanța întreprinderii, Editura Didactică și Pedagogică, București; 2009.
[2] Briciu S. Contabilitatea managerială: aspecte teoretice si practice, Editura Economica, București; 2006.
[3] Burja C, Burja V. Financial performance and the business risk în agricultural sector of Romania, Annals of the Constantin Brâncuși University of Târgu Jiu, Economy Series, 2017, Issue 3/2017: 75-82.
[4] Burja C. Analiză economică, studii de fezabilitate și evaluare, Seria didactica, Alba Iulia; 2013.
[5] Colasse B. Analiza financiară a întreprinderii, Trad: Neculai Tabără. Iași: Editura Tipo Moldova; 2009.
[6] Gruszczynski M. Corporate Governance and Financial Performance of Companies in Poland, International Advances in Economic Research, May 2006; 12 (2): 251–259.
[7] Hada ID, Burja V. "Interference Between Profit And Cash-Flow In Evaluating Economic Performance", Annals of the „Constantin Brâncuşi” University of Târgu Jiu, Economy Series, 2018; 3/2018: 96-101
[8] Jianu I. Evaluarea, prezentarea și analiza performanței întreprinderii: o abordare din prisma Standardelor Internaționale de Raportare Financiară. București: Editura CECCAR; 2007.
[9] Lim C. The Impact of Social Variables on Financial Performance, RAIS Conference Proceedings, April 3-4, 2019, p. 11-19.
[10] Niculescu M., Diagnostic financiar, vol. 2. București: Editura Economica; 2003
[11] Ojo O. Performance appraisal system and its implications on organisation’s performance, The International Journal of Economic Behavior-IJEB; 1(1), 2011: 111-119.
[12] Orhan A, Graham G. Financial performance and reviews of corporate social responsibility reports, Journal of Management Control, December 2014, 25 (3–4): 259–288.
[13] Petcu M. Analiza economico-financiară a întreprinderii: probleme, abordări, metode, aplicații, Ediția a doua. București: Editura Economica; 2009
[14] Pintea MO, Achim MO. Performance - an elvolving concept, Annals of University of Craiova-Economic Sciences Series, 2010, 2(38).
[15] Răscolean I, Monea A. Some aspects regarding meaning of intermediate management balances, University of Petrosani Romania, Annals of the University of Petrosani – Economics; 2014, 14(1): 297-304.
[16] Shen F, Yunwen Ma, Run Wang, Ningning Pan, Zhiyi Meng. Does environmental performance affect financial performance? Evidence from Chinese listed companies in heavily polluting industries,July 2019, Volume 53, Issue 4, pages 1941–1958.
[17] Syed Shah Alam, Vijayesvaran Arumugam, Noor Gani Mohd Nor, Pushpa Kaliappan, Lee Sze Fang. Relationships between Innovation Capabilities, Business Performance, Marketing Performance and Financial Performance: A Literature Review, Business and Management Horizons; 2013; 1(1): 59-73.
[18] Tabără N, Vasiliu A. Relevanța indicatorilor în măsurarea performanțelor întreprinderii, Revista Economica. 2013; 1 (83): 81-93.
[19] Taticchi P, Tonelli, F, Cagnazzo. Performance measurement and management: a literature review and a research agenda, Measuring Business Excellence; 2010; 14 (1): 4-18.
[20] Wagner J. Measuring performance-conceptual framework questions, European Research Studies Journal. 2009; vol.3 : 119-134
[21] Yilmaz I. "Social Performance vs. Financial Performance: CSR disclosures as an indicator of Social Performance," International Journal of Finance & Banking Studies, Center for the Strategic Studies in Business and Finance, 2013; 2(2): 53-65
How to Cite
Hada, I. D. (2020). Considerations Regarding the Assessment and Measurement of Financial Performance. LUMEN Proceedings, 13, 115-129.