Article Per Year (5 Year)
p-Index From 2021 - 2026
0.23
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All Journal Journal of Management and Social Sciences
Adhis Helsa Aurellia
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Decision Sciences, Operations Research & Management Social Sciences Transportation

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Are Financial Ratios Universal? A Cross-Country Perspective Dian Indrianto; Dwi Dewianawati; Erry Setiawan; Buyung Cahya Perdana; Adhis Helsa Aurellia
Journal of Management and Social Sciences Vol. 5 No. 2 (2026): May: Journal of Management and Social Sciences
Publisher : Sekolah Tinggi Ilmu Administrasi (STIA) Yappi Makassar

Show Abstract | Download Original | Original Source | Check in Google Scholar | DOI: 10.55606/jimas.v5i2.2391

Abstract

This study examines the efficiency of financial ratios in assessing corporate performance across countries. Although financial ratios are widely used as concise indicators of profitability, liquidity, solvency, and market value, their interpretive accuracy may vary across institutional, regulatory, financial, and macroeconomic environments. The objective of this study is to conceptually evaluate whether financial ratios can function as universally comparable performance measures in heterogeneous cross-country settings. Using a qualitative literature-based method, this study synthesizes prior findings on financial ratio analysis, financial statement comparability, market efficiency, regulatory enforcement, and macroeconomic stability. The findings indicate that profitability, liquidity, solvency, and market-based ratios are context-dependent indicators rather than universally stable measures. Their efficiency is influenced by accounting standards, audit quality, leverage norms, tax systems, capital market maturity, and macroeconomic volatility. The study proposes a contextual framework for interpreting financial ratios according to their sensitivity to national conditions. The implication is that researchers, analysts, and investors should combine ratio analysis with institutional and macroeconomic diagnostics to reduce biased performance interpretation in cross-country corporate evaluation.
Co-Authors Buyung Cahya Perdana Dewianawati, Dwi Dian Indrianto Erry Setiawan