Financial Risk Measurement of Small and Medium-sized Companies Listed in Bombay Stock Exchange

Abstract

This paper attempts to analyze the financial risk factors of small and medium-sized companies listed in Bombay stock exchanges of India for the period from 2001 to 2011. Financial risk factors are of crucial importance because financial risk factors are uncontrollable from within an organization. Also small and medium sized companies are exposed to financial risk from various aspects of the overall economy. The present study is based on secondary data collected from the annual financial statements of BSE in India. In the course of analysis, descriptive statistics, correlation statistics and regression analysis Alexander Bathory model have been designed. Empirical result shows that financial risk is negatively related with current ratio, net profit margin, net assets ratio, the ratio of fixed assets, positively related with fixed asset turnover, total asset turnover, while no noteworthy relation with debt structure, inventory turnover, accounts receivable turnover.
Keywords: Bathory model, Bombay stock exchange financial risk, Regression, Small and medium-sized enterprises.