Vakhtang Berishvili, Nikoloz Kavelashvili


The main purpose of the research is to identify two types of benchmarks required for the financial ratios analysis based on Georgian data. To obtain the benchmarks of the first type - industry average, the financial statements for 2018-2019 years of 131 companies in the manufacturing industry were processed. Due to absence of financial market data, a market imitation study was conducted to obtain the second type of benchmarks – ratios of the high performance companies. To achieve this, a survey of 26 representatives of financial industry companies was conducted through a questionnaire, containing the financial ratios of 9 companies from manufacturing industry. Respondents selected companies whose stock prices, in their opinion, would increase or decrease according to their financial ratios. To check the validity of the results we conducted: a follow-up interview with several respondents, a regression analysis of results, and a financial analysis of two high-rating and three low-rating companies using forecasts and free cash flow valuation.

As a result of the research, we obtained two types of benchmarks - industry averages and a set of ratios of "high performance" companies. We saw that none of the coefficients taken separately explain the respondents' choices, and that the survey results are consistent with the forecasts and the analysis of the value of the company. During the research, we developed a methodology on how to identify high-performing companies despite virtually non-existent capital market in Georgia. The methodology can be used for other, similar studies. The results are important for anyone who uses financial analysis. It will be interesting for researchers, for example, to study current processes in economics and companies and, hopefully, will contribute to capital market development in Georgia.


financial analysis; financial benchmarks; Georgian industry average ratios; imitational model of capital market


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