The Effect of Company's Value Chain Performance on Financial Performance and Stability, Dimensions of Financial Distress and Going Concern

When the company is in a stable state, its value is enhanced from the perspective of investors, creditors, and the general public, and the company's short-term and long-term performance is determined as a function of multiple management policies. Considering that the result of management policies can be evaluated with the value chain performance index of the company, The purpose of this research is to investigate the effect of value chain performance on profitability, financial stability, as well as financial health and going concern. On the other hand, its effect on the company's bankruptcy risk has been investigated.

The statistical population of the research includes all active companies in the Tehran Stock Exchange; However, by applying the necessary restrictions, the number of 142 active companies in the period of 11 years, i.e. from 2011 to 2021, has been examined. To measure the performance of the value chain by purposefully determining the input and output variables, Stochastic Frontier Analysis (SFA) function approach has been used. Also, multiple regression has been used to test the research hypotheses.

The findings of the research showed at the confidence level of 95%, the performance of the company's value chain has a positive effect on the profitability index, financial stability, as well as financial health and going concern. But they significantly have a negative effect on the bankruptcy risk.

The results of the present research showed that the performance of the set of steps in the value chain of listed companies, while improving the financial performance, had a favorable effect on their financial health and stability, as well as their survival, and as a result, the probability of their bankruptcy was reduced. Although the value chain performance evaluation index has a score of less than 50%, the overall performance of companies can contribute to the economic growth and development of the country and the optimal allocation of resources.

Contribution: 

Evaluating the performance of the set of components of the company's value chain in the form of a single index is particularly important for researchers as a result of multiple management policies; In addition, it can help in the proper selection of investors, the correct assessment and advice of consultants and analysts, the decision-making and planning of company managers, as well as the direction and control of the capital market and macroeconomics by statesmen.