Riskiness of Italian firms in the post-crisis period: an outlook through financial ratios

The paper aims to analyze riskiness of Italian firms in productive sectors (excluding financial and public sector) by means of a set of financial ratios calculated on the basis of annual financial reports collected by Chamber of Commerce for Italian limited firms. This large administrative source (integrated with business demographic information coming from ISTAT business register ASIA) enables to elaborate data concerning the limited enterprises in Italy for a period lasting from 2008 to 2014 (the period after the Big Recession). The limited firms represent a large and significant part of the economy. Several areas are identified as relevant in building riskiness indicator: leverage ratios, efficiency measures, performance measures, and liquidity measures. The riskiness level is analyzed by means of latent variables models, therefore a “synthetic’’ indicator summarizing the data information and representing the riskiness of Italian firm in the period is built.