




































American Research Journal of Economics, Finance and Management 

Volume 10 Issue 1, January-March 2022 

ISSN: 2836-9416 

Impact Factor: 4.85 

Journal Homepage: https://americaserial.com/Journals/index.php/ARJEFM, 

Email: contact@americaserial.com 

Official Journal of America Serial Publication 
 

American Research Journal of Economics, Finance and Management 
https://americaserial.com/Journals/index.php/ARJEFM, Email: contact@americaserial.com 

26 | P a g e  

ANALYZING FINANCIAL BUSINESS RISKS: A CASE STUDY OF 
CALI'S DYNAMICS 

 
 

1Dr. Maria E. Gomez Rios2 and Dr. Carlos A. Rodriguez Gaviria 
1Research Professor, Department of Administration and Economics, University Autonoma of 

Manizales, Colombia 
2Research Professor, Department of Management and Economics, University Autonomy of Manizales, 

Colombia 
 

Abstract: Small and medium enterprises (SMEs) play a pivotal role in economies worldwide, 
comprising a significant majority of business networks. In Colombia, for instance, SMEs constitute 
approximately 94% of the enterprise system, driving economic activity. However, despite their 
importance, these enterprises often lack the necessary support to thrive. Recent governmental policies 
have sought to address this issue by promoting SME development through loans and assistance 
programs. 
This research addresses the pressing need to understand the risks faced by SMEs, a topic that has 
received limited attention. Additionally, many SMEs lack dedicated financial departments, making it 
challenging to monitor risk indicators effectively and make informed decisions to mitigate risks. Our 
study aims to provide evidence-based insights to help SMEs internalize processes for balancing risk 
indicators and achieving better risk control. 
The study also recognizes the impact of globalization, financial volatility, and uncertainty on SMEs, 
emphasizing the importance of continuous improvement in various sectors of the economy. 
Furthermore, it highlights the role of consultants in diagnosing organizational issues and optimizing 
indicators, potentially leading to product/service diversification and enhanced profitability. 
Keywords: Small and Medium Enterprises (SMEs), Risk Management, Financial Indicators, 
Globalization, Value Creation. 
 
  
Introduction    
Around the world, small and medium enterprises make up most of the network business in numerical 
terms "in Colombia, about 94% of the enterprise system is made up of SMEs, which being the engine 
of the economy do not have the importance or enough support to survive over time "(Aguirre Ortiz, et 
al, 2006), although this image has begun to change, considering that during “the last governments some 
policies have been established in order to promote the development of these enterprises through loans 
and other kinds of aids, Because of the large percentage that these companies represent,  a concern 
arises for investigating and knowing the risks they are exposed to, with the intention to create tools that 
allow them to act timely, since there are few studies in this field, and nonexistent in the case we  
Similarly, the interest also arises because small and medium-sized enterprises often do not have (a 
priori hypothesis) with a financial department to conduct a full and proper monitoring of the various 

mailto:contact@americaserial.com
mailto:contact@americaserial.com


American Research Journal of Economics, Finance and Management 

Volume 10 Issue 1, January-March 2022 

ISSN: 2836-9416 

Impact Factor: 4.85 

Journal Homepage: https://americaserial.com/Journals/index.php/ARJEFM, 

Email: contact@americaserial.com 

Official Journal of America Serial Publication 
 

American Research Journal of Economics, Finance and Management 
https://americaserial.com/Journals/index.php/ARJEFM, Email: contact@americaserial.com 

27 | P a g e  

risk indicators and from this, take the relevant decisions and implement strategies conducive to 
mitigating the risks that are embedded as indicated by Miller (1994). This work aims to provide 
evidence to allow businesses to internalize the processes that serve to balance the results of the 
calculated indicators and have a controllable risk. According to St. Martin et Rodriguez (2011) the 
current crisis has highlighted the close relationship among three circumstantial aspects to the 
development of financial markets in recent decades: the globalization process, the volatility of financial 
figures and uncertainty. In this sense the subsectors of the economy in the geographical scope of this 
study should be prepared for a continuous improvement, so that it helps them to achieve national and 
international economic growth, according to the negotiations that are taking place in this context of 
globalization. However, it is important to note that companies also need consultants in other fields in 
order to make a diagnosis versus what is going wrong in the organization, which means their indicators 
could beat inadequate levels.   
This means that in many cases you might find that the company should diversify its products and 
services to supply a demand that is being ignored and this will generate greater profitability or value 
creation. The intention is making the financial area assist the company in the creation of value.    
SMEs often have some adaptive advantage to quickly change its production structure in case of 
changing market needs, which is often more difficult in a large company. Thus, TORO (2009 and 2012) 
mentions the following:  
 Small businesses have more difficulty finding funding in an appropriate cost and term, because 
of their increased risk and in order to solve this difficulty, they resort to financial institutions.  
 They are companies with greater labor rigidity and difficulty in finding skilled labor, so the 
employee prior training is essential for them.  
 Because of the small volume of profits presented by these companies, they cannot dedicate funds 
to research, however, in many cases they have innovative processes and products.  
 For their size, they have a small customer base.   
Other disadvantages of this type of organizations, according Beltran (2004), are as follows: 
 SMEs have great structural weakness for several main reasons:  
 They lack strategy and planning, which becomes a limiting factor for inclusion in an 
international context and jeopardizes their continuity in the domestic market.  
 The access to credit lines is difficult and therefore the investment in technology, working capital 
and knowledge is not possible  
 Administrative, financial, accounting and operational management is very informal and 
intuitive.  
Taking into account what was mentioned previously in SMEs and knowing their high degree of 
vulnerability facing the international market, they were considered as an object of study, in order to 
contribute to their permanence in time. To contrast the hypotheses, the sample of SMEs indicated 
above was taken with regard to observe what the behavior is of the financial risk of SMEs in the cityof 
Cali during the years 2012, 2013 and 2014.To this end, a number of primary and secondary objectives 
were established as: 
• Characterize the financial risk in companies in the city of Cali.  
• Debugging the financial statements of the companies under study.  

mailto:contact@americaserial.com
mailto:contact@americaserial.com


American Research Journal of Economics, Finance and Management 

Volume 10 Issue 1, January-March 2022 

ISSN: 2836-9416 

Impact Factor: 4.85 

Journal Homepage: https://americaserial.com/Journals/index.php/ARJEFM, 

Email: contact@americaserial.com 

Official Journal of America Serial Publication 
 

American Research Journal of Economics, Finance and Management 
https://americaserial.com/Journals/index.php/ARJEFM, Email: contact@americaserial.com 

28 | P a g e  

• Determine liquidity ratios, debt and portfolio recovery that are influencing the financial risk of 
a group of companies in Cali.  
• Establish the risk condition possessed by the companies under study.  
• Analyzing financial risk according to the productive sectors for companies under study.   
Similarly, before developing the work, research about studies that were related to the main objective 
was done. One might mention at this point the study by Ávila Bustos (2005), in the city of Bogotá, called 
Measurement and control of financial risks of companies in the real sector. The author believes that 
there are three types of financial risks in organizations known as market risks, credit risks and liquidity 
risks, and he develops for each asides on management, administration and measurement, being these 
risks classically described by authors such as Markowitz, Miller and Sharpe (1990), also retaken by 
Tudela and Young (2005) ie not articulated for an integral analysis, but for an individual perspective of 
them. An important aspect of this study is that it recognizes the need for risk measurement in 
organizations; moreover it deepens the research on management and administration of the same one; 
to the extent that is considered to be a complementary element to the development of the corporate 
purpose of the organizations. In this context, Zorrilla (2003) also conducted a study in the city of 
Veracruz (Mexico) on financial risk management of exportation SMEs in contributions to the economy, 
which aims to provide guidance and show the entrepreneurs the importance of using derivative 
financial instruments such as “forwards", "futures", options, “swaps", to achieve the reduction in 
market risks. This work focuses on these derivative financial instruments, for their ability to mitigate 
or reduce the risks faced by SMEs. Another study, is the one made by Navarro and Lopez (2009) from 
the University of Sevilla, this is a proposal for simplified model risk detection in companies: empirical 
study applied to the construction sector (SMEs). 
Its purpose is to identify the variables or more significant ratios of corporate solvency in construction 
companies by analyzing the annual accounts of a sample of societies, some of them without continuity 
problems in their activities (a sound and profitable enterprise) and others that are in situation of 
bankruptcy or receivership (failed or unsuccessful companies), with the ultimate aim of proposing a 
simplified method for detecting in advance possible risks situations.   
The author uses information about sound and profitable companies and failed companies, taking into 
account the economic and financial data of all companies for the preceding four years before the 
business failure. The statistical technique used to reduce the variables that finally are integrated into 
the system is them ultivariate analysis. According Ballesteros, the usefulness of the discriminant 
method is its ability to provide a comprehensive analysis model, comprising a combination of ratios 
correlated with each other, which summarizes the financial economic information in a more 
assimilative way to the user.   
Discriminant analysis also applies for predictive purposes. The main issue in the predictive application 
of discriminant analysis is to determine early enough business crisis situations. The idea is cataloging 
in advance a company as sound and profitable or failed depending on the values of its ratios in the 
precedent years of the crisis, by applying built discriminant functions. Hincapie (2007) in his study of 
financial risk analysis for micro, small and medium enterprises in the metallurgical sector of the city of 
Manizales makes a theoretical study with an analysis unit similar to the object of this work, albeit with 
a different methodological model. This study proposes the use of the Z2 index, which is an econometric 

mailto:contact@americaserial.com
mailto:contact@americaserial.com


American Research Journal of Economics, Finance and Management 

Volume 10 Issue 1, January-March 2022 

ISSN: 2836-9416 

Impact Factor: 4.85 

Journal Homepage: https://americaserial.com/Journals/index.php/ARJEFM, 

Email: contact@americaserial.com 

Official Journal of America Serial Publication 
 

American Research Journal of Economics, Finance and Management 
https://americaserial.com/Journals/index.php/ARJEFM, Email: contact@americaserial.com 

29 | P a g e  

model that is constructed from financial ratios. Such ratios are linearly combined with a specific weight 
to each, to obtain a final result score (Z-score) that discriminates companies that breach their 
commitments. The model was created by Altman (1968)for predicting bankruptcy. Altman´s model 
uses discriminant analysis as a multivariate statistical technique that is a sequential process in which 
the analyst excludes those financial reasons that are not statistically significant and include those that 
are considered meaningful. The author considered that the model above, required to have risk 
measurement, since the factors of independent variables will enter as numeric variables that will qualify 
each observation according to the company, the sector effect, me so economic environment and the 
overall environment.  
Consequently, the dependent variable of corporate performance to be used will be the calculation of 
Altman Z model, known as the probability of bankruptcy. Therefore, the concept of risk is articulated 
in this perspective, with those factors that at the moment of doing an internal or external evaluation 
can affect the company negatively. The positive impact transforms them into successful factors as 
Alvarez and Garcia said in 1996. Under these proposals, the performance of this work has been 
considered appropriate, since companies can generate agreements based on the results presented by 
them, agreements by which companies can design necessary tools, so they can anticipate unfavorable 
situations for the company that perhaps can seriously affect or compromise in a short or medium term 
the enterprise. Therefore, those signals are the ones that will allow the company to take appropriate 
decisions and act at the right time. The aim is to provide support criteria for decision-making, this being 
the cause that led to the search for new and better alternative solutions to organizational problems of 
SMEs, in order to respond to their needs. One element that brings the design of this tool within its 
methodology is the integral analysis of the financial indicators that will be calculated, as they always 
are analyzed and evaluated individually in some organizations.   
Finance and Financial Risk  
In 1973 after the first oil shock until today, scientific studies on Financial Management of the Company 
have expanded and deepened considerably. New lines of research emerged as the Option Pricing 
Theory, Arbitrage Pricing Theory and Agency Theory. In the eighties and nineties, the theoretical and 
methodological investigation of the aspects above was brilliant, as well as the diversity of empirical 
validations, with sophisticated valuation models and mathematical techniques and widespread use of 
information technology. In addition, it is deepened in research streams as the Agency Theory and 
methodology provided by the Theory of Fuzzy Sets applied to the Financial Subsystem in an atmosphere 
of uncertainty with significant results. Interest is bolstered by the internationalization of phenomena 
and financial decisions, leading to many studies on issues such as political risk and the risk of variability 
in the exchange rate of the currencies in which International Finance Management operates.  Also, to 
overcome some criticism of the CAPM the ECAPM has emerged "Porgue" in which initial work in an 
international context referred to pipeline companies, and expanded later by Litzenberg, Ramaswamy 
and Sosin (1980). Risk management, evidence on risk hedges. Hull (1980 - 2002); and later Diez de 
Castro & Mascareñas (1994), Izquierdo (2004). Regarding, financial structure, De Angelo and Masulis 
(1980) admit the existence of an optimal financial structure contemplating the effects of taxation, 
amortization and private investments of each company. Ross (1985) adopts a position in the same 
direction in risk conditions and perfect market. Regarding dividend policy, the work of Jalilvand and 

mailto:contact@americaserial.com
mailto:contact@americaserial.com


American Research Journal of Economics, Finance and Management 

Volume 10 Issue 1, January-March 2022 

ISSN: 2836-9416 

Impact Factor: 4.85 

Journal Homepage: https://americaserial.com/Journals/index.php/ARJEFM, 

Email: contact@americaserial.com 

Official Journal of America Serial Publication 
 

American Research Journal of Economics, Finance and Management 
https://americaserial.com/Journals/index.php/ARJEFM, Email: contact@americaserial.com 

30 | P a g e  

Harris (1984) is remarkable, they conclude that market imperfections may involve interdependencies 
among investment decisions, financing and dividends. On the fiscal impact on the dividend policy 
Poterba and Summers (1984) conclude a higher taxation of dividends versus capital gains.   
Moreover, Sarig and Scott (1985) are positioned in a similar line to Dim, Lewellen and McConnell, 
reaffirming the phenomenon of different segments or clienteles about the APT, new researches 
continue being added such as Roll and Ross (1980, 1984 ) using the multivariate analysis, this last one 
subjected to criticisms as Dhrymes, Friend and Gultekin (1984). It is also remarkable that during these 
years many studies among supporters of CAPM have been conducted, as Tinic and West (1984.1986), 
and on APT, Gultekin and Gultekin (1987, 1989) without reaching definitive conclusions about which 
of the two models is better, both in national and in the international version. Titman and Wesseles 
(1989) verify the APT and conduct empirical research on capital structure, in which they draw 
conclusions such as that transaction costs can be an important determinant in the choice of the capital 
structure, especially in small businesses by issuing long-term financial instruments. Leland (1994)5in 
the search of the optimal financial structure finds that the value of debt and optical indebtedness are 
explicitly connected with the risk of the company, taxes, bankruptcy costs, the free rate risk and pay-
out ratios. Fama and French in 1992 revealed important findings in this regard and concluded that in 
the American market for non-financial firms there is a weak positive relationship between the average 
and beta profitability. These same authors in 1995 try to detect whether the behavior of asset prices in 
relation to the previous ratio, reflects the behavior of the benefits.  
However, definitive and satisfactory conclusions were not drawn, making necessary other researches. 
Daniel and Titman(1997) reexamined the Fama and French model. They argue that the characteristics 
rather than the betas determine the expected benefits. Specifically, they found that stocks with low 
market-to-book ratios, but higher betas with respect to market-to-book portfolio factor, tend to have 
similar benefits to other low market-to-book stocks. Enrique Sentana has published over the years 
numerous works related to factor models of conditioned heteroskedasticity applicable to ATP and other 
models as (Pricing Options On Assets With Predictable White Noise Returns) or quadratic predictions 
and mean-variance analysis in models with conditioned heteroskedasticity and GARCH models. In 
recent years there have been numerous articles and research conducted about the great existence of 
SMEs and their role in today's society.  
One example is the work done by Lopez Revuelta and Sanchez (1998)6in which they pretend to show, 
in a synthetic and global manner, the specific problems that these family businesses can suffer. From 
this work, interesting conclusions were drawn such as that due to the family structure of the company; 
the maximizing criterion of the market value may not be the most suitable in some cases. In other works 
it has deepened in the study of human resource management in SMEs, funding, or direct investment in 
developing countries. The companies valuation theory seemed to be bogged down, at least since the 
seventies and only recently it has gained a significant boost under the influence of authors as Cornell 
(1993), Copeland, Koller and Murrin (1995) and Damodaran(1996). O Fernandez (1999) and Amat 
(1999) in Spain. In the nineties, the theory and practice of business valuation was centered on very 
classic and somewhat obsolete methods such as static approaches or balances and mixed models such 
as the German and Anglo - Saxon. 

mailto:contact@americaserial.com
mailto:contact@americaserial.com


American Research Journal of Economics, Finance and Management 

Volume 10 Issue 1, January-March 2022 

ISSN: 2836-9416 

Impact Factor: 4.85 

Journal Homepage: https://americaserial.com/Journals/index.php/ARJEFM, 

Email: contact@americaserial.com 

Official Journal of America Serial Publication 
 

American Research Journal of Economics, Finance and Management 
https://americaserial.com/Journals/index.php/ARJEFM, Email: contact@americaserial.com 

31 | P a g e  

These methods have been overcome nowadays, even admitting their virtuality and usefulness for small 
business valuation. Currently, the methodology based on discounted cash flows seems indisputable and 
is the most consistent and solid in terms of its theoretical foundations. By this line some authors have 
tried to advance such as Martín Marín and Trujillo Ponce (2000) in their book "Manual of business 
valuation." Regarding the issue of new economy or Internet-related virtual economy companies, these 
authors in their own words prefer waiting a period of time before tackling such a thorny issue. These 
companies seem to escape the logic of the so far developed valuation models. High volatility and soaring 
prices seem to prevail in the shares listed on the North American NASDAQ.  
Associated with the previous idea, it is important to take into account the increasing value acquired by 
the information and communication technologies within the company, factors that enable 
organizations to create value through the integrated management of the physical and virtual chain 
value. Something like what Ordiz and PérezBustamante (2000) believe when they say that "these 
technologies can bring benefits to the company, such as reductions in costs or increases in value, but 
for that, it should be assumed that investment in information and communication technologies is not 
a business decision, but acquires the category of strategic investment for the business, given the impact 
it may mean for the future of the business. 
LELAND, Hayne and GOLDSTEIN, Robert. An EBIT - Based Model of Dynamic Capital Structure. The 
Journal of Business. University of Chicago, 2001, Vol. 74, No. 4. 6 
SANCHEZ p., José and REVUELTA B., Daniel. Desafíos de las PYMES Familiares  (Challenges of Family 
SMEs). ISSN 02121867, No. 99, 1998. Pag. 159 - 173   
In recent years theories on Risk Management have been considered as an interactive process based on 
knowledge, assessment and management of risks and their possible impacts, whose fundamental 
purpose is to improve decision-making in organizations. Thus, on the basis of the studies on the cost of 
capital made by Modigliani and Miller (1958), then the valuation models and risk regulation by Lopez, 
J. (1996) and MARSHALL, C. SIEGEL, M. (1996), stochastic models of risk assessment developed by 
Berkowitz, J. (1999) are presented as a process applicable to any situation where a desired or 
unexpected outcome could be obtained, which at the same time could be significant or may bring an 
impact to the organization, Izquierdo (2005). Risk management ensures that financial resources have 
been properly assigned to the corresponding functions, favoring the maximization of the value of 
shareholders partners, including third parties. ("Financial Risk Management, 2006). Some benefits to 
the organization are related to achieving the goals and objectives; hence the decision-making turns out 
to be an important element to observe, within risk management in the company.   
Added Value of SMEs in Colombia  
Micro, small and medium Colombian enterprises (MSME), as in most countries, are the engine of the 
economy. They generate more than 50% of national employment, they represent 36% of industrial 
added value, 92% of commercial establishments and 40% of total production of the country, 
demonstrating its importance and great potential for growth (comparing its participation in the GDP 
and the number of establishments) but, unlike the fundamentals that have been a relevant actor in the 
remarkable growth of the countries of South East Asia and Europe like Italy and Spain due to their 
outstanding participation in foreign trade, the contribution of SMEs to the country 's trade balance has 
been very poor. While exports (US $ 12,547 million) of SMEs in Taiwan correspond to 56% of total 

mailto:contact@americaserial.com
mailto:contact@americaserial.com


American Research Journal of Economics, Finance and Management 

Volume 10 Issue 1, January-March 2022 

ISSN: 2836-9416 

Impact Factor: 4.85 

Journal Homepage: https://americaserial.com/Journals/index.php/ARJEFM, 

Email: contact@americaserial.com 

Official Journal of America Serial Publication 
 

American Research Journal of Economics, Finance and Management 
https://americaserial.com/Journals/index.php/ARJEFM, Email: contact@americaserial.com 

32 | P a g e  

exports of the island, in Korea we talk of (US $ 18,241 million) 40% and Italy (US $ 110,552 million) 
53% , the Colombian SMEs correspond to no more than 20% of total exports from Colombia. With the 
aim of doubling and diversifying exports of non - traditional products, the Government developed the 
Strategic Export Plan, which included the Expopyme program, designed and coordinated by Proexport 
Colombia, aimed at promoting the successful and permanent position in exports of SMEs and their 
adaptation to the demands of the global economy.  
At the end of 2001 Proexport had invested more than $ 6000 million in its development and 1650 
MSMEs had participated, of which more than 600 made exports of US $ 110,700,029 in that year. 
However, Colombia continues representing only 0.2% of total world merchandise exports, with a per 
capita export income of US $ 270 in 2000 compared to the world average of US $ 600 in that year. As 
for SMEs, in 2000, exports as a percentage of gross sales (measured in pesos) only reached 14%, being 
the packaging and cardboard boxes sector with 37.6% the highest export coefficient and the furniture 
sector with 10.5% the lowest coefficient, which shows that our SMEs have been born and raised 
considering basically the local market and demonstrating that only when domestic demand has shrunk 
have they looked for the world market. In view of the above, one of the greatest difficulties faced by the 
Colombian PYME's is their low administrative capacity to be linked to the external sector, the lack of 
information on opportunities for competitive and sustainable exports, with high levels of local added 
value  
As a result of a minimal training and management in the international arena and their limited access 
to technologies, especially those related to foreign trade, because as shown by the recent work 
developed at the University of the Andes about this topic.  The biggest obstacles to the export process 
of domestic SMEs are referred to factors related to marketing such as the suitability of the product to 
the requirements of the external market, lack of markets information (knowledge), access to adequate 
distribution channels and lack of training in international marketing.   
Without overcoming these shortcomings, it will be difficult for Colombian SMEs to take advantage of 
the great opportunities offered by the global market, particularly those occurring as a result of the 
integration agreements and preference systems such as CAN, ALIDE, ATPA and SGPA, signed and 
granted to Colombia. In this regard, it is important to highlight the recent approval given by the US 
Congress to ATPA, which opens great possibilities to expand the participation of Colombian SMEs in 
the market of manufactures of that country (a trillion dollars were their purchases to countries around 
the world in 2001) given that, with the expansion of the number of products benefiting from the relief, 
it is estimated that 75% of the national export supply may enter without paying tariffs, opening up new 
sources of employment and generation currency, becoming a crucial support in the process of reviving 
local production and the recovery of the US market.  
Also, it should be noted that the FTAA (Free Trade Area of the Americas) from 2005 will change the 
fate of their member countries and in particular of the SMEs, which should face the expanded market 
(800 million people) by using international strategies and new and multiple competitors and therefore 
the MSME's entrepreneurs must be prepared to be competitive with those of other countries. It is 
necessary therefore to provide them with high quality support in these areas if we want to consolidate 
this business sector as an emerging possibility for Colombia to take risks outside its borders. Because 
of all this, a government program that helps them to solve in part these weaknesses, giving them the 

mailto:contact@americaserial.com
mailto:contact@americaserial.com


American Research Journal of Economics, Finance and Management 

Volume 10 Issue 1, January-March 2022 

ISSN: 2836-9416 

Impact Factor: 4.85 

Journal Homepage: https://americaserial.com/Journals/index.php/ARJEFM, 

Email: contact@americaserial.com 

Official Journal of America Serial Publication 
 

American Research Journal of Economics, Finance and Management 
https://americaserial.com/Journals/index.php/ARJEFM, Email: contact@americaserial.com 

33 | P a g e  

required management tools and business knowledge to start and successfully develop an optimal 
process of internationalization of its products and services, supporting them in their use, becomes of 
paramount importance when there is a marked decrease in domestic demand and weakness in our 
major trading partners (the United States and Venezuela).     
Methodology   
The emphasis of a case study is to describe or measure two or more features or units of analysis in order 
to determine how it is or how the phenomenon occurs. In this sense this study is aimed to observe and 
characterize a reality of some companies of Cali, where the financial statements of some companies 
were analyzed during 2012, 2013 and 2014, to then proceed to perform calculations and analysis of 
financial liquidity indicators, debt and portfolio turnover and description of their behavior in risk for 
each one. Initially liquidity ratios, debt and portfolio management will be calculated, based on the 
historical series of financial statements selected from the database of the Super Intendencia de 
Sociedades de Colombia (Colombian superintendence of corporations). In order to obtain the liquidity 
the index ratio or current ratio calculation was used. This tries to verify the availability of the company, 
in the short term to meet its commitments, also in a long term. The formula is  
Current Ratio = Current Asset / Current liabilities  
For the indebtedness, the rate or level of Indebtedness was used: This indicator provides the percentage 
of participation of creditors in the company. The formula is:    
Indebtedness level = Total Liabilities to Third Parties / Total Assets    
In the case of the portfolio turnover, the portfolio turnover rate was used which shows how many times 
the accounts receivable or portfolio are converted into cash or are recovered during this period, this 
period may be month or year:   

  
Among the risks described by the literature that may affect companies, there is the operational or 
business risk treated as the derivative of decisions that are taken daily within the company, either in 
relation to production, distribution, prices, etc. On the other hand JORION (2001) defines financial 
risk as the risk of not being able to cover the financial costs of a company. Among the main financial 
risks described in the literature there are: market risk, credit risk, liquidity risk, operational risk, legal 
risk and transaction risk, but as we can see the theory shows and describes how they are calculated and 
analyzed independently, which is why this study aims to show a model for risk assessment of companies 
that have no market prices (unlisted) more holistically, based on operational risks (management or 
recovery portfolio) and financial risks (liquidity risk and debt or credit risk), which affect in a short- 
and medium-level the operation of enterprises and even more so in countries with emerging economies.    
This work was based on the database of the Superintendence of Corporations of Colombia, excluding 
those that are in liquidation process where companies were classified by sub-sectors, which according 
to the studied companies were: Construction of Residential Construction, construction of Civil Works, 
Adequacy of construction Works, Trade of Vehicles and Related Activities, Trade of fuels, lubricants 
and Wholesale. Subsequently, with the results of the companies under study, every financial indicator 
was calculated, in addition descriptive statistics was applied in order to obtain simplified information 

mailto:contact@americaserial.com
mailto:contact@americaserial.com


American Research Journal of Economics, Finance and Management 

Volume 10 Issue 1, January-March 2022 

ISSN: 2836-9416 

Impact Factor: 4.85 

Journal Homepage: https://americaserial.com/Journals/index.php/ARJEFM, 

Email: contact@americaserial.com 

Official Journal of America Serial Publication 
 

American Research Journal of Economics, Finance and Management 
https://americaserial.com/Journals/index.php/ARJEFM, Email: contact@americaserial.com 

34 | P a g e  

to be analyzed and interpreted in a more comfortable and quick way. This information was obtained 
with the intention of being used effectively for the purpose of this work. Specifically, measures of central 
tendency were used, which served as landmarks to interpret and corroborate the results obtained 
through indicators. After calculating each index (liquidity, debt and portfolio turnover), this result will 
be converted in terms of risk as a dichotomous variable as follows:    
1 - if the financial index has risk   
0 - if the financial index has no risk   
A "dummy" or dichotomous variable is a numeric variable used in the linear regression analysis to 
represent subsets of the sample in study. In the research design, a "dummy" variable is often used to 
distinguish different groups of variables. In the simplest case, with values0 and 1.The "dummy" 
variables are useful because they allow the use of a single regression equation to represent multiple 
groups. Finally, after having the results of each indicator, a conditional probability formula was applied 
to determine whether the company owned any risk, according to the three indicators calculated. The 
formula consisted in whether the sum of the three indicators was less or higher than 2, then the 
company had risk, as the analysis described above was aimed at only determining the risk indicator. 
This means, the analysis in this part of the work was done holistically. Once this data is obtained, a risk 
table is generated in order to determine individually per industry and sector its financial risk through 
the following criteria:  
- The company that owns 2 or 3 of the indicators at Risk condition (1) shall possess financial risk.  
- The company that owns 2 or 3 of the No risk indicators (0), has no financial risk.   
Once the financial risk for businesses is calculated the next procedure is to make a descriptive analysis 
of risk behavior by company type (small or medium), by productive sectors as conglomerates done 
through cluster analysis. This model will be applied to each company and with these results a 
classification table is constructed including levels, and risk scale intervals, being the amount of 
variables odd number (3). After debugging the financial statements of the series 2012, 2013 and 2014 
supplied by the Colombian Superintendence of Corporations, calculating the dichotomous variables of 
"risk" and "No Risk" for each indicator (liquidity, debt and portfolio management) as well as 
determining the risk by enterprise and sector, it was proceeded to run the logit model using the SPSS 
software. In order to do the above mentioned process, figures were taken as a basis calculation of 
average data previously performed on the pilot test in 50 and the references were established as follows: 
The analysis of the Logistic Regression Results, whose statistical technique aims to express the 
probability of an event as a function of certain variables, is considered potentially influential. The 
logistic regression, like other multivariate statistical techniques, gives the possibility to evaluate the 
influence of each of the independent variables on the response variable and control the effect of the 
rest.  The analytical way in which the probability object of interest is linked to the explanatory variables 
is as follows.   

  
This expression is known as logistic function; where "e" denotes the exponential function and b0, b1, 
b2... bkare the parameters of the model.   

mailto:contact@americaserial.com
mailto:contact@americaserial.com


American Research Journal of Economics, Finance and Management 

Volume 10 Issue 1, January-March 2022 

ISSN: 2836-9416 

Impact Factor: 4.85 

Journal Homepage: https://americaserial.com/Journals/index.php/ARJEFM, 

Email: contact@americaserial.com 

Official Journal of America Serial Publication 
 

American Research Journal of Economics, Finance and Management 
https://americaserial.com/Journals/index.php/ARJEFM, Email: contact@americaserial.com 

35 | P a g e  

If the exponential function produces values greater than 0 for any arguments, p will take only values 
between 0 and 1. If the betas are positive (greater than 0) then the function is increasing and decreasing 
in the opposite case. A positive coefficient indicates that p increases as the variable grows. For the 
interpretation of the beta coefficients, it is necessary to refer to the concept of relative risk. The relative 
risk of an event is defined as the ratio of the probability that this event occurs (p) and the probability of 
not occurring (1-p). The exponential of bi is known as the relative risk, which means, it is a measure of 
the influence of variable x ion the risk that the event occurs and assuming that all the other variables of 
the model remain constant. A confidence interval for the exponential b containing 1 indicates that the 
variable has no significant influence on the occurrence of the event and, conversely, values further from 
this indicate a greater influence of the variable.   
Once the values of the parameters or coefficients b are estimated, we can determine the probability of 
the event for different values of Xi. To run the model data for the third series, the results of some indices 
were softened, in the same way it was done for the previous series.   
In the debt ratio, indices or outliers much higher than the maximum debt ratios (100%) were replaced, 
given that in real life a company that surpasses its capital adequacy comes to be operated by entities of 
the state or shall enter into liquidation laws or concordat. For portfolio management index, all high 
outliers or extreme values were taken and replaced by 360 days, being these, the maximum rotation 
days, because all periods higher that this are understood as delinquent accounts and are punished as 
lost in the Income Statement for the following period. The model was run for the time series in 2012, 
2013 and 2014, trying to strengthen the model, the analysis and besides to see the consistency of the 
same. Next, the result of the logistic regression is shown. The dependent variable (risk), which is 
dichotomous (0 when there is no risk and 1 when there is a risk) and one or more independent variables, 
for our case (liquidity, debt and portfolio). In analyzing the results for the risk variable, it can be seen 
that all coefficients are positive indicating a direct relationship with risk, except for liquidity which 
shows an inverse relationship with a negative coefficient. As shown in the table, all the coefficients are 
statistically significant at 0.05 except by indebtedness which is significant at 0.1. The previous table 
also contains five ways to evaluate the benefits of the  
2 2 model optimization: Omnibus Test -2 log likelihood, R  of Cox and Snell, R  of Nagelkerke. 
Omnibus model coefficients or Chi-square test is highly significant, reflecting good model fit to the 
data, additionally; a high percentage of correctly classified observations (80.6%) is noticed.  
Results and Sector Analysis    
The analysis of detailed results of financial variables liquidity, debt and portfolio recovery was 
conducted to determine the financial risk between 2012 until 2014 in the city of Cali in order to make 
decisions that favor business development and business support.   
Financial Risk Analysis in Companies Of The City Of Cali - Year 2012   
The analysis was conducted in 924 companies in Cali during 2012. The companies were registered and 
they correspond to several business subsectors. 11 companies related to computer activities, 6 to 
tourism activities, 97 companies related to various investment activities and financial services, 87 
related to estate activities, 21 to livestock activities and hunting companies, 22  companies related to 
construction sector, 41 to agricultural companies especially exporter, 4 companies to storage and other 
activities related to transport sector, 8 housing companies, 1 coal derivatives, 135 wholesale companies, 

mailto:contact@americaserial.com
mailto:contact@americaserial.com


American Research Journal of Economics, Finance and Management 

Volume 10 Issue 1, January-March 2022 

ISSN: 2836-9416 

Impact Factor: 4.85 

Journal Homepage: https://americaserial.com/Journals/index.php/ARJEFM, 

Email: contact@americaserial.com 

Official Journal of America Serial Publication 
 

American Research Journal of Economics, Finance and Management 
https://americaserial.com/Journals/index.php/ARJEFM, Email: contact@americaserial.com 

36 | P a g e  

94 retail companies, 15 fuels and lubricants trading companies, 49 vehicle trading companies and 
related activities, 51 construction of civil works, 20 companies of construction of residential activities, 
2 mailing companies, 1 company of oil derivatives and gas, 15 publishing and printing companies 
without regular publications, 6 educational institutions, 9 distribution of food and beverage companies, 
8 manufacture of machinery and equipment companies, 6 companies of manufacture of other textile 
materials, 4 companies of papermaking, cardboard and derivatives, 20  clothing manufacture, 
manufacturing of cement, concrete, plaster and lime, 2 manufacturing companies of fabrics and related 
activities,1 production company of motor vehicles and parts, 9 metalworking derivative industries, 1 
company of basic metal, 6 manufacture of footwear companies and related products, 22 companies of 
community and social services, 73 companies with other business activities, 6 other manufacture 
industries, 5 companies of agricultural sectors, 5 companies of other systems passenger, 1 company for 
fishing, fish farming and related activities,18 companies of food products, 1 company of rubber 
products, 14 companies of plastic products, 8 companies of chemicals, 1 company of periodicals, 2 
companies of radio and television, 2 companies of social services and health, 10 companies of 
telephoning and networks, and 3 land freight transportation companies.    
The analysis show that subsectors of wholesale marketing and retailing, entertaining activities and real 
estate services join most of the companies and the ones which the economic and social development of 
the city move around. 

 
                               Source: Self made  
The graph shows the status of companies in Cali in 2012 about the risk of indebtedness, liquidity and 
portfolio. And the next graph refers the risk of indebtedness.   
 
 
 
 
 
 
 
 

mailto:contact@americaserial.com
mailto:contact@americaserial.com


American Research Journal of Economics, Finance and Management 

Volume 10 Issue 1, January-March 2022 

ISSN: 2836-9416 

Impact Factor: 4.85 

Journal Homepage: https://americaserial.com/Journals/index.php/ARJEFM, 

Email: contact@americaserial.com 

Official Journal of America Serial Publication 
 

American Research Journal of Economics, Finance and Management 
https://americaserial.com/Journals/index.php/ARJEFM, Email: contact@americaserial.com 

37 | P a g e  

Graph 2 

                                            Source: Self-
authorship  
 It is observed that 17% of the companies under study are at risk of indebtedness. From an accounting 
point of view, the graph shows a good percentage of debt capacity when comparing financial structure 
and financial capacity; therefore these companies do not need to be financed with suppliers, labor and 
/ or financial institutions to operate. For this financial year, Cali showed good financial paramount and 
this is shown in analyzing how companies did not have to fall into debt to make their proposed 
activities.  
Graph 3  

                                           Source: Self-
authorship   
Regarding liquidity risk, most of the companies, 80% had no such risk due to the type of companies 
and sectors that mostly composed the population under study.   

mailto:contact@americaserial.com
mailto:contact@americaserial.com


Toro, Arango & Serna                                                                                                                                              38  

  

  

American Research Journal of Economics, Finance and Management 
https://americaserial.com/Journals/index.php/ARJEFM, Email: contact@americaserial.com 

38 | P a g e  

The marketing wholesale and retail companies, entertainment activities and real estate services are the 
subsectors that gather most companies in Cali in 2012. These subsectors represent more companies 
and require minimal funding for suppliers due to the lack of liquidity risk, without bearing in mind that 
the other companies joined in other subsectors. They were not so representative and were not taken 
into account to draw the percentages that were represented in the previous graph.  
Graph 4  

                                Source: 
Self-authorship           
The analysis showed lower risk of portfolio, as the graph shows the indicators percentages 
corresponding to 26% portfolio risk and 74% no portfolio risk. It reveals that credit sales are lower, and 
it is inferred that the companies were having good turnover in cash sales and profits since it cannot 
have invested too much time or working capital in loan recovery. Regarding the portfolio there is always 
risk and uncertainty, however the resources can be used in the best way as it happens within most of 
the companies under study, and more specifically to portfolio risk in this case with a minimum 
percentage.    
Graph 5 

                                   Source: 
Self-authorship   
The analysis on the previous graphs showed that from 924 companies analyzed in 2012 in Cali, 79% did 
not have financial risk and this situation makes them feasible to obtain credits.  It was concluded that 
in that year, the companies had a good financial viability, since as discussed above it showed how 
companies that used risk analysis had lower percentages 60% in comparison to debt risk, liquidity and 
portfolio. Multiple factors are involved in the activity of a company, the financial risk management is 
paramount in order to be prepared for disaster situations and this is achieved through financial risk 

mailto:contact@americaserial.com


Toro, Arango & Serna                                                                                                                                              39  

  

  

American Research Journal of Economics, Finance and Management 
https://americaserial.com/Journals/index.php/ARJEFM, Email: contact@americaserial.com 

39 | P a g e  

management preventing possible events that may affect the normal running of the company. However, 
the companies studied in the city showed positive results, only 21% of them had chance of financial risk. 
Financial Risk Analysis in Companies in Cali in 2013 
The study reveals which sectors were most active that year and the ones that contribute the most 
according to the participation within the economy of this city. The table shows that WHOLESALE 
TRADE has the highest participation, 127 of companies were dedicated to this activity and it represents 
14.16% of the companies.  In addition, DIVERSE INVESTMENT ACTIVITIES, PROPERTY BUSINESS 
AND RETAIL TRADE SECTORS have an average of 92 to 96 companies each that represent between 
10.2% and 10.7% of all companies. 179 companies of the city represent between 1% and 2% and the sum 
of their percentages constitutes the minority with  
19.96%. Other economic sectors are agriculture with export PREDOMINANCE, 49 companies that 
represent 5.46%, TRADE IN VEHICLES AND RELATED ACTIVITIES with 45 companies, 5.02%; 
CONSTRUCTION OF CIVIL WORKS 48 companies that correspond to 5,35% and finally OTHER 
BUSINESS ACTIVITIES, 64 companies that represent 7,13%. This information is shown in the 
following table.   
Table 1  
  

COMPANIES  TOTAL  
DIVERSE  ACTIVITIES  INVESTMENT  AND 
 FINANCIAL  

PERCENTAGE  

SERVICES   92  10.26%  
REAL ESTATE ACTIVITIES  96  10.70%  
LIVESTOCK AND HUNTING ACTIVITIES 
COMPANIES  

18  2.01%  

ADAPTATION OF CONSTRUCTION WORKS  16  1,78%  
AGRICULTURAL EXPORT DOMINANCE WITH  49  5.46%  
WHOLESALE TRADE  127  14.16%  
RETAIL TRADE  92  10.26%  
FUELS AND LUBRICANTS TRADE  12  1.34%  
VEHICLES TRADE AND RELATED ACTIVITIES  45  5.02%  
CONSTRUCTION OF CIVIL WORKS  48  5,35%  
RESIDENTIAL CONSTRUCTION WORKS     23  2.56%  
OTHER COMMUNITY, SOCIAL AND PERSONAL  18  2.01%  
OTHER ACTIVITIES WITH LESS THAN 1% OF 
INVOLVEMENT  

179  19.96%  

OTHER BUSINESS ACTIVITIES  64  7.13%  
             Source: Self-authorship 
 
 
 
 
 
 
 
 
 

mailto:contact@americaserial.com


Toro, Arango & Serna                                                                                                                                              40  

  

  

American Research Journal of Economics, Finance and Management 
https://americaserial.com/Journals/index.php/ARJEFM, Email: contact@americaserial.com 

40 | P a g e  

Graph No 6 

                         Source: 
Self-authorship   
Regarding the liquidity risk, after comparing the current assets over current liabilities to get the current 
ratio, it was observed that 897 companies in Cali, 80 % showed high liquidity risk and only 183, 20% 
did not show this risk. This result probably corresponds to the type of companies under study, since 
most companies belong to the service sector, such as trading and construction because they are 
leveraged by their suppliers.   
Liquidity risk. When the index is less than 1.1 When the result is> 1 there is liquidity, and when the 
index is <1 there is no liquidity.  
Graph 7  

                                     Source: Self-
authorship  
Traditionally, it has been used to assess the ability of future indebtedness of the company and shows 
the proportion of assets belonging to creditors: Indebtedness level: This indicator provides the 
percentage of participation of creditors in the company. The risk of debt of 464 of the companies under 
study that correspond to 52% did not show risk but 48% that correspond to 433 of the companies 
showed indebtedness risk.  Although there were a higher percentage of companies without 
indebtedness risk, the indicators show that this issue should be monitored in order to be aware of the 
sector debt and help to keep the balance within their financial structures while still use the leverage 
provided by external entities (suppliers, labor or financial institutions) that provide important 
resources.   
Indebtedness risk: When the index is higher than 50%. If the debt is more than 50% there is a risk 
or if it is less than 50% there is no risk.    
 
 
 

mailto:contact@americaserial.com


Toro, Arango & Serna                                                                                                                                              41  

  

  

American Research Journal of Economics, Finance and Management 
https://americaserial.com/Journals/index.php/ARJEFM, Email: contact@americaserial.com 

41 | P a g e  

Graph 8 

                                       Source: Self-
authorship  
The graph shows the times receivable accounts or portfolio are converted into cash during the period:  
The number of days that is determined by dividing 360 days (accounting period) into this turnover. 
The turnover is determined by the collection policies of the company but it is also influenced by the 
economic situation of the region of the company and contract of clients or the political credit of the 
company. The results of portfolio risk reveal that in this city, the credit sales are very common and the 
76% that corresponds to 678 companies are at risk and only 24% in other words, 219 companies are 
not. This indicator reflects the slow portfolio recovery in the city due to the credit sale is very common 
especially in trading companies. Action must be taken in the management and loan recovery in order 
to improve cash flow and provide solutions to portfolio recovery that may be above 60 days (Difficult 
Portfolio recovery). This situation allows companies to improve cash flow, reduce inventory, rotate 
goods and balance finance.   
Risk in portfolio management. If the result of the index is higher than 60 days there is risk and if 
the result of the index is lower than 60 days there is no risk.  
Graph 9   

                                             Source: Self-
authorship   
Based on the three indicators the financial risk was evaluated in 897 companies registered, 58% (524) 
showed financial risk while 42%, (323) companies did not show financial risk. There is a close 
relationship between liquidity ratios and portfolio turnover, both are present at high risk in most 
companies, the receivable account as a current asset, makes part of the analysis of two indicators 
mentioned, since it reduces the cash incomes. Studies should be conducted to create strategies for 
companies that allow implementing corrective action plans designed according to their needs in order 
to achieve their sustainability over time and generate higher revenues.In addition, it is necessary to 
focus efforts on the recovery of portfolio in order to obtain higher liquidity and although the risk of 
indebtedness is not so high, working on these two indicators, most certainly cover the payment of 

mailto:contact@americaserial.com


Toro, Arango & Serna                                                                                                                                              42  

  

  

American Research Journal of Economics, Finance and Management 
https://americaserial.com/Journals/index.php/ARJEFM, Email: contact@americaserial.com 

42 | P a g e  

obligations and thus it may initially realize a balance and subsequently get higher profits and a 
sustainable economy for the city.  
Financial Risk Analysis in Companies of the City of Cali 2014    
Table 2 Sectors 

MAIN SECTORS   
  SECTORS    
A  WHOLESALE AND RETAIL TRADE  388  
B  AGRICULTURE, LIVESTOCK, FORESTRY AND FISHING  216  
C  FINANCIAL AND INSURANCE ACTIVITIES  198  
D  MANUFACTURING INDUSTRIES  181  
E  PROPERTY ACTIVITIES  163  

          Source: Self-authorship 

 
                                          Source: Self-authorship 
It is important to note that from 1586 companies surveyed most  of them are concentrated into 
wholesale and retail trade, repair of motor vehicles and motorcycles,388 companies; agriculture, 
livestock, forestry and fishing 216 companies; financial and insurance activities 198; and to a lesser 
extent manufacturing companies and real estate activities, indicating that this experimental model 
prototype applies to all productive sectors of the economy in general and it helps to clearly determine 
if there is financial risk in the company to take decisions that favor economic and financial development 
of the company. Studies in Colombia determine approximately between 90% and 95% of companies in 
the country are classified as SMEs. There variables, debt, liquidity and recovery of receivables were 
deeply analyzed based on the analysis of the context and a database of such companies in Valle del 
Cauca.  An experimental model was used to assess financial risk and be able to deliver a clearer financial 
picture. The aforementioned risk indicators were studied to determine the sector of the country, the 
behavior of each of these variables and to clear arguments to make decisions.  A company should have 
as priority and necessity to measure the risk in order to be more competitive and effective in the 
globalized world. A concrete  judgment of the variables for supporting decisionmaking of the analyzed 
variables a particular view of the aforementioned variables and studied a sample of SMEs in the 
department of Valle del Cauca.  
 
 
 
 
 

Grafica No 10   
  

  

mailto:contact@americaserial.com


Toro, Arango & Serna                                                                                                                                              43  

  

  

American Research Journal of Economics, Finance and Management 
https://americaserial.com/Journals/index.php/ARJEFM, Email: contact@americaserial.com 

43 | P a g e  

Grafica No 11   

                                               
Source: Self-authorship  
After analyzing the financial risk as a dichotomous variable, 1,135 companies are at risk of debt, it 
corresponds to 71.6 over 100%. On the other hand, 451 companies of this same overall trend do not 
show risk of debt, in other words 28.4% of all companies. Most of the companies have a tendency 
towards indebtedness. It demonstrates that companies in Colombia and especially of Valle del Cauca 
perform practices that eventually become operational risk to stability. Average indebtedness in 
companies in this sector represents three-quarters. This situation often limited operational and 
functional capacity. In addition, the companies that have no debt risk manage their financial and 
operational capacity better. It is not promising that 28% of the companies correspond to this group. In 
the study of liquidity and financial risk, 61% of companies are under liquidity risk it corresponds to 961 
of the companies meanwhile, 39% of the companies that correspond to 625 of the companies did not 
show risk of liquidity.  
Graph 12  

                                                  
 Source: Self-authorship  
This liquidity indicator result showed that 61% of companies are at risk. A further assessment revealed 
that the total numbers of companies have delayed recovering their portfolio; it is often up to 60 days. 
This situation directly affects liquidity and cash flow that businesses can have.   
However, only 39% of companies did not reveal liquidity risk, the portfolio recovery is much faster or 
they possibly have few accounts receivable. It means, they have higher liquidity, higher cash flow, and 
greater financial autonomy. Perhaps the most disturbing trend variable in the risk, 1,235 companies 
are at risk of receivables out of 1,586, this correspond to 78% of all companies under study. On the other 
hand, only 22% of the companies have no risk in the portfolio recovery, it corresponds to 351 companies 
on a sample of 1,586 companies.    
 
 
 

mailto:contact@americaserial.com


Toro, Arango & Serna                                                                                                                                              44  

  

  

American Research Journal of Economics, Finance and Management 
https://americaserial.com/Journals/index.php/ARJEFM, Email: contact@americaserial.com 

44 | P a g e  

Graph 13  

                                              
 Source: Self-authorship  
This phenomenon showed a trend of the risk of recovery of receivables as totally daunting for the 
businesses field. This trend can basically have two explanations: Firstly, the needs of businesses have a 
committed department when there is no one person or department in charge of accounts receivable 
payments times dilate and portfolio recovery takes longer each time. The second cause of delay recovery 
or receivables portfolio responds to the inability of debtors to repay their debts and in many cases not 
only inability but the repeated failure.   
Financial risk   
A final assessment of financial risk demonstrated that 1,182 out of 1,586 companies under study are at 
risk in these types of variables. On the other hand, 404 companies have no financial risk meaning only 
25% of the companies.   
Grafica No 14 

                                                
Source: Self-authorship  
Finally, 75% of companies surveyed in Valle del Cauca perform practices that favor financial risk, 1,182 
companies do not perform good practices in their variables debt, liquidity and recovery of portfolio. It 
was shown that on average three-quarters of companies have financial risk and are under the 
experimental model. It is essential that companies have a clear picture of their financial risk to make 
assertions and timely decisions, therefore, reverse bad decisions previously taken and correct timely 
errors. In the latter part of the investigation a comprehensive analysis of the three variables above was 
performed, it was determined that companies with two of these three variables prone to risk will be 
classified as company in financial risk. The companies should make analysis studies, implementation 
action plans and continuous improvement to be sustained within the market and hence to be 
competitive.    
References   

ALTMAN, Edward (2002). The Z-score formula for predicting bankruptcy was published in 1968 by 
Edward I. Altman, who was, at the time, an Assistant Professor of Finance at New York 
University Bankruptcy, Credit Risk and High Yield ‘Junk’ Bonds: A Compendium of Writings. 
Oxford, England and Malden, Massachusetts: Blackwell Publishing.  

mailto:contact@americaserial.com


Toro, Arango & Serna                                                                                                                                              45  

  

  

American Research Journal of Economics, Finance and Management 
https://americaserial.com/Journals/index.php/ARJEFM, Email: contact@americaserial.com 

45 | P a g e  

ÁVILA Bustos, Juan Carlos Ávila (2005). Medición y control de riesgos financieros en empresas del 
sector real. Bogotá.  

BALLESTEROS Navarro, Juan Andrés y LOPEZ, Herrera Diego (2009). Propuesta de un modelo 
simplificado de detección del riesgo empresarial: estudio empírico aplicado al sector de la 
construcción (Pymes). Revista Iberoamericana de Contabilidad  y Gestión. Pág. 1-27. España.  

HINCAPIÉ Piñeres, Javier Eduardo (2007). Análisis de riesgo financiero para la micro, pequeña y 
mediana empresa del sector metalmecánico. Manizales.  

JORION, Phillipe (2001). Valor En Riesgo. Ed. Mc Graw Hill,  2ª ed.  

Miller, Merton H.(1994) Financial innovations and market volatility. Journal of Applied Economics, 
Nueva York,Número 4 (vol.1 1), p6gs. 205 a 210  

San-Martín-Albizuri, N. & Rodríguez-Castellanos, A. (2011). La imprevisibilidad de las crisis: un 
análisis empírico sobre los índices de riesgo país. Innovar, 21(39), 161-178.  

TORO D., Jairo (2012). "Las decisiones financieras en las gerencias de las PYMES. Estudio de caso - 
San Juan Pasto -  

Colombia ", Revista digital OBSERVATORIO DE LA ECONOMIA LATINOAMERICANA, Nº 163, 
indexada en IDEAS-RePEc,  recuperado de http://www.eumed.net/cursecon/ecolat/co/  

TORO D., Jairo (2009). FINANCIAL DECISIONS OF MANAGERS OF PYMES IN MANIZALES. 
JOURNAL INTERNATIONAL OF BUSISNESS AND FINANCE, Vol. 4 (No. 2),  p. 804-809. 
Recuperado de http://www.theibfr.com/ARCHIVE/ISSN-1941-9589-V4-N2-2009.pdf  

Tudela& G. Young (2005). "A Merton-Model Approach To Assessing The Default Risk Of Uk Public 
Companies, "International Journal of Theoretical and Applied Finance (IJTAF), World Scientific 
Publishing Co. Pte. Ltd., vol. 8(06), pp 737-761.  

WOLF, Martin. Why Globalization Works, Yale University Press, ISBN  0 – 300 – 10252 - 6.  

ZORRILLA Salgado, Juan Pablo (2003). La administración de riesgos financieros en las Pymes de 
exportación en contribuciones a la economía. Veracruz 

mailto:contact@americaserial.com

