Impact of changes in international financial reporting standards on company financial ratios

The objective of this study is to assess the impact of the changes of IFRS on the financial ratios of Lithuanian companies. This study analyses the impact of the introduction of IFRS 16, which is expected to be significant for the assets and liabilities of those entities that use operating leases. The results show that the adoption of IFRS 16 'Leases' increased the liabilities of Lithuanian companies relatively more than their assets. There was a significant increase in debt and long-term debt ratios, leverage and a decrease in the equity ratio and gross liquidity ratio. These changes in these ratios are more indicative of the financial position of companies, as increased leverage ratios are indicative of increased corporate risk. The changes in IFRS 16 led to the largest changes in the financial ratios of Lithuanian companies in the retail and telecommunications sectors.