Examining financial ratios for non-financial firms to survive currency devaluation

This research investigated the efficiency indicators of 160 non-financial firms listed on the Egyptian stock exchange between 2012 and 2021, a period marked by notable price escalations and currency depreciation. Amid the challenges introduced by the floating exchange rate system, particularly high inflation rates, the research endeavoured to discern valuable insights into a firm's financial standing through an analysis of financial ratios. Utilising dynamic panel data estimation methods, the study scrutinised the relationship between seven determinant variables and efficiency. Various analytical techniques, including OLS, fixed effects, random effects, and generalised method of moments (GMM), were employed in the data analysis phase. Results highlighted that with the exception of volatility, all variables had a considerably positive impact on efficiency. This research holds significance as it offers potential strategies to mitigate the economic challenges Egypt has grappled with in the recent decade, such as sudden currency value declines and concomitant inflation. It accentuates the crucial role of efficiency indicators in making informed decisions and bolstering financial stability, especially in economically tumultuous scenarios.