Financial Ratios in Women-Owned and Men-Owned Small Firms: Evidence from Finland

The aim of this study is to show how the key ratios of financial statement analysis differ in companies owned by women and men. In the study, nine hypotheses are derived based on previous studies. The central starting point for the hypotheses concerning the differences in key ratios is the first hypothesis that women-owned companies are more labor-intensive than men-owned companies due to women’s personal factors. It follows from this hypothesis that the cost structures and the balance sheet structures of companies owned by women and men are different, which leads to differences in key figures. In addition to labor intensity, the derived hypotheses concern three ratios of profitability, two ratios of solvency and three ratios of liquidity. The hypotheses are tested with data consisting of 6951 women-owned and 30,916 men-owned small and medium-sized Finnish companies from the year 2020. In these companies, the owner is the global Ultimate owner (GUO) who is at the top of the company’s ownership structure. Financial ratios are compared to each other in a non-controlled situation and in a controlled situation where control variables are used. The results of the study mostly support the derived hypotheses.