The Operational Sustainability of the Firm

The operational performance versus financial solvency binomial - OPFS


  • Jose Antonio De França Universidade de Brasilia (UnB)
  • Nathália Alves Carvalho Universidade de Brasilia
  • Clésia Camilo Pereira Universidade de Brasilia
  • Eduardo Tadeu Vieira University of Brasilia - UnB



Operational Performance versus Financial Solvency, nominal payment capacity, degree of operating leverage (DOL), operational sustainability of the firm


This article presents the research results that assess a firm’s operational sustainability by combining the Degree of Operating Leverage (DOL) with the Current Liquidity Ratio (CLR) to present the Operational Performance versus Financial Solvency (OPFS) binomial, using a non-parametric model. The combination of the DOL with the CLR identifies metrics that indicate that a firm operates at full installed capacity and injects synergy at the generation of financial assets. The model was tested with data from standardized financial statements from 48 firms distributed among 6 sectors of the Brazilian economy, from 2007 to 2017. The results obtained suggest that, when a firm operates at full installed capacity, the DOL varies between 1 and 2, and the CLR is higher than the DOL. From the 6 sectors contemplated by the sample, 4 stand out by operating at full installed capacity with the CLR higher than the DOL, and 2 sectors signal some idleness with the DOL above 2 and the CLR lower than the DOL, such as the Public Utilities Sector (PU) indicating the highest efficiency among all. These results are relevant to illustrate that the combination of the DOL with the CLR is robust enough to evaluate a firm’s operational sustainability.


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Author Biographies

Jose Antonio De França, Universidade de Brasilia (UnB)

PhD in Accountancy and in Economics. Professor of the Department of Accounting and Actuarial Sciences - University of Brasilia - UnB

Nathália Alves Carvalho, Universidade de Brasilia

Bachelor in Accountancy Sciencies

Clésia Camilo Pereira, Universidade de Brasilia

Doctor in Accountancy

Eduardo Tadeu Vieira, University of Brasilia - UnB



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DOI: 10.31686/ijier.vol9.iss1.2909

How to Cite

De França, J. A., Carvalho, N. A., Pereira, C. C., & Vieira, E. T. . (2021). The Operational Sustainability of the Firm : The operational performance versus financial solvency binomial - OPFS . International Journal for Innovation Education and Research, 9(1), 353–370.
Received 2020-12-18
Accepted 2021-01-05
Published 2021-01-01

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