Can we predict high growth firms with financial ratios?

Abstract This study attempts to predict high growth firm (HGF) status with financial ratios. Measures related the firm’s effectiveness in using assets generate profits, EBITDA margin, debt ratio, equity-to-debt ratio and return on are associated HGF status. While ratios improve prediction, prediction remains modest (AUC = 0.627). suggests it is difficult assume a very good forecast from only ratios; therefore, recommendation for researchers policymakers building models predicting HGFs incorporate non-financial variables, like intangible innovation team-related variables. Finally, standardized reporting of performance metrics out-of-sample out-of-time simulation studies.