Evaluating the financial performance of Vietnamese listed industrial firms using compositional data analysis and PCA indexing

Vietnam’s industrial sector plays a central role in economic growth and investment, yet firms differ substantially in the financial resilience required to sustain long-term development. This study examines how structural financial risk and management efficiency are associated with the performance of Vietnamese listed industrial firms and whether these relationships vary across financial profiles. Using a balanced panel of 135 firms over 2016–2024, the study applies a three-stage analytical framework. Compositional data analysis and Ward’s hierarchical clustering first identify recurring firm-year profiles based on relative financial statement structures. Principal component analysis then combines eleven accounting ratios into composite indices of Performance, Financial Risk, and Management Efficiency. Finally, interactive two-way fixed-effects models with firm-clustered standard errors estimate profile-specific relationships. Four financial profiles are identified. Financial risk is negatively associated with performance across all profiles, with the strongest adverse relationship observed in the most financially vulnerable profile. Management efficiency is positively associated with performance in several profiles, with a significantly stronger relationship in the largest profile. The main patterns remain broadly consistent when using Driscoll–Kraay inference and considering lagged profile membership. These findings suggest that profile-based assessment can complement uniform sector-wide benchmarks when evaluating firms’ financial resilience and capacity for longer-term sustainability-oriented investment.