Impact of Cost Cutting on Financial Performance: A Study Using Ratio Analysis in Al Ayam Newspaper

The primary purpose of the research is to analyze the impact of cutting cost on the financial performance of M/s. Al Ayam Publication Establishment B.S.C. (c) publishers of “Al Ayam Newspaper” in the kingdom of Bahrain. Hence forth referred to as “Al Ayam Newspaper Company”. This concept is popularized not only in Bahrain but also worldwide especially with the current economic recession and financial crisis. To maximize the whole performance of the company the managers and employees should be fully aware of this strategy. The purpose of this study is to find the impact of cost cutting strategies on the financial performance for the small and medium businesses like this newspaper firm. The present research is conducted to analyze the financial performance using the method of “ratio analysis”. The methodology used is collecting the secondary data from Al Ayam Audited financial statements from 2014 to 2018 then, using the financial Ratio analysis method, the result is implemented to the current year’s cost cutting strategies. The major study findings of cost cutting strategies are that by moving digitally, reducing the total cost, minimizing the distribution return quantities and reducing of production wastage, will have a positive impact on financial performance. The study analyses the obstacles of the higher cost and provides suggestion and recommendation for small and medium companies in solving the difficulties that employers face in the kingdom of Bahrain.