This research study compares the financially-distressed and financially-healthy companies, on the basis of their board composition and size, ownership and performance, over the 2006–2010 time period. While focusing on manufacturing sectors in Pakistan, the logit-regression results reveal that all variables are significantly different between financially-distressed and financially-healthy companies. The first of its kind, the present study benefits business people as well as financial analysts and investors. Their decision-making processes will be enhanced as they evaluate financially-distressed firms and financially-healthy ones. The study has some limitations also. It has ignored financial sector of Pakistan because of different reporting style of financial firms. The periods before and after the period of financial distress have also been ignored in the study. Despite its limitations, the study contributes a pragmatic insight into the systemic aspects of financial performance, most helpful both to future business research and to policymaking practice.
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