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In the circumstances of globalisation, the assessment of the companies’ business performance becomes crucially important for small and medium-sized enterprises (SMEs). Despite a wide variety of the methods for evaluation of the companies’ financial performance offered by the theory of economics, the issue on what is the optimal method to be chosen and to be applied by the company to manage efficiently the enterprise is still up-to-date. During the research performed by the authors, it was established that the SMEs business performance assessment in Latvia can be carried out mainly using just financial indicators. The research reveals inadequacy of traditional performance measurement approach based on the analysis of just financial indicators of the economic activities and explains its insolvency by using as an example the analysis of financial conditions of some bancrupted companies during the recent …