The Impact of Inflation on the Financial Performance of the Enterprise

Abstract

This study analyzes the relationship between macroeconomic inflationary pressures and the financial stability of Small and Medium Enterprises (SMEs) in the Republic of Moldova. Amidst the geopolitical volatility of 2025 and early 2026, characterized by regional conflicts and rising energy costs, the research evaluates how inflation reshapes accounting indicators. Using comparative and structural analysis, the paper focuses on the financial evolution of S.A. ALFA-NISTRU between 2022 and 2024. Findings indicate that while hyperinflation in 2022 initially pressured operations, the entity improved its gross profit margin from 27.9% to 35.2% through strategic cost optimization. The article also provides a critical assessment of inventory valuation, noting that while the FIFO method may inflate accounting profits, the Weighted Average Cost (WAC) method offers a more realistic view during price fluctuations. Ultimately, the study concludes that while nominal results showed an upward trend, real performance remains vulnerable to utility spikes and compressed consumer purchasing power. CZU: [657.372.12:314.012.6]:336.748.12(478); JEL: M40, M41, E31