## 2 Materials and Methods
### Methodology  
According to the work of [33], business economic sustainability is classified through its business financial performance, competitiveness, and the economic impact generated by the firm and its stakeholders. This research encompasses a numerical and narrative analysis of key financial ratios to 47 Portuguese firms (active in 2019) operating in the NACE Rev. 2 code 37 and 175 Spanish firms from the same sector from 2016 to 2019. A longitudinal study helps to understand the evolution of a firm's financial situation, so 4 years of observations were used. We choose to calculate ratios of different groups to achieve an overall picture of the firm's financial sustainability, namely profitability, liquidity, indebtedness, and growth. All ratios were calculated per firm and per year. In a second step, the software IBM SPSS, version 27, was used for statistical analysis. Profitability ratio analysis is a suitable approach to measure a firm's performance because it means the firm's ability to generate earnings. Firms' profitability is essential both for shareholders and creditors because profits allow for dividends and funds for covering debts. Examples include return on assets (ROA), return on equity (ROE), cash return on assets, return on debt, return on retained earnings, return on revenue, risk-adjusted return, return on invested capital, and return on capital employed. This paper employs the two first measures, which are the most used: ROA and ROE (e.g., the work of [34; 35]). The ROA is one of the best-known ratios of profitability. It measures the firm's economic profitability, and it can be used as an indicator of a firm's efficiency in using its investments to generate profits. The formula is:  
\[\text{Return on Assets (ROA) = Net income/Total Assets} \tag{1}\]  
ROA should be positive and the highest as possible since it means that with less investment (total assets), the firm is more able to have profits. Although, if too high may mean that the firm needs to do new investments in fixed assets to continue to grow and follow the market needs. The ROE measures the firm's ability to generate profits using shareholders' investments. It is also known as shareholders return. The calculation formula is as follows:  
\[\text{Return on Equity (ROE) = Net income/Total Equity} \tag{2}\]  
This ratio shows how much profit is generated by the monetary unit of shareholders' equity. In other words, it measures how efficient is the money from shareholders being used for the generation of earnings. In view of this, ROE, as well as ROA, should be positive, and a high value is desirable because that would mean efficiency in the use of investors' funds. Liquidity ratios measure firms' ability to pay off current debt obligations without raising external capital. Examples of liquidity ratios are current ratio, quick ratio, and operating cash flow ratio. This paper uses the current ratio measured as:  
\[\text{Current Ratio = Current Assets/Current Liabilities} \tag{3}\]This ratio measures a firm's ability to pay off its current liabilities (payable within one year) with its current assets (cash, accounts receivable, and inventories). It evaluates the coverage of short-term debts in an emergency. The higher the ratio, the better the firm's liquidity position. Although, if too high may mean that a firm is not doing efficient investments (e.g., high value of trade receivables may lead to bad debts and not to operational cash flows). Indebtedness ratios allow understanding a firm's capital structure, being useful to assess long-term financial risk since it provides information about firms' capacity to fulfill their long-term financial commitments. This paper uses the ratio of leverage, also known as debt ratio. When liabilities finance most of the assets, the firm is considered highly leveraged and is regarded as riskier for lenders.