IDEAS home Printed from https://ideas.repec.org/a/aio/aucsse/v1y2020i48p47-62.html
   My bibliography  Save this article

The Financial Performance – Risk Correlation Of Companies Listed On The Bucharest Stock Exchange

Author

Listed:
  • Andreea Claudia Chiurtu

    (University of Craiova Faculty of Economics and Business Administration Craiova, Romania)

Abstract

This present paper analyzes the correlation between the financial performance and the risks based on a sample of 40 companies listed on Bucharest Stock Exchange. The period subjected to observation was in amount of three years (2016-2018). The performance is quantified on the basis of accounting indicators: return on assets (ROA) and return on equity (ROE). Also the financial risk is determined through financial leverage (level of indebtedness). The aim of this paper work is to determine the financial risk in order to obtain financial performance, as well as testing the relation between the financial performance and risks. The statistic analyze of data is based on statistic software SPPS, and also on Pearson coefficient. As a result, the statistic correlation between the rate of return equity (ROE) as a dependent variable and independent variables: return of assets (ROA), the rate of interest (IR), financial leverage (FR), is verified. Therefore, these analyses confirm that there are correlations between independent variables and the rate of financial profitability of the rate of return on equity.

Suggested Citation

  • Andreea Claudia Chiurtu, 2020. "The Financial Performance – Risk Correlation Of Companies Listed On The Bucharest Stock Exchange," Annals of University of Craiova - Economic Sciences Series, University of Craiova, Faculty of Economics and Business Administration, vol. 1(48), pages 47-62, August.
    • Handle: RePEc:aio:aucsse:v:1:y:2020:i:48:p:47-62
    as

    Download full text from publisher

    File URL: http://feaa.ucv.ro/AUCSSE/0048v1-005.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Balasundaram Nimalathasan & Assoc. Prof. Valeriu Brabete Ph.D, 2010. "Capital Structure And Its Impact On Profitability: A Study Of Listed Manufacturing Companies In Sri Lanka," Revista Tinerilor Economisti (The Young Economists Journal), University of Craiova, Faculty of Economics and Business Administration, vol. 1(15), pages 7-16, November.
    2. Reilly, Frank K., 1997. "The impact of inflation on ROE, growth and stock prices," Financial Services Review, Elsevier, vol. 6(1), pages 1-17.
    3. Margaritis, Dimitris & Psillaki, Maria, 2010. "Capital structure, equity ownership and firm performance," Journal of Banking & Finance, Elsevier, vol. 34(3), pages 621-632, March.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. REHAN, Muhammad & KARACA, Suleyman Serdar & ALVI, Jahanzaib, 2020. "Capital Structure And Financial Performance: Case Study From Pakistan Pharmaceutical Sector," Studii Financiare (Financial Studies), Centre of Financial and Monetary Research "Victor Slavescu", vol. 24(3), pages 66-82, September.
    2. Khémiri, Wafa & Noubbigh, Hédi, 2020. "Size-threshold effect in debt-firm performance nexus in the sub-Saharan region: A Panel Smooth Transition Regression approach," The Quarterly Review of Economics and Finance, Elsevier, vol. 76(C), pages 335-344.
    3. Baah Aye Kusi & Lydia Adzobu & Alex Kwame Abasi & Kwadjo Ansah-Adu, 2020. "Sectoral Loan Portfolio Concentration and Bank Stability: Evidence from an Emerging Economy," Journal of Emerging Market Finance, Institute for Financial Management and Research, vol. 19(1), pages 66-99, April.
    4. Bae, John & Kim, Sang-Joon & Oh, Hannah, 2017. "Taming polysemous signals: The role of marketing intensity on the relationship between financial leverage and firm performance," Review of Financial Economics, Elsevier, vol. 33(C), pages 29-40.
    5. Riaqa Mubeen & Dongping Han & Jaffar Abbas & Iftikhar Hussain, 2020. "The Effects of Market Competition, Capital Structure, and CEO Duality on Firm Performance: A Mediation Analysis by Incorporating the GMM Model Technique," Sustainability, MDPI, vol. 12(8), pages 1-18, April.
    6. George Georgakopoulos & Kanellos Toudas & Evangelos I. Poutos & Theodoros Kounadeas & Stefanos Tsavalias, 2022. "Capital Structure, Corporate Governance, Equity Ownership and Their Impact on Firms’ Profitability and Effectiveness in the Energy Sector," Energies, MDPI, vol. 15(10), pages 1-10, May.
    7. Meng, Rujing & Ning, Xiangdong & Zhou, Xianming & Zhu, Hongquan, 2011. "Do ESOPs enhance firm performance? Evidence from China's reform experiment," Journal of Banking & Finance, Elsevier, vol. 35(6), pages 1541-1551, June.
    8. Stefani, Gianluca & Gadanakis, Yiorgos & Lombardi, Ginevra Virginia & Tiberti, Marco, 2017. "The impact of financial leverage on farms capacity to react in market shocks," 2017 International Congress, August 28-September 1, 2017, Parma, Italy 261156, European Association of Agricultural Economists.
    9. Nida Shah, 2016. "The Impact of Working Capital Management on Firms Profitability in Different Business Cycles: Evidence from Pakistan," Journal of Finance and Economics Research, Geist Science, Iqra University, Faculty of Business Administration, vol. 1(1), pages 58-70, March.
    10. Sabri Boubaker & Riadh Manita & Wael Rouatbi, 2021. "Large shareholders, control contestability and firm productive efficiency," Annals of Operations Research, Springer, vol. 296(1), pages 591-614, January.
    11. Jia-Hua Tsai & Shiow-Ying Wen, 2013. "Intellectual Capital, Corporate Governance and Firm Performance," Information Management and Business Review, AMH International, vol. 5(10), pages 482-491.
    12. Kebewar, Mazen & Shah, Syed Muhammad Noaman Ahmed, 2013. "The effect of debt on corporate profitability: Evidence from French service sector," EconStor Preprints 73556, ZBW - Leibniz Information Centre for Economics.
    13. Mário Santos & António Moreira & Elisabete Vieira, 2014. "Ownership concentration, contestability, family firms, and capital structure," Journal of Management & Governance, Springer;Accademia Italiana di Economia Aziendale (AIDEA), vol. 18(4), pages 1063-1107, November.
    14. Dyna Seng & Chaiporn Vithessonthi, 2017. "Environmental Efforts and Firm Performance," PIER Discussion Papers 64, Puey Ungphakorn Institute for Economic Research.
    15. Bernini, Michele & Guillou, Sarah & Bellone, Flora, 2015. "Financial leverage and export quality: Evidence from France," Journal of Banking & Finance, Elsevier, vol. 59(C), pages 280-296.
    16. Lionel Almeida, 2015. "Who are the controlling shareholders? Degree and seniority of control, and CEO pay monitoring," Working Papers hal-04141391, HAL.
    17. Jason Stephen Kasozi, 2018. "Capital Structure and The Profitability of Listed Retail Firms," Journal of Economics and Behavioral Studies, AMH International, vol. 10(1), pages 171-181.
    18. ElBannan, Mona A., 2017. "Stock market liquidity, family ownership, and capital structure choices in an emerging country," Emerging Markets Review, Elsevier, vol. 33(C), pages 201-231.
    19. V. Nazarova V. & S. Glebov P. & В. Назарова В. & С. Глебов П., 2017. "Оценка Влияния Финансовой Архитектуры На Эффективность Компаний Европейского Ритейла // The Impact Of Financial Architecture On The European Retail Company Performance," Финансы: теория и практика/Finance: Theory and Practice // Finance: Theory and Practice, ФГОБУВО Финансовый университет при Правительстве Российской Федерации // Financial University under The Government of Russian Federation, vol. 21(4), pages 100-115.
    20. Gabriela Brendea & Fanuta Pop & Loredana Mihalca, 2022. "Capital Structure and Firm Performance: The Case of Central and Eastern European Economies," Journal of Economics / Ekonomicky casopis, Institute of Economic Research, Slovak Academy of Sciences, vol. 70(5), pages 430-449, May.

    More about this item

    Keywords

    performance; rentability; risk; financial leverage; leverage effect.;
    All these keywords.

    JEL classification:

    • G30 - Financial Economics - - Corporate Finance and Governance - - - General
    • M41 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Accounting

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:aio:aucsse:v:1:y:2020:i:48:p:47-62. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Anca Bandoi (email available below). General contact details of provider: https://edirc.repec.org/data/fecraro.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.