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

Author

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  • 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
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    File URL: http://feaa.ucv.ro/AUCSSE/0048v1-005.pdf
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    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)

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    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

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