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Is the Growth of Companies Influencing Their Financial Condition Depending on Their Size: S&P 500 Listed Companies Example

Author

Listed:
  • Monika Bolek

    (University of Lodz)

  • Agata Gniadkowska-Szymańska

    (University of Lodz)

Abstract

The goal of this paper is related to the analysis of the earnings per share growth and the financial condition of companies as measured by Altman Z-Score Model and their relation. The research has been carried out on the example of S&P500 Index listed companies. The correlation and OLS panel data models with fixed effects were tested. The results indicate that the relationship between the EPS growth and Altman Z-Score is not linear and the smaller the company, the higher its growth index. In most of cases the growth of EPS influenced the Altman Z-scores in a positive way. On contrary in the group of medium size companies, EPS growth influenced the financial condition in a negative way. The article fills the gap related to the growth, the size and financial condition of the company that can improve if the management of growth is efficient.

Suggested Citation

  • Monika Bolek & Agata Gniadkowska-Szymańska, 2023. "Is the Growth of Companies Influencing Their Financial Condition Depending on Their Size: S&P 500 Listed Companies Example," Asia-Pacific Financial Markets, Springer;Japanese Association of Financial Economics and Engineering, vol. 30(2), pages 323-337, June.
    • Handle: RePEc:kap:apfinm:v:30:y:2023:i:2:d:10.1007_s10690-022-09376-6
    DOI: 10.1007/s10690-022-09376-6
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    References listed on IDEAS

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    More about this item

    Keywords

    Company growth; Financial condition; Altman Z-score; EPS growth;
    All these keywords.

    JEL classification:

    • G30 - Financial Economics - - Corporate Finance and Governance - - - General
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • G33 - Financial Economics - - Corporate Finance and Governance - - - Bankruptcy; Liquidation
    • M2 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Economics

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