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The condition of companies in relation to their growth on example of NYSE and NASDAQ

Author

Listed:
  • Agata Gniadkowska-Szymańska

    (University of Lodz)

  • Anna Pluskota

    (University of Lodz)

  • Monika Bolek

    (University of Lodz)

Abstract

This article covers the topic of the relationship between the growth of companies and their financial condition when different business profiles are surveyed, such as high-tech, growth potential companies included in the NASDAQ Composite Index and traditional, matured companies included in the Dow Jones Industrial Average (DJIA), commonly known as blue-chip stocks. The hypothesis that the relationship between the Altman Z-score and the growth of enterprises as measured by assets, equity, sales, and earnings per share is positive was tested with Granger and VAR models. The main difference was found to be related to the size of the companies size and dynamics of growth. It was also shown that between NASDAQ enterprises there was no relationship between their growth and Altman Z-score, whereas when the DJIA blue chips were taken into account, a positive relationship was identified. It can be concluded that high-tech enterprises grow in a less predictable way not related to their economic condition, but mature enterprises focused on the growth and their condition. The value added of the article is finding that high-tech companies with growth potential and blue chips are managed in a different way due to their strategies of development.

Suggested Citation

  • Agata Gniadkowska-Szymańska & Anna Pluskota & Monika Bolek, 2024. "The condition of companies in relation to their growth on example of NYSE and NASDAQ," Future Business Journal, Springer, vol. 10(1), pages 1-9, December.
    • Handle: RePEc:spr:futbus:v:10:y:2024:i:1:d:10.1186_s43093-024-00360-2
    DOI: 10.1186/s43093-024-00360-2
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    More about this item

    Keywords

    Company growth; Economic condition; Altman Z-score model;
    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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