THE DETERMINANTS OF PROFITABILITY IN COMPANIES LISTED ON THE BUCHAREST STOCK EXCHANGE
This research aims to establish the determinants of financial performance in 126 Romanian companies listed on the Bucharest Stock Exchange, over a period of ten-years (2003-2012). The analysis is based on cross sectional regressions. Return on assets is the performance proxy, while the variables ex...
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| Format: | Article |
| Language: | English |
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University of Petrosani
2014-10-01
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| Series: | Annals of the University of Petrosani: Economics |
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| Online Access: | http://www.upet.ro/annals/economics/pdf/2014/part1/Vatavu.pdf |
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| author | SORANA VĂTAVU |
| author_facet | SORANA VĂTAVU |
| author_sort | SORANA VĂTAVU |
| collection | DOAJ |
| description | This research aims to establish the determinants of financial
performance in 126 Romanian companies listed on the Bucharest Stock Exchange, over a period of ten-years (2003-2012). The analysis is based on cross sectional regressions. Return on assets is the performance proxy, while the variables expected to have a significant impact on profitability are debt, asset tangibility, size, liquidity, taxation, risk, inflation and crisis. Regression results indicate that profitable companies operate with limited borrowings. Tangibility, business risk and the level of taxation have a negative impact on return on assets. Although earnings are sustained by significant sales turnover, performance is affected by high levels of liquidity. Periods of unstable economic conditions, reflected by high inflation rates and the current financial crisis, have a strong negative impact on corporate performance. |
| format | Article |
| id | doaj-art-4a9d4467a91140acbbfe87e82c186518 |
| institution | DOAJ |
| issn | 1582-5949 2247-8620 |
| language | English |
| publishDate | 2014-10-01 |
| publisher | University of Petrosani |
| record_format | Article |
| series | Annals of the University of Petrosani: Economics |
| spelling | doaj-art-4a9d4467a91140acbbfe87e82c1865182025-08-20T03:11:43ZengUniversity of PetrosaniAnnals of the University of Petrosani: Economics1582-59492247-86202014-10-01XIV1329338THE DETERMINANTS OF PROFITABILITY IN COMPANIES LISTED ON THE BUCHAREST STOCK EXCHANGESORANA VĂTAVU0West University of Timișoara, RomaniaThis research aims to establish the determinants of financial performance in 126 Romanian companies listed on the Bucharest Stock Exchange, over a period of ten-years (2003-2012). The analysis is based on cross sectional regressions. Return on assets is the performance proxy, while the variables expected to have a significant impact on profitability are debt, asset tangibility, size, liquidity, taxation, risk, inflation and crisis. Regression results indicate that profitable companies operate with limited borrowings. Tangibility, business risk and the level of taxation have a negative impact on return on assets. Although earnings are sustained by significant sales turnover, performance is affected by high levels of liquidity. Periods of unstable economic conditions, reflected by high inflation rates and the current financial crisis, have a strong negative impact on corporate performance.http://www.upet.ro/annals/economics/pdf/2014/part1/Vatavu.pdfprofitabilityleverageregression analysis |
| spellingShingle | SORANA VĂTAVU THE DETERMINANTS OF PROFITABILITY IN COMPANIES LISTED ON THE BUCHAREST STOCK EXCHANGE Annals of the University of Petrosani: Economics profitability leverage regression analysis |
| title | THE DETERMINANTS OF PROFITABILITY IN COMPANIES LISTED ON THE BUCHAREST STOCK EXCHANGE |
| title_full | THE DETERMINANTS OF PROFITABILITY IN COMPANIES LISTED ON THE BUCHAREST STOCK EXCHANGE |
| title_fullStr | THE DETERMINANTS OF PROFITABILITY IN COMPANIES LISTED ON THE BUCHAREST STOCK EXCHANGE |
| title_full_unstemmed | THE DETERMINANTS OF PROFITABILITY IN COMPANIES LISTED ON THE BUCHAREST STOCK EXCHANGE |
| title_short | THE DETERMINANTS OF PROFITABILITY IN COMPANIES LISTED ON THE BUCHAREST STOCK EXCHANGE |
| title_sort | determinants of profitability in companies listed on the bucharest stock exchange |
| topic | profitability leverage regression analysis |
| url | http://www.upet.ro/annals/economics/pdf/2014/part1/Vatavu.pdf |
| work_keys_str_mv | AT soranavatavu thedeterminantsofprofitabilityincompanieslistedonthebuchareststockexchange AT soranavatavu determinantsofprofitabilityincompanieslistedonthebuchareststockexchange |