Analysis of the Factors Contributing to the Differences in Financial Data of Energy Companies

Haojun Wang ()
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Haojun Wang: Lanzhou University, School of Economics

A chapter in Proceedings of the 9th International Conference on Financial Innovation and Economic Development (ICFIED 2024), 2024, pp 412-425 from Springer

Abstract: Abstract This paper selects 30 companies in the energy industry, which is a fundamental, monopolistic, susceptible, and high-risk industry, and calculates the companies’ financial data such as D/V, beta coefficient and WACC. After analyzing the factors contributing to the differences in their financial data, the article concludes that companies engaged in exploration and production of oil and gas have lower D/V, higher beta coefficients and higher WACC, while companies engaged in other businesses such as storage and transportation of oil and gas or utilities such as electricity have the opposite. The companies’ ESG performances are also correlated with their financial data. The paper summarizes that companies engaged in exploration and production of oil and gas face higher bankruptcy costs and higher risks of stock price fluctuations. Meanwhile, an energy company’s financial data can infer whether it’s engaged in traditional oil and gas exploration and production or it’s transforming. The article finally argues that for traditional energy companies, promoting transformation can be a good choice.

Keywords: Energy companies; Capital structure; Beta coefficient; Exploration and production of oil and gas (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:spr:advbcp:978-94-6463-408-2_47

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DOI: 10.2991/978-94-6463-408-2_47

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