The Role of Leverage to Profitability at a Time of Economic Crisis

Panagiotis Papadeas, Kossieri Evangelia and Katsouleas George

International Business Research, 2017, vol. 10, issue 11, 70-78

Abstract: This article examines the assets, liabilities, equity, expenses, sales and profits of the Greek technology sector throughout the period 2008-2015. The author is attempting to interpret the effectiveness and profitability of corporations listed in the Athens Stock Exchange in the context of the recent economic crisis through the concepts of operating leverage and Altman z-score. Our results indicate that the above-mentioned theories can be insufficient, when additional factors, such as the degree of expenses-to-sales adjustment, or a more qualitative approach in financial statements analysis is not taken into account as well.

Keywords: accounting data; profitability; adjusting expenses; sales; Z-score (search for similar items in EconPapers)
JEL-codes: G01 G10 G30 M41 (search for similar items in EconPapers)
Date: 2017
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Persistent link: https://EconPapers.repec.org/RePEc:ibn:ibrjnl:v:10:y:2017:i:11:p:70-78

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