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

Monika Bolek () and Agata Gniadkowska-Szymańska ()
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Monika Bolek: University of Lodz
Agata Gniadkowska-Szymańska: University of Lodz

Asia-Pacific Financial Markets, 2023, vol. 30, issue 2, No 3, 323-337

Abstract: 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.

Keywords: Company growth; Financial condition; Altman Z-score; EPS growth (search for similar items in EconPapers)
JEL-codes: G30 G32 G33 M2 (search for similar items in EconPapers)
Date: 2023
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DOI: 10.1007/s10690-022-09376-6

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