Analysis of the Financial Situation of Selected Respect Index Companies

Stawska Joanna () and Grzesiak Lena ()
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Stawska Joanna: Department of Central Banking and Financial Intermediation, Finance Institute, Economics and Sociology Faculty, University of Lodz,ORCID: 0000-0001-6863-1210.
Grzesiak Lena: Human Resources Department and PhD Student, Accounting Department, Management Faculty, University of Lodz, ORCID: 0000-0001-5078-1675.

Financial Internet Quarterly (formerly e-Finanse), 2018, vol. 14, issue 1, 39-48

Abstract: The concept of Corporate Social Responsibility (CSR) has become popular among organizations, the public, and external stakeholders. Recently, it has been appreciated by capital markets the indexes of which are constructed in such a way as to account for companies’ CSR. One of these indexes is the Respect Index of the Warsaw Stock Exchange. This paper analyses the financial condition of Respect Index companies in Poland using the desk research method. The analysis utilizes indicators of the so-called Du Pont’s pyramid (for all companies under consideration) and stock market indices such as a book value per share (BVPS) and a price-to-earnings ratio (P/E) (for the banking and insurance sectors and all other sectors, respectively). The analysis shows that the financial condition of the studied Respect Index companies in the years 2013 – 2015 was stable in the period of analysis, despite the not-so-optimistic financial situation of their industries. Socially responsible management can often result in good financial position and increase in the company’s rate, which may be indicated by the fact that the Respect Index increased by 40% in 2009-2015 compared to a lower increase WIG (18%) or WIG20 (-20%) decline. To find out more about the relationship between the stability of companies’ financial results and their CSR, more investigations and analyses of companies included in the Respect Index as well as other companies dedicated to CSR issues need to be conducted.

Keywords: Respect Index; Corporate Social Responsibility (CSR); financial analysis (search for similar items in EconPapers)
JEL-codes: M14 N20 O12 (search for similar items in EconPapers)
Date: 2018
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Persistent link: https://EconPapers.repec.org/RePEc:vrs:finiqu:v:14:y:2018:i:1:p:39-48:n:3

DOI: 10.2478/fiqf-2018-0004

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