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Stock Market Price and Company Performance Between Two Major Downturns: The Financial Crisis and the COVID-19 Pandemic

Stock Market Price and Company Performance Between Two Major Downturns: The Financial Crisis and the COVID-19 Pandemic
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Author(s): Larissa Batrancea (Babes-Bolyai University, Cluj-Napoca, Romania)
Copyright: 2021
Pages: 21
Source title: Impact of Infodemic on Organizational Performance
Source Author(s)/Editor(s): Muhammad Waseem Bari (Government College University, Faisalabad, Pakistan)and Emilia Alaverdov (Georgian Technical University, Georgia)
DOI: 10.4018/978-1-7998-7164-4.ch016

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Abstract

The chapter investigates the degree to which stock market prices were influenced by company financial performance during the period March 2007–September 2020, which included both the beginning of the global financial crisis and the ongoing COVID-19 pandemic crisis. Using quarterly financial data retrieved from the first 34 companies listed on the New York Stock Exchange according to their transaction volumes, empirical results show that, in the period between the two crises, stock market metrics including price to earnings, price to sales, price to book value, and price to free cash flow were shaped by financial performance indicators such as gross margin ratio, operating margin ratio, earnings before interest, taxes, depreciation and amortization margin, pretax margin, and net profit margin.

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