How susceptible Norwegian firm’s profitability really is?
Roussou, Maria Georgia
School of Economics, Business Administration and Legal Studies, MSc in International Accounting, Auditing and Financial Management
This particular dissertation was written as part of the studies on the MSc in
International Accounting, Auditing, and Financial Management at the International
This paper concentrates in the Norwegian market and examines the
relationship between the financial performance of the listed companies in Børs stock
exchange and an extensive set of variables like the size of the firm, debt/EBITDA
ratio, financial leverage ratio etc. Panel data from 2004 since 2015 along with
regression analysiswere used for the research. Furthermore, a second stage analysis
for the pre-recession, recession and post-recession period has been made, in order
to determine the possible influence in the firm’s profitability during these periods.
Although scientific research has been made before for the profitability’s
actual susceptibility for several countries and industries, no prior investigation has
been made for the Norwegian market as a whole. The results indicated that during
all the periods under analysis there is a negative relationship between profitability
and debt/EBITDA ratio. Moreover, during the overall period (2004-2015) there is a
positive significant relationship between the firms’ profitability and the size of the
firm- regarding its assets-, fixed asset ratio and financial leverage ratio. During the
pre-recession period the size of the firm and financial leverage ratio seem to
influence profitability in a positive way and also in the post-recession period the size
of the firm (assets) play a significant part too. On the other hand, during the
recession period, results quite naturally indicates that financial leverage ratio
influences Norwegian firms’ profitability and the asset factor is nowhere to be found.