Open AccessIs Sales Growth Of Companies Listed On The Warsaw Stock Exchange Mean-Reverting?
Author(s) -
Jacek Welc
Publication year - 2011
Publication title -
the international business and economic research journal/the international business and economics research journal
Language(s) - English
Resource type - Journals
eISSN - 2157-9393
pISSN - 1535-0754
DOI - 10.19030/iber.v10i1.931
Subject(s) - mean reversion , pace , stock exchange , profitability index , monetary economics , earnings growth , leverage (statistics) , business , earnings , economics , financial economics , accounting , finance , statistics , mathematics , geodesy , geography
Empirical research shows that corporate financial results (measured by sales growth, profitability, earnings growth, leverage, etc.) are characterized by the long-term reversion toward the levels average for the whole economy. In the case of sales growth this means that companies which in a given year show above-average growth in the following periods express the tendency to show slower pace of this growth and companies which in a given year show below-average growth in the following periods express the tendency to show faster pace of growth. In the paper we explore the reversion toward the mean of the sales growth of companies listed on the Warsaw Stock Exchange in the period of 2001-2009. The research confirmed the strong tendency of sales growth to revert toward the mean.