Description

Financial metrics are crucial to determine what companies are doing well, what they are doing poorly, and how they should change. It is an ongoing problem of managers to focus on key metrics in order to track their company performance well and be able to focus on how to improve their bottom line. This paper determines which financial metrics best track the performance of a company by evaluating various metrics which companies can use to track their performance measured against their market capitalization. I expect that an increase in the debt to equity ratio will be associated with an increase in a company?s market capitalization. This paper studies ten companies from the biotechnology industry. Utilizing data from the past ten years will allow the study to cover the Great Recession and examine how the financial metrics performed both during the recession and during the recovery of the economy. Knowing which metrics are more telling of a company?s performance allows the company to spend more time in the necessary areas, thus saving a great amount of time and resources. Analyzing what constitutes a healthy performing company is telling of past performance, current performance, and where the performance will likely be in the future.

COinS
 

The Standards of Success: Tracking Market Capitalization in Companies

Financial metrics are crucial to determine what companies are doing well, what they are doing poorly, and how they should change. It is an ongoing problem of managers to focus on key metrics in order to track their company performance well and be able to focus on how to improve their bottom line. This paper determines which financial metrics best track the performance of a company by evaluating various metrics which companies can use to track their performance measured against their market capitalization. I expect that an increase in the debt to equity ratio will be associated with an increase in a company?s market capitalization. This paper studies ten companies from the biotechnology industry. Utilizing data from the past ten years will allow the study to cover the Great Recession and examine how the financial metrics performed both during the recession and during the recovery of the economy. Knowing which metrics are more telling of a company?s performance allows the company to spend more time in the necessary areas, thus saving a great amount of time and resources. Analyzing what constitutes a healthy performing company is telling of past performance, current performance, and where the performance will likely be in the future.

 

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