Research Article
The Effectiveness of Ratio Analysis During COVID-19 Based on Bigdata and Information Estimation
@INPROCEEDINGS{10.4108/eai.28-10-2022.2328404, author={Ni Chen}, title={The Effectiveness of Ratio Analysis During COVID-19 Based on Bigdata and Information Estimation}, proceedings={Proceedings of the International Conference on Financial Innovation, FinTech and Information Technology, FFIT 2022, October 28-30, 2022, Shenzhen, China}, publisher={EAI}, proceedings_a={FFIT}, year={2023}, month={4}, keywords={ratio analysis; covid-19; stock market; bigdata; information estimation}, doi={10.4108/eai.28-10-2022.2328404} }- Ni Chen
Year: 2023
The Effectiveness of Ratio Analysis During COVID-19 Based on Bigdata and Information Estimation
FFIT
EAI
DOI: 10.4108/eai.28-10-2022.2328404
Abstract
At the end of 2019, the world started experiencing a unusual pandemic which is called COVID-19. The financial market suffered substantially. This paper utilized the mechanism of ratio analysis to explore how different dimensions of the performance of the most valuable companies being affected under such conditions. Specially, ratio analysis includes P/E, EV/sales, and EV/EBITDA ratio for firms’ scale, revenue growth, EBITDA change, and earnings per share change for growth, and GP/A for profitability. According to the analysis, firms tend to be overvalued during the COVID. In addition, the revenue growth, change of earnings before interest, taxes, depreciation, and change of amortization, earnings per common share all slows down during the COVID-19. Firms’ profitability shows a downward trend which means its’ assets didn’t have enough ability to generate high sales or the gross margin decreased due to the high expenses of production over the years that had COVID. The significance of this research lies on the fact that most of recent researches didn’t use the ratio analysis to interpret the market conditions under COVID-19. These results shed light on guiding further exploration of investment in terms of ratio analysis.