Irrelevance of Financial Indicators in Measuring Performance Romanian Companies

This paper, by means of the model of correlation coefficient between the two variables, this paper tests the intensity of the correlation between the three traditional financial indicators: the return on assets (ROA), the return on equity (ROE), the financial leverage (LF) and the indicators reflecting the change of the exchange rate (the total shareholder return-TSR and the price-to-earnings ratio -PER). The empirical research is addressed both transversely (on a sample of companies listed on the Bucharest Stock Exchange (BSE) which have as their object of activity manufacturing pharmaceuticals and longitudinally (for the 2011-2012 period) based on the positive research method. The results show that between the stock exchange indicator (TSR, PER) and the aforementioned traditional financial indicators (ROA, ROE, LF) there is a weak connection, which means that the traditional financial indicators calculated for the Romanian companies cannot anticipate the investors’ expectations on the future benefits.