Forecast of bankruptcy and stock valuation in sustainable companies in Mexico in the COVID19 era

Authors

DOI:

https://doi.org/10.17981/econcuc.42.2.2021.Econ.1

Keywords:

Investment, Stock market, Sustainability, Bankruptcy, Stock valuation, Investment valuation, Z score, Tobin's Q

Abstract

In recent years, sustainable companies have been a great boom in terms of investment and sustainable measures by them, which is why several investors have sought to shape their investment portfolios with sustainable companies. Sustainable is understood as the process that seeks to achieve economic prosperity and the balance between the environment and the use of natural resources. The S & P / BMV Total Mexico ESG Index of the Mexican Stock Exchange brings together several companies that have the best practices in environmental, social and corporate governance performance, this with the aim of forming a solid economy that is appropriate to the current context and the needs of the future. The study of this research focuses on the analysis of companies that belong to the S & P / BMV Total Mexico ESG Index of the Mexican Stock Exchange, with the aim of applying the Tobin Q calculation that was proposed by James Tobin (1969), the which consists of determining if the shares of the companies are undervalued, overvalued or are valued correctly and, on the other hand, the calculation of Altman's Z score that was proposed by Edward Altman (1968), which consists of forecasting bankruptcy in companies, These calculations are used to observe if the companies that belong to this index have: financial health, if the share value of these entities is overvalued or undervalued and the probabilities of bankruptcy that these same firms have. It is concluded that as a result of COVID-19 the Financial Statements were affected and therefore the companies analyzed are at risk of bankruptcy according to the parameters of the aforementioned models Stock market, Sustainable, Investment

 

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Author Biographies

Arturo Morales Castro, Universidad Nacional Autónoma de México

He has a degree in Economics from the FE of the UNAM, a Master in Finance and a Ph.D. in Administration Sciences from the FCyA-UNAM, and a Post-doctorate from the UAEMex and USAC. Research lines: Financial Economics, Financial Risks, Derivatives Market, Determinants of the Exchange Rate.

Sandra Avendaño Cruz, Universidad Nacional Atónoma de México

She has a degree in Economics from the FES Aragón (UNAM). Research based on topics related to the exchange rate, sustainable index, econometrics, economics and finance. Master's student in Corporate Finance from the Graduate School of Accounting and Administration (UNAM).

José Miguel Mata Hernández, Universidad Nacional Atónoma de México

He has a degree in International Business and Commerce from the Autónoma University of Querétaro in 2018 (Querétaro, Mexico). Specialty in Financial and Business Risk Management EUDE. He is currently mastering the Master's Degree in Stock Finance at the Postgraduate Program of the Faculty of Accounting and Administration of the Universidad Autónoma of México. His research topics are focused on financial markets, the currency market, market analysis and behavior, financial technology companies. He is a research fellow in the Postgraduate Program of the Faculty of Accounting and Administration of the Universidad Autónoma of México.

References

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Published

2021-03-01

How to Cite

Morales Castro, A., Avendaño Cruz, S., & Mata Hernández, J. M. (2021). Forecast of bankruptcy and stock valuation in sustainable companies in Mexico in the COVID19 era. ECONÓMICAS CUC, 42(2), 161–172. https://doi.org/10.17981/econcuc.42.2.2021.Econ.1

Issue

Vol. 42 No. 2 (2021)

Section

Articles: Economy and Finance

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