A Quantitative Measure for Financial Resilience of Firms: Evidence from Tehran Stock Exchange

Abstract

Recent financial crises have strained the performance of different firms, and it has challenged investors to invest in these firms' stocks. Measuring firms' resilience from a financial standpoint in terms of crises is an important indicator for investors. Logically, investing in firms with higher historical financial resilience is more attractive for investors. In the literature, resilience is defined as anticipating, preparing, responding, and adapting to incremental change and sudden disruptions to survive and prosper. In this paper, the concept of financial resilience has been studied from various dimensions, and its quantification approaches are examined. The models developed in this paper are for calculating financial resilience in terms of key indicators, Value at Risk, and Conditional Value at Risk. Then, by comparing each of these methods, it has been tried to verify the methods by applying quantitative data of four bankrupt and four non-bankrupt firms listed on the Tehran stock exchange in recent years. The results show the proper performance of the proposed measure in expressing the concept of financial resilience in critical conditions.

Organizational Resilience, Balanced Scorecard, Performance Excellence: Model for Organizational Sustainability

“…Organizational resilience is a newer tradition in management theory that incorporates insights from both coping and contingency theories. It refers to the ability of an organization to anticipate, prepare for, respond and adapt to incremental change and sudden disruptions in order to survive and prosper (Rezaei Soufi et al, 2021). Scholars see organizational resilience as the ability to cope with stressful, unexpected, and adverse situations and the ability to quickly pick up from where they left off.…”