Proceedings

loans of the banking system, they may decide to resort to financing instruments from
the capital market.
The determination of the financial leverage ratio lies in the need for investors to
assess financial risk in making investment decision.
To start the analysis we considered necessary to review the progress of the BET index
in the five years under study to observe the evolution of the annual value of
transactions volume on the capital market.
Graph 1. BET evolution during 2005-2009
(Source: Information taken from www.bvb.ro)
As it can be seen from the chart concerning the BET index evolution calculated on the
basis of traded volume during 2005 - 2009 we find that the level of 51% of BET index
in 2005 recorded a downward trend for the period 2006-2007, culminating in a
negative level of about - 70% in 2008. This can be justified by the concerns that were
on the market in 2008, considering that this was a maximum period of the crisis we
are still going through.
The negative trend from 2008 was stopped and in 2009 we can find that the anti-crisis
effects at economic level began to make their presence felt, so it led to a positive
evolution of the BET index, a sign that the stock market evolutions have registered a
recovery.
Next, we proceed to the analysis of results evolution achieved by the financial
leverage ratio. We conducted a comparative analysis of this indicator on a period of
five years for a total of five companies that are listed on the stock market. This study
was conducted to determine the level of financial risk, using a method easy to use for
its quantification.
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