Partial Title: 2


Financial crisis

Financial crisis is a situation in which there is a drop in value in the assets of an organization. It mostly occurs where there is a financial panic about the stability of the currency of a country or the future of an organization is not guaranteed and as a result the investors end up selling the stock and assets in the organization. Robert, (2008) shows that the stability of a country in terms of political, social, economic and environmental stability usually influences the risk of financial crisis occurring in the country. Based on this studies conducted before by different authors, then we can hypothesise that the economic, political, social and environmental stability of an organization highly determines the probability that an organization will invest in the country. Similarly, the size of the firm that the management is willing to invest in the country is determined by the stability of the organization. Therefore, in as much as other factors such as the size of the market determine the size of assets that the organization invests in the country, the stability of the country also plays a role in determining the investment decisions of the country

To collect the required data, information will be gathered from a range of about 200 Australian firms that are trading in the Australian stock exchange. Factors to be considered while examining the financial crisis for organizations that are publicly traded firms include factors such as the reported net profit after tax, return on assets, the book to market value of the organization, leverage and other control variables that determine the size of the firm [ CITATION Rob081 l 2057 ].


Robert, J. S. (2008). The subprimesolution: how today’s global financial crisis happened and what to do about it. New Jersey: Princeton University Press.