En kvantitativ studie om big bath på Stockholmsbörsenwas written by Salman Alwassiti and Martin Hallgren who studied the economics program at Högskolan väst in Trollhättan during the spring of 2017. Internationally, many studies about big bath have been conducted in relation to different variables. Two variables confirmed to have a clear connection to big bath are negative results and replacement of CEO. What made our essay interesting was that, based on our knowledge, this was the first time a negative result and replacement of CEO was tested in combination for connection to big bath. Based on our knowledge, this was also the first time negative results and the CEO replacement was tested separately for connection to big bath in the Swedish market. Globalization has also brought about new economic rules such as IFRS, which also had an impact on the trends in big baths. The thesis is mainly written to business economists and researchers studying big bath. The purpose of the thesis is to achieve a clear result that answers the research questions:
1. Does a negative result affect the presence of a big bath?
2. Does a CEO replacement affect the presence of a big bath?
3. Does negative result and CEO replacement in combination affect the presence of a big bath?
The aim of the study is to achieve clear results that will answer these research questions. Evidence of correlation between negative results, CEO replacement, both combined and big bath has been obtained through scientific articles for the theoretical reference framework. Based on the theory, the different hypotheses have since been deduced:
Hypothesis 1: A negative economic result increases the incidence of big bath.
Hypothesis 2: The degree of big bath increases when a CEO's replaced.
Hypothesis 3: The combination of both a negative result and a CEO replacement increases the occurrence of a big bath.
The research questions are answered by the fact that the different hypotheses are either in line with reality or must be rejected. To test the hypotheses, a total of 180 small, medium and large listed companies have been selected on the Stockholm Stock Exchange in 2013, 2014 and 2015. The data has been taken from the randomly selected companies' annual reports. The thesis results showed that there was a correlation between negative results and big bath which was quite expected. The correlation test showed that there is a negative correlation between big bath and relative results of -0.277. The standardized betacoefficient also indicated a relationship of -0.277. The significance of the two tests were 0.000. Sweden is on similar level with the other investigated countries from the theory chapter. No statistically significant relationship was found between the big bath and the CEO replacement, which goes against the theoretical reference framework. Nor was there any connection between finding a combination of negative results and CEO replacement and big baths. As a proposal for further studies, big bath can be studied in relation to IFRS introduction in Sweden.