scholarly journals Issues in selecting profitability indicators for the evaluation of corporate financial performance

2020 ◽  
pp. 6
Author(s):  
Vilius Savickas
Keyword(s):  
Financial Performance ◽  
Theory And Practice ◽  
Cost Calculation ◽  
Corporate Financial Performance ◽  
Company Performance ◽  
Statistical Data Analysis ◽  
Literature Synthesis ◽  
Selection Of ◽  
Depreciation Methods

The article analyses the selection of profitability indicators for the evaluation of corporate financial performance. Both theory and practice, address a variety of profitability indicators, therefore, it is essential to understand the possibilities of using the information they provide, as well as to be able to identify potential reasons of indicator value deviations, and to assess the conditions causing the analysis performed based on these indicators to provide incomplete or unreliable information. The aim of the study is to analyse the main profitability indicators, their potential disadvantages, and possible issues in the analysis and interpretation of these indicators. Methods of logical and comparative analysis of the scientific literature, synthesis and generalisation, statistical data analysis and interpretation were used in this article. The results of the analysis show that there is no universal profitability indicator, that would cover all areas of company performance, because profitability indicators’ reliability, as well as objectivity of comparison to other entities, are influenced by national accounting standards, different prime cost calculation methods, long-term assets depreciation methods, reserve assessment, and other methods.

scholarly journals Pengunaaan Analisis Rasio dalam Pengukuran Kinerja Keuangan Perusahaan pada PT. Gudang Garam Tbk

2019 ◽  
Vol 3 (1) ◽  
pp. 43-48
Author(s):  
Sayekti Suindah Dwiningwarni ◽  
Judi Suharsono ◽  
Dian Yuliana Safitri
Keyword(s):  
Financial Performance ◽  
Descriptive Analysis ◽  
Company Performance ◽  
Quantitative Descriptive Analysis ◽  
Financial Condition ◽  
Short And Long Term ◽  
Quantitative Descriptive ◽  
Solvency Ratio ◽  
Profitability Ratios

The motivation of this research is research (Rosini & Gunawan 2018; B.Batchimeg 2017). In addition, the motivation of this study also continued the research of Sayekti Suindyah Dwiningwarni (1997). The purpose of this study (1) to analyze the development of corporate financial performance from solvency and profitability ratios; (2) to analyze the measurement of the company's financial performance using solvency and profitability ratios. This research uses quantitative descriptive analysis method.The results of the study (1) the development of the company's financial performance in terms of solvency ratios experienced good development, this is indicated by the value of the solvency ratio that is getting better / better in fulfilling both short and long term obligations; (2) the development of the company's financial performance in terms of profitability ratios from experiencing good development, this is indicated by the value of the profitability ratio that is getting better / better in generating profits or profits; (3) measurement of company performance in terms of solvency ratio shows solvable conditions, meaning the assets is greater than the debt. (4) measurement of company performance in terms of profitability ratios shows good conditions, meaning the level of profits obtained from year to year has increased. This means that the company is in good financial condition and sovabel.

scholarly journals The Impact of Investment Decision and Funding on Financial Performance and Firm Value

2019 ◽  
Vol 8 (2) ◽  
pp. 103
Author(s):  
Hadi Santoso
Keyword(s):  
Data Analysis ◽  
Financial Performance ◽  
Firm Value ◽  
Stock Exchange ◽  
Investment Decision ◽  
Investment Decisions ◽  
The Right ◽  
The Impact ◽  
Selection Of

Managers who are responsible for the management of companies are faced with two important decisions - investment and funding. The right investment decisions and choice of funding sources are important because they affect the company's financial performance. The selection of the types of assets to be invested and the right types of financing sources result in optimal returns for the company. It reflects good company performance and future prospects. In addition, optimal return is a good sign for investors. Companies that perform well experience increase in the value of their firm. This study examined the effect of investment decisions and the selection of appropriate sources of funds on the performance of the company and the consequent impact on the firm value. The study was conducted in two parts. The first part examined the effect of investment decisions on long-term assets with long-term funding on the rate of return and firm value. The second part examined the effect of investment decisions on the company's short-term assets and funding for financial performance and firm value. The case study used in this research is a consumer goods sub-sector company listed on the Indonesia Stock Exchange in the period 2010 to 2017. Path analysis is the data analysis tools that was used. The results of data analysis showed that the asset structure has an effect on financial performance and firm value. The capital structure affects the financial performance but does not affect the firm value of the company. Financial performance was measured by ROI.

scholarly journals Kinerja Perusahaan Tekstil dan Garment

2020 ◽  
Vol 21 (01) ◽  
Author(s):  
Darmanto Darmanto ◽  
Kun Ismawati
Keyword(s):  
Capital Structure ◽  
Financial Performance ◽  
Stock Exchange ◽  
Secondary Data ◽  
Company Performance ◽  
Analysis Technique ◽  
Equity Ratio ◽  
Quantitative Case Study

ABSTRACT: Bussiness competition in the textile and garment industry is now increasingly high, need to be managed properly, especially it’s financial performance. This study aims to determine the effect of capital structure on financial performance on textile and garment companies listed on the Indonesia Stock Exchange in 2016-2018 both partially and simultaneously. Capital structure is measured by Debt to Asset Ratio (DAR) (X1), Debt to Equity Ratio (DER) (X2), and Long term Debt to Equity Ratio (LtDER)(X3). Company performance is measured by Return on Investment (ROI) (Y). This research is a quantitative case study. Secondary data obtained from the annual financial statetments. The population of the research are 21 companies. The number of samples in this study were 8 companies. The analysis technique used is multiple regression to test the effect of independent variables on the dependent variable. The results showed that partially DAR and DER variables significantly influence the ROI, while the LtDER variable has no significant effect on ROI. All three variables have a significant effect on ROI simultaneousl.

scholarly journals The Effect of Leverage and Debt Maturity on the Corporate Financial Performance: Evidence from Non Financial Firms Listed at Pakistan Stock Exchange

2021 ◽  
Vol 3 (1) ◽  
pp. 35-47
Author(s):  
Naveed Khan ◽  
Hamid Ullah ◽  
Mustafa Afeef
Keyword(s):  
Financial Performance ◽  
Stock Exchange ◽  
Debt Maturity ◽  
Corporate Financial Performance ◽  
Current Ratio ◽  
Financial Firms ◽  
Insignificant Effect ◽  
Sale Growth ◽  
Negative Effect

Purpose This study examined the effect of leverage, debt maturity on corporate financial performance of non-financial firms listed at the Pakistan Stock Exchange. Targeted population of this study was 100 firm listed at PSX as KSE-100 index out of which 74 non-financial firms were selected from 28 different sectors for the period of 5 years 2013 to 2017. Design/Methodology/Approach: Financial performance measured by ROA, ROE, while leverage, short term leverage, long term leverage taken as independent variables, four variables were taken as control which are size, current ratio, sale growth, tangibility. On the basis of Hausman test, results of random effect model were found appropriate. Findings: ST and LT Leverage have a negative significant and insignificant effect on financial performance (ROA) respectively, moreover long term leverage has a positive and significant but short has a negative and insignificant effect on ROE. The results of the control variables showed that size has a negative and significant effect on ROA and ROE, whereas current ratio has insignificant and negative effect on ROA, ROE. Sale growth has a positive and insignificant effect on firms ROA and ROE. Tangibility has insignificant and negative effect on financial performance. Implications/Originality/Value: This study is consistent with traditional trade-off theory and recommended that management of the non-financial firms listed at the PSX should employ minimal debt level or use an optimal level of capital structure and also to attract good management thus to improve their financial performance.

The sensitivity of corporate social performance to corporate financial performance: A “time-based” agency theory perspective

2020 ◽  
pp. 031289622091719
Author(s):  
Bum-Jin Park ◽  
Ki-Hoon Lee
Keyword(s):  
Financial Performance ◽  
Agency Theory ◽  
Corporate Social Performance ◽  
Social Performance ◽  
Managerial Incentives ◽  
Jel Classification ◽  
Corporate Financial Performance ◽  
Managerial Ownership ◽  
Corporate Social

This study focuses on micro-level phenomena and time issues that have been traditionally neglected in both corporate governance and corporate social responsibility research. Drawing on agency theory concerning time-based managerial incentives (i.e. short term and long term), we investigate which managerial incentives for compensation drive the sensitivity of corporate social performance ( CSP) to corporate financial performance ( CFP). Using data for publicly listed Korean firms, we found a significant and positive relationship between CSP and CFP, with this relationship strengthened in firms with high managerial ownership but insignificant in those with high earnings-based compensation. Furthermore, we found that the interaction effects of CSP and high earnings-based compensation on CFP become positive in firms with high managerial ownership, indicating that the sensitivity between CSP and CFP is driven by long-term managerial incentives. JEL Classification: M12, M14, G35

The effect of data breaches on company performance

2020 ◽  
Vol 28 (2) ◽  
pp. 275-301
Author(s):  
Ahmad H. Juma'h ◽  
Yazan Alnsour
Keyword(s):  
Financial Performance ◽  
Theory And Practice ◽  
Specific Information ◽  
Company Performance ◽  
Confounding Factors ◽  
Data Breach ◽  
Content Type ◽  
Data Breaches ◽  
Financial Variables ◽  
Overall Performance

Purpose This paper aims to analyze the effect of data breaches – whose concerns and implications can be legal, social and economic – on companies’ overall performance. Design/methodology/approach Information on data breaches was collected from online compilations, and financial data on breached companies was collected from the Mergent Online database. The financial variables used were related to profitability, liquidity, solvency and company size to analyze the financial performance of the breached companies before and after the data breach event. Nonfinancial data, such as the type and the size of the breaches, was also collected. The data was analyzed using multiple regression. Findings The results confirm that nonmandatory information related to announcements of data breaches is a signal of companies’ overall performance, as measured by profitability ratios, return on assets and return on equity. The study does not confirm a relationship between data breaches and stock market reaction when measuring quarterly changes in share prices. Research limitations/implications The main limitation of the study relates to ratio and trend analyses. Such analyses are commonly used when researching accounting information. However, they do not directly reflect the companies’ conditions and realities, and they rely on companies’ released financial reports. Another limitation concerns the confounding factors. The major confounding factors around the data breaches’ dates were identified; however, this was not enough to assure that other factors were not affecting the companies’ financial performance. Because of the nature of such events, this study needs to be replicated to include specific information about the companies using case studies. Therefore, the authors recommend replicating the research to validate the article’s findings when each industry makes more announcements available. Practical implications To remediate the risks and losses associated with data breaches, companies may use their reserved funds. Social implications Company data breach announcements signal internal deficiencies. Therefore, the affected companies become liable to their employees, customers and investors. Originality/value The paper contributes to both theory and practice in the areas of accounting finance, and information management.

Performance measurement, intellectual capital and financial sustainability

2017 ◽  
Vol 18 (3) ◽  
pp. 643-666 ◽  
Author(s):  
Ricardo Vinícius Dias Jordão ◽  
Vander Ribeiro de Almeida
Keyword(s):  
Performance Measurement ◽  
Financial Performance ◽  
Intellectual Capital ◽  
Statistical Tests ◽  
Secondary Data ◽  
Theory And Practice ◽  
Financial Sustainability ◽  
Content Type

Purpose One of the main contemporary challenges in organisations is finding ways of measuring their intellectual capital (IC), and its effects on competitiveness and financial sustainability. The purpose of this paper is to analyse the influence of IC on the long-term financial performance of Brazilian companies. Design/methodology/approach Considering that previous studies have not been able to explain the role of IC in financial sustainability (measured by long-term corporate performance), this paper attempts to fill this gap by means of a quantitative, descriptive and applied study. Based on the theories of knowledge management, accounting and finance, the authors have undertaken a study of the companies listed on the BM&FBovespa, based on secondary data, using a multi-industrial cut, over the period 2005 to 2014, using descriptive and multivariate statistics. Findings The analysis supports three major conclusions: IC influences positively the profitability and corporate return of these companies; the more intangible-intensive public companies listed on the BM&FBovespa demonstrate higher financial sustainability than the others, in terms of profitability and corporate return, either individually, globally or by industry; and that IC helps increase financial performance, systematically, over time. Research limitations/implications Contributions of the following types were sought: theoretical (increasing an understanding of the effects of IC on business performance from a long-term perspective – an understanding that is still only incipient in the management literature); and empirical (increasing an understanding of the role of IC in the differentiation of companies, in organisational profitability and on the return on applications of resources). Practical implications The original proposal for the measurement of financial performance presented in this paper proved to be valid and consistent, complementing what is known about the subject under examination, contributing to the improvement of management theory and practice and providing a competitive benchmarking process. This can make it possible for company analysts or managers to evaluate their company in relation to its industry or its market as a whole by means of such indicators, individually or combined with other quantitative or qualitative metrics. Originality/value The results of this research reduce a gap in the management and accounting literature, as they shed light on the performance measurement process. In addition to the range and depth of the statistical tests carried out, attention should be drawn to the originality of the proposal presented in this paper. This facilitates the measurement of the effects of IC on financial performance through the selection and application of specific indicators for the assessment of the contribution of IC to organisational results.

scholarly journals PENGARUH REAL MANIPULATION DALAM MEMODERASI CORPORATE ENVIRONMENTAL DISCLOSURE DAN CORPORATE FINANCIAL PERFORMANCE

2018 ◽  
Author(s):  
Kenny Ardillah
Keyword(s):  
Financial Performance ◽  
Stock Exchange ◽  
Corporate Financial Performance ◽  
Short Term ◽  
Environmental Disclosure ◽  
Long Run ◽  
Sample Data ◽  
Short And Long Term ◽  
Positive Effect

<p><em>This study aims to prove empirically the influence of real manipulation in moderating the negative corporate environmental disclosure against corporate financial performance in the short and long term. This research theory focuses on stakeholder theory.</em></p><p><em>The research sample focuses on state-owned companies listed on the Indonesia Stock Exchange in the </em>2013-2016<em> period. The criteria for selecting research samples used purposive sampling method, so that it was obtained 11 companies that became the research sample. Data were analyzed using classic assumption test, descriptive statistic, and moderated regression analysis using </em>SPSS 19.0<em>.</em></p><p><em>The results of this study are corporate environmental disclosure has a positive effect on corporate financial performance in the short term, real manipulation moderates negatively corporate environmental disclosure towards corporate financial performance in the short term, corporate environmental disclosure has no effect towards corporate financial performance in the long run, and real manipulation can not moderate corporate environmental disclosure towards corporate financial performance in the long run.</em></p><p><em> </em></p><p><em>Keywords </em>:<em> Real Manipulation, Corporate Environmental Disclosure, Corporate Financial Performance</em></p>

scholarly journals PENGARUH MODAL INTELEKTUAL TERHADAP KINERJA KEUANGAN PERUSAHAAN (STUDI EMPIRIS PADA BURSA EFEK INDONESIA)

2017 ◽  
Vol 5 (2) ◽  
Author(s):  
Helmi Herawati
Keyword(s):  
Financial Performance ◽  
Intellectual Capital ◽  
Sample Selection ◽  
Financial Statements ◽  
Positive Influence ◽  
Corporate Financial Performance ◽  
Online Database ◽  
Future Performance ◽  
Company Sector ◽  
Selection Of

Helmi Herawati; The study of intellectual capital in Indonesia originated from the emergence of PSAK No.19 which was the beginning of the development of intellectual capital. PSAK No.19. The data to be used in this study is all companies listing on the BEI using annual financial statements obtained with online database http://www.idx.co.id/. The amount of sample is as many as 397 companies listing on BEI, using the technique of sampling sampling is a type of random sample selection of information obtained by using certain considerations or with the aim to obtain a representative sample in accordance with the criteria specified. Based on the results of testing with PLS note that IC (VAIC) does not positively affect the financial performance of the company. Hence, therefore, H1 is not acceptable. From the result of PLS testing indicates that IC (VAIC) positively has no effect on future company's financial performance. Hence it means that H2 is not proven. From the result of testing of PLS present proof that there is no positive influence of ROGIC to financial performance. From result of PLS test show that IC contribution to a future performance of company there is no difference according to type of company sector. So that means H4 is rejected.ey Words: Intangible Assets, Intellectual Capital, Corporate Financial Performance.

scholarly journals The Association Between Corporate Social Responsibility And Corporate Financial Performance

2014 ◽  
Vol 8 (2) ◽  
pp. 82 ◽  
Author(s):  
Adrian Himawan Santoso ◽  
Yie Ke Feliana
Keyword(s):  
Financial Performance ◽  
Firm Size ◽  
Positive Impact ◽  
Stock Exchange ◽  
Corporate Financial Performance ◽  
Company Performance ◽  
Corporate Social Disclosure ◽  
Period 2 ◽  
Size Growth ◽  
Corporate Social

The objectives of this study is to investigate the association between CSR and Corporate Financial Performance (CFP). This study investigates 800 firms listed on Indonesian Stock Exchange in 2010 - 2012. Financial performance is measured by accounting-based approach and stock-market-based approach. While, CSR practices is measured by Corporate Social Disclosure Index (CSRDI). Thus, the association was analyzed under multivariate linear regression by considering time difference. Firm size, growth, and risk are included as control variables. This study finds: (1) CSR provides positive impact on the financial performance until one next period; (2) financial performance measured by ROA influence positively CSR only the next two years; (3) there is significant positive relationship between firm size and CSR. The paper has implications in enhancing the understanding of company performance through understanding the association between CSR and CFP. This may increase the understanding of the association between CSR and CFP. The findings of this study contribute<br />to the literature and regulator  on CSR.

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