Search results

1 – 10 of over 46000
Click here to view access options
Article
Publication date: 27 July 2012

Bruce L. Ahrendsen and Ani L. Katchova

The purpose of this research is to evaluate the financial performance measures calculated and reported by the Economic Resource Service (ERS) from Agricultural Resource…

Downloads
3852

Abstract

Purpose

The purpose of this research is to evaluate the financial performance measures calculated and reported by the Economic Resource Service (ERS) from Agricultural Resource Management Survey (ARMS) data. The evaluation includes the calculation method and the underlying assumptions used in obtaining the reported values. Recommendations for improving the information reported are proposed to ERS.

Design/methodology/approach

The financial measures calculated and reported are compared with those recommended by the Farm Financial Standards Council (FFSC). The underlying assumptions are identified by analyzing the software code used in calculating the values reported. The values reported by ERS are duplicated and alternative methods for calculating the financial performance measures are considered. The values obtained from the various calculation methods are compared and contrasted.

Findings

Recommendations for ERS include: calculate and report the financial measures recommended by FFSC, note values that are imputed, periodically update and validate assumptions used in calculating imputed values, review its policy for flagging estimates as statistically unreliable, report medians and other select percentiles, and consider reporting the percent of farm businesses that have values within critical zones.

Originality/value

A total of four methods for calculating financial performance measures are compared and contrasted. These are the aggregate mean, sample mean, sample median, and percentage of farm businesses with values in critical zones.

Details

Agricultural Finance Review, vol. 72 no. 2
Type: Research Article
ISSN: 0002-1466

Keywords

Click here to view access options
Article
Publication date: 14 April 2014

Halimahton Borhan, Rozita Naina Mohamed and Nurnafisah Azmi

The purpose of this paper is to examine the impact of financial ratios on the financial performance of a chemical company: LyondellBasell Industries (LYB). Some selected…

Downloads
4695

Abstract

Purpose

The purpose of this paper is to examine the impact of financial ratios on the financial performance of a chemical company: LyondellBasell Industries (LYB). Some selected ratios: current ratio (CR) and quick ratio (QR) represent the liquidity ratios, debt ratio (DR) and debt equity ratio (DTER) represent the leverage ratios, while operating profit margin (OPM) and net profit margin (NPM) represent the profitability ratios. LYB faced financial problems after its merger and the financial performance of the company shrank to negative due to the world financial crisis. However, this company has bounced back after a year and is now the world's third largest chemical company based on revenue.

Design/methodology/approach

The financial ratios were measured from 2004 to 2011, quarterly. A multiple regression model has been used and secondary data has been analyzed.

Findings

The results shows that CR, QR, DR and NPM have a positive relationship while DTER and OPM have a negative relationship with the company's financial performance. Among the six ratios, CR, DR and NPM show the highest significant impact on the company's performance.

Originality/value

This research paper contributed the result of the impact of financial ratios on the financial performance of a chemical company as the previous studies with this focus are hard to find and some of the sources are not specifically related to the topic.

Details

World Journal of Entrepreneurship, Management and Sustainable Development, vol. 10 no. 2
Type: Research Article
ISSN: 2042-5961

Keywords

Click here to view access options
Article
Publication date: 15 February 2013

Carolin Schellhorn and Rajneesh Sharma

The purpose of this paper is to evaluate firm financial success across a broad range of performance measures and identify areas of the performance spectrum for which…

Downloads
952

Abstract

Purpose

The purpose of this paper is to evaluate firm financial success across a broad range of performance measures and identify areas of the performance spectrum for which positive results were most difficult to achieve. Simultaneously, the authors identify the firms that most frequently ranked among the top five in terms of composite financial performance.

Design/methodology/approach

The dichotomous Rasch model was applied to 13 financial ratios for two industries for the years 2002‐2011. Of these ratios, the authors identify those that are consistent with the requirements of the Rasch model and suitable for ranking composite firm financial performance in each industry during the sample years. Ratio difficulty rankings are obtained, along with firm rankings reflecting managers' ability to achieve broad‐based financial success.

Findings

For the Foods and Aerospace/Defense industries during 2002‐2011, above average performance was most difficult to achieve in the areas of liquidity, financial leverage, and market valuation. Above average profitability and returns on investment seem to have been easier performance targets during this sample period. The authors also list the ticker symbols of firms with managers who consistently achieved top overall financial performance.

Research limitations/implications

The performance data for each industry and time period have to fit the requirements of the Rasch model. In addition, it must be possible to translate continuous metric readings into binary measures without losing relevant information. Future research might explore the use of more sophisticated Rasch models, measures of non‐financial firm performance dimensions, additional industries and time periods.

Practical implications

This research offers managers, investors and regulators a fresh perspective on the evaluation of firm financial performance and managerial ability.

Social implications

Rasch models are widely used in the human sciences. Application of this methodology to firms offers a more comprehensive view of firm performance and may reveal factors relevant to firm valuation that have previously been ignored, thus possibly impacting the allocation of capital across firms and industries.

Originality/value

To the authors' knowledge, this research represents a first attempt to apply the Rasch approach to an evaluation of managerial ability as reflected in a firm's overall financial performance.

Details

Managerial Finance, vol. 39 no. 3
Type: Research Article
ISSN: 0307-4358

Keywords

Click here to view access options
Article
Publication date: 29 June 2021

Emre Çelik and Kerem Yavuz Arslanli

This paper aims to determine the specific financial ratio's effects on market value and return of assets for Turkish real estate investment trusts (REITs) traded at…

Abstract

Purpose

This paper aims to determine the specific financial ratio's effects on market value and return of assets for Turkish real estate investment trusts (REITs) traded at Istanbul Stock Exchange (ISE). The paper intends to define liquidity ratios, financial structure ratios, return ratios and stock performance ratios related to market value and return of asset.

Design/methodology/approach

The study includes 17 REITs traded in ISE. The period of study is specified as the year from 2009 to 2018. Panel data analysis is applied in this study. Dependent variables are current market value and return of assets, independent variables are 12 financial ratios, which are considered to explain the model significantly. These ratios will be calculated from audited year-end balance sheets for specific periods throughout at least ten years as time series. Two different models and hypotheses have been established to identify the financial ratios that affect the market value and return of assets for REITs.

Findings

According to the results, long-term financial loans/total assets, return of equity and working capital ratio are negatively correlated with market value, while market value/book value and total assets are correlated positively. On the other hand, market value/book value ratio, price/earning ratio, long-term financial loans/total assets and earnings per share are correlated with return of assets. REITs have high levels of financial leverage, especially in foreign currency. The striking point is that REITs hardly ever do not use financial derivatives to hedge their position again currency and interest rate risk. This approach makes the financial structures of REITs vulnerable and fragile against market volatility.

Originality/value

In Turkey, as an example of an emerging market, financial borrowing does not increase the return rates and market value for REITs due to market's idiosyncratic properties. This finding provides substantial insight into how the debt and equity allocation of Turkish REITs should be structured. Also, it has been observed that forward-looking expectations are considered more than the current situation in the market.

Details

Journal of European Real Estate Research, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1753-9269

Keywords

Content available
Article
Publication date: 14 May 2021

Lan Thi Mai Nguyen and Phi Hoang Dinh

The authors investigate whether firms can ensure their financial stability during the coronavirus disease 2019 (COVID-19) pandemic by having ex-ante risk management.

Abstract

Purpose

The authors investigate whether firms can ensure their financial stability during the coronavirus disease 2019 (COVID-19) pandemic by having ex-ante risk management.

Design/methodology/approach

The authors study 279 Vietnamese listed firms by investigating their disclosure of risk awareness and risk management tool(s) in the 2019 annual reports. The authors then examine whether prior risk awareness and adoption of risk management tool(s) can enhance the firms' financial ratios during the COVID-19 pandemic.

Findings

The authors find that firms that disclose their risk management tool(s) in the 2019 annual reports have better asset utilization and higher liquidity during the COVID-19 pandemic than the others. However, firms that simply express their risk awareness exert no stronger financial stability. In addition, the authors document that debt management is the most popular and most effective tool to ensure firms' financial stability during the crisis.

Originality/value

The study highlights the need for ex-ante risk management for future pandemics. The authors also suggest that stakeholders can rely on the degree of risk management tool utilization to evaluate the financial stability of firms.

Details

China Finance Review International, vol. 11 no. 3
Type: Research Article
ISSN: 2044-1398

Keywords

Click here to view access options
Article
Publication date: 6 April 2021

John Killingsworth, Mohammed Hashem Mehany and Jeff Kim

The apparent lag between macro-economic behavior and financial implications in the construction industry is yet to be examined. The purpose of this paper is to understand…

Abstract

Purpose

The apparent lag between macro-economic behavior and financial implications in the construction industry is yet to be examined. The purpose of this paper is to understand the nature of the lag and the relationship between economic changes from year-to-year and the impact on the financial status of construction companies.

Design/methodology/approach

Correlation was made between US economic growth and construction industry financial indicators over a 28-year period. Cumulative per cent growth in US GDP was considered an independent variable, while nine financial ratios were calculated and considered dependent variables in this study.

Findings

The results of this study found that correlation improved when considering lag of two, three or sometimes four years after the economic event. Some financial ratios proved more sensitive than others, supporting the hypothesis of this study.

Research limitations/implications

The practical application of this study for construction companies is to understand how the construction industry lag impacts financial behavior. It therefore informs managerial decisions related to solvency, liquidity, equity structure and managerial practices; all of which are measured by financial ratios.

Practical implications

This study was intended to advance the research in this area and also to serve to strengthen industry members in their financial management of construction companies. Economic dynamics have long-lasting implications, which can be addressed through an increased focus on managing financial health.

Originality/value

Though the lag is intuitively known and has been studied from market perspectives, there is a lack of empirical study evaluating the impact of lag on financial key performance indicators.

Details

Journal of Financial Management of Property and Construction , vol. 26 no. 2
Type: Research Article
ISSN: 1366-4387

Keywords

Click here to view access options
Article
Publication date: 26 April 2013

Chunhui (Maggie) Liu, Grace O'Farrell, Kwok‐Kee Wei and Lee J. Yao

Firms in different countries operate in different business environments and prepare financial statements following, by necessity, their own countries' accounting…

Downloads
2612

Abstract

Purpose

Firms in different countries operate in different business environments and prepare financial statements following, by necessity, their own countries' accounting standards. Benchmarks for assessing financial ratios of firms in different countries are likely to be different. In conducting financial ratio analyses, each country's unique cultural, business, financial, and regulatory characteristics have to be taken into consideration, for these external factors may exert significant effects on measurements of financial data. This study aims to investigate challenges in comparing financial ratios between Japanese firms and Chinese firms.

Design/methodology/approach

This study compares ten major financial ratios of 75 Chinese firms with financial ratios of 75 matched sample Japanese firms to determine if a common benchmark for each of the financial ratios can be applied to firms in both countries.

Findings

The results show significant differences in liquidity, solvency, and activity ratios between firms from these two countries. Further examination of differences in accounting standards, economic, and institutional environments between these two countries suggests that these external factors have significant effects on financial ratios and may have contributed to the observed differences.

Originality/value

This study is among the first to investigate the comparability of ratios between Japanese firms and Chinese firms to uncover potential challenges and warn investors of such challenges.

Details

Journal of Asia Business Studies, vol. 7 no. 2
Type: Research Article
ISSN: 1558-7894

Keywords

Click here to view access options
Article
Publication date: 1 March 2015

Cleopatra Grizzle, Margaret F. Sloan and Mirae Kim

Although operating reserves can aid nonprofit organizations in alleviating periods of fiscal stress, they are not widely used. This study examines organizational factors…

Abstract

ABSTRACT

Although operating reserves can aid nonprofit organizations in alleviating periods of fiscal stress, they are not widely used. This study examines organizational factors that impact the level of operating reserves in nonprofit organizations. It also explores the relationship of operating reserves with organizational demographics and financial health variables using a six-year (1998-2003) unbalanced panel regression model containing 460,437 observations. Findings demonstrate a positive relationship between operating reserves and administration ratio, profit margin, operating margin, and organization age. Conversely, the size of operating reserves is negatively related to leverage ratio, donations, and organization size. Revenue diversification, however, shows a mixed relationship with operating reserves among different types of nonprofit indicating complexity in risk-reducing strategy. This study contributes to understanding factors relevant to the presence, or absence, of nonprofit operating reserves.

Details

Journal of Public Budgeting, Accounting & Financial Management, vol. 27 no. 1
Type: Research Article
ISSN: 1096-3367

Click here to view access options
Article
Publication date: 19 July 2013

Alison Lui

This paper compares the performance of the big four UK banks and four Australian banks between 2004‐2009. The banks are chosen according to the total assets as listed in…

Downloads
1299

Abstract

Purpose

This paper compares the performance of the big four UK banks and four Australian banks between 2004‐2009. The banks are chosen according to the total assets as listed in The Banker magazine 2009. The purpose is to analyse why UK banks were more vulnerable to the financial crisis of 2007‐2009 than Australian banks. The consequence of this study is what improvements can be made in relation to liquidity, leverage, loan to deposit, asset quality and capital ratios.

Design/methodology/approach

The author adopts an empirical approach and gathers data from the annual reports of the big four UK banks and Australian banks and the database “Factiva” and the Financial Times. The data contains liquidity, debt, capital, asset quality and profitability ratios during 2004‐2009.

Findings

The author's data show UK banks had on average higher cash ratios, higher leverage ratios, higher loan to deposit ratios, higher capital ratios, lower asset quality, lower ROA but higher ROE than the Australian banks.

Research limitations/implications

The results support the findings in the Financial Development Index 2011 of the World Economic Forum. UK banks should ameliorate its ranking on financial stability by improving the quality of loans and capital.

Practical implications

The analysis is of use to regulators who are contemplating the need for reforms aimed at improving financial ratios of banks. Basel III Accord has introduced some recommendations but has its limitations.

Originality/value

This paper's value lies in providing analysis of the top four UK and Australian banks' performances during 2004‐2009. There is room for improvement in providing a more stable financial environment in the UK.

Details

Journal of Financial Regulation and Compliance, vol. 21 no. 3
Type: Research Article
ISSN: 1358-1988

Keywords

Click here to view access options
Article
Publication date: 11 June 2018

Floriana Fusco and Guido Migliaccio

The purpose of this paper is to analyze the financial structure of Italian cooperatives in the period before and during the crisis (2004-2013), in relation to two…

Abstract

Purpose

The purpose of this paper is to analyze the financial structure of Italian cooperatives in the period before and during the crisis (2004-2013), in relation to two discriminating factors. At this end, it focuses on two research questions: What financial dynamics the Italian cooperatives have involved before, during and after the 2008 crisis, that is, in the decade 2004/2013? Are there statistically differences between business sectors and geographic area?

Design/methodology/approach

Secondary data on AIDA database have been used. The financial structure is assessed using two ratios: the financial leverage ratio and quick ratio. The final sample consists of 1,446 cooperatives. The trend and exploratory analysis, analysis of variance and Tukey-Kramer post-hoc test have been used.

Findings

The financial structure of cooperatives has not been substantially affected by the crisis in any geographic area and business sector, by virtue of resilience of their business model. Moreover, these two factors produce statistically significant differences in the financial structure of cooperatives.

Research limitations/implications

The study takes into account only the cooperatives that survived the crisis, so, presumably, the strongest. Moreover, another and more ratios should be considered at the end to have a more complete view on the financial dynamics.

Originality/value

The literature on resilience of cooperatives is still not very rich. Moreover, this work analyses and integrates aspects and approaches that are not usually considered together.

Details

EuroMed Journal of Business, vol. 13 no. 2
Type: Research Article
ISSN: 1450-2194

Keywords

1 – 10 of over 46000