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Introduction – The banking sector is one of the most important building blocks of the financial system. A failure in the banking sector can cause serious problems in a country’s economy. In order for countries to achieve economic growth and development goals, the banking sector, which affects all sectors significantly, needs to be strong. Countries with a robust and reliable banking system have a high credit rating. As a result of this high credit rating, the interest of foreign capital in the country increases. Thus, the credit volume of banks expands and loans are provided at a more appropriate rate for investments. In this respect, the performance and profitability of banks are important. The CAMELS performance model is a valuation system used to determine the general status of banks. The CAMELS model consists of six components. According to this, C represents capital adequacy; A, asset quality; M, management adequacy; E, earnings; L, liquidity; and S, sensitivity to market risks.

Purpose – The purpose of this study is to demonstrate the effect of the CAMLS variables on the variable E.

Methodology – In the implementation part of the study, the data of 11 banks in the BIST Bank Index between 2004 and 2018 were used. In the analysis part of the study, a panel data analysis method was used.

Findings – The capital adequacy (C), management adequacy (M) and liquidity (L) variables were effective on profitability. This study revealed the importance of the capital, management and liquidity variables, which are internal factors, in increasing the profitability of banks.

This study aims to determine the impact of liquidity and financial leverage on the profitability, using a sample of 40 selected publicly quoted companies in the textile sector of the Pakistani economy.

Through quantitative approach, pooled panel regression and descriptive statistics models are used by taking annual data of Pakistan’s textile sectors from 2006 to 2016. Secondary data has been gathered from financial statements of the firms.

The results revealed that there is a positive relationship between liquidity and profitability and negative relationship between financial leverage and profitability. The results for liquidity measure CR revealed positive strong impact on ROA and the financial leverage measure D_E ratio showed negative but not strong impact on ROA. The other part of result concluded that there is a positive strong impact of C_R on ROE too and D_E has a negative impact on ROE.

The results are showing the impact among these ratios for the textile sector of Pakistan only.

This study can help higher management of textile firms firm in decision-making stating clearly about how to perform well to enhance financial health of company, which can encourage investors to invest in companies having sound market standing.

This study takes the latest empirical data with different analysis technique.

Changes in food retailing (globalization, concentration) have negative impacts on smaller, “traditional” food retail businesses. Their market share decreasing year by year. The purpose of this study is to examine and compare the financial performances of these businesses under the given circumstances and current economic environment in a Hungarian and a Romanian county.

The study is based on two complete databases, including all companies that behoove retail food activity (considering the NACE cod) in the counties of Hajdu-Bihar (Hungary) and Cluj (Romania). The database analyzed contains the financial statements for five consecutive years for 212 and 690 businesses. Databases were examined by the most typical financial indicators using the multivariate and univariate analysis of variance and the k-medoid cluster analysis methods.

The results of the analysis have shown that there are differences in the number of retail food companies in the case of two counties, both in number and in financial performance. Companies in Hajdú-Bihar county perform better in terms of financial ratios than those in Cluj county. The groups created by k-medoids cluster analysis are relatively well distinguished in the case of Hajdú-Bihar county, while the picture is much more mixed in the case of Kolozs county. However, it is also important to note that the companies analyzed should generally perform better to survive.

Among the limitations of the study, it is important to note that the findings are relevant only to the two counties examined. Another limiting factor is that quite several companies had to be excluded from the analysis due to missing data or outliers.

The study presents for the corporate decision-makers the current performance of the companies of the sector examined in the two counties. The results of the study highlight the business areas of concern in management. The findings show that they need to change this performance to strengthen their market position. We believe that it is not enough to complain about the expansion of the supermarket chains, but they should take appropriate actions to improve their situation. Based on the results of the study, it can be concluded that there is a need to improve the financial efficiency of retail food companies in both counties to survive in the long run. This improvement is essential because retailers can play an important role in smaller settlements and narrower residential environments.

Comparative analysis of retail food companies in similar counties in these two neighboring countries has not been conducted using complex financial analysis. The study revealed the common and/or individual characteristics of these companies.

The purpose of this paper is to examine the factors affecting profitability in Malaysian-listed companies. It has been argued that profitability is the main pillar for any company to survive in the long run. Although profitability is the primary goal of all business ventures, scant attention has been paid to the factors that affect profitability in developing countries. This study investigates the factors affecting profitability in Malaysian-listed companies.

This research is based on five independent variables that were empirically examined for their relationship with profitability. These variables are: firm size (as measured by total sales), working capital (WC), company efficiency (assets turnover ratio), liquidity (current ratio) and leverage (debt equity ratio and leverage ratio). Data of 120 companies listed on Bursa Malaysia covering the period from 2012 to 2014 were extracted from companies’ annual reports. Pooled ordinary least squares regression and fixed-effects were used to analyze the data.

The findings show a strong positive relationship between firm size (total sales), WC, company efficiency (assets turnover ratio) and profitability. The results also show a negative relationship between both debt equity ratio and leverage ratio and profitability. Liquidity (current ratio) has no significant relationship with profitability.

Due to the time limitation, the data includes only 120 companies listed in bursa Malaysia and covers the period from 2012 to 2014.

These results benefit internal users (such as mangers, shareholders and employees). They can realize the determinants of enhancing the profitability of their company after the depreciation of the Malaysian currency and therefore concentrate more on the factors that enhance their companies’ profitability. On the other side, other external users (such as investors, creditors, new established companies, tax authority) also may get advantages of these results. It is clear that those users concern about the profitability of companies and the determinants of their profitability after the currency’s depreciation.

This study differs than previous studies in many ways: first, it focuses on non-financial listed companies in Malaysia. Previous studies have concentrated on companies in the financial sector, such as banking and financial institutions or on industrial organizations. Second, this study analyzes the data in companies’ annual reports for a three-year period from 2012 to 2014. During this period, the economy in Malaysia was fluctuating due to currency depreciation. Third, the study used both return on equity and earnings per share as indicators of profitability. Fourth, the results of the study provide empirical evidence that large size firms with efficiently managed assets can improve operating income and ultimately enhance profitability. Last but not least, this study applies the resource-based theory and the trade-off theory.

The specific typology of local accommodation in Portugal has undergone a huge expansion accompanied by a proliferation in the number of firms and it is crucial that the firms associated with this boom can ensure their survival and remain in the market. The purpose of this paper is to specify an insolvency forecasting model and identify which financial indicators best contribute to forecasting insolvency in local accommodation firms.

At the methodological level, the financial data of firms in this sector were initially collected via the SABI database; then the probit model was estimated to perform the analysis of financial variables, with the aim of observing their behaviour and understanding which are crucial in predicting business insolvency.

Given the scarcity of studies in this specific typology of accommodation, the results of this paper are relevant and increase the knowledge for the sector. They also enable the identification of financial ratios that deserve greater attention from those responsible for firms in this sector, namely, profitability and liquidity ratios. In short, profitability ratios vary inversely with the probability of insolvency, so that firms with higher levels of net profitability, asset rotation or accumulated profitability have a lower probability of insolvency, with the opposite being true in terms of liquidity, where firms with higher current assets are more likely to become insolvent.

The novelty of this paper is focused on the urgent need for tourism accommodation stakeholders to prevent or anticipate insolvency and identify which financial indicators best contribute to forecasting insolvency. This research is fundamental, as many cities are considered major tourist destinations and where a high number of tourism businesses are concentrated.

Emerging market multinational companies have been vigorous in pursuing inorganic growth through cross-border acquisitions (CBAs). The fundamental studies till now have portrayed that rapid internationalization through CBAs tends to create value for these emerging market firms (EMFs) in the short term. However, there is an ambiguity about whether these firms endure better performance in the long term. The purpose of this study is to assess the long-term (ex-post) financial and operating performance of EMFs involved in overseas acquisitions before the COVID-19 pandemic hit the world economy.

CBAs completed by Indian and Chinese companies constitute the sample of the study. The performance has been analysed during the pre-COVID period spanning 17 years from 2001 to 2017. A comprehensive set of 14 financial ratios has been used to represent change (improvement/decline) in enterprises’ post-acquisition operating performance; these ratios have been divided into four broad groups: profitability, efficiency, solvency and liquidity ratios.

The performance of Indian companies has deteriorated significantly after the acquisition. However, there has been no change (deterioration/improvement), subsequent to CBAs, in the profitability of Chinese firms.

The findings of the study support that firms from emerging economies exploit CBAs as a “springboard” to obtain strategic assets including intangible resources and brands rather than to achieve synergies through economies of scale and scope. Apparently, outbound acquisitions by emerging economy firms are not driven by cost-reduction or revenue-generation activities.

None of the studies, to the best knowledge of the authors, has carried out performance analysis using a comprehensive set of financial ratios. The comparative study of two emerging economies is another valuable addition to the existing literature. The study holds the potential to serve as the benchmark to assess the performance of CBAs executed after COVID-19.

The purpose of this study is to examine determinants of profitability of non-financial firms listed small- and medium-sized enterprises (SMEs) in the UK from 2012 till 2020. It has been argued that profitability plays a key role in economic development and growth. Despite the important role that SMEs play in developed economies like UK, academic research into SMEs profitability determinants in developed countries is not extensive.

The methodologies used include dynamic panel data estimation techniques. Relationship of nine independent variables with profitability was examined. Two models are created using return on assets (ROA) and return on equity (ROE) as dependent variables. Size, age, efficiency, working capital, liquidity, leverage and volatility of the firm represent firm-specific independent variables. Two macroeconomic variables, namely, gross domestic product and inflation are also used as independent variables. Data obtained from Thomson Reuters Data Stream for 93 listed SMEs companies in the UK from 2012 to 2020. Fixed effects, random effects and generalized method of moments were used in data analysis.

All variables showed significant influence on profitability, except liquidity reflecting insignificant impact on profitability in two regression models conducted for 93 firms under study. Efficiency, liquidity and leverage are the only three independent variables with similar impact on both ROA and ROE.

Identifying determinants of profitability will help stakeholders and corporate executive make sound decisions to ensure sustainability and stability at the firm level. This is particularly important given the key role played by SMEs in economic development and growth. The findings of this study would help direct financial management practices to ensure a favorable sustainable organizational performance.

This study differs from previous studies that focused mainly on developing countries; with limited research conducted on profitability of SMEs in developed economies. To the best of the author’s knowledge, this is the first study to examine factors influencing profitability of SMEs in UK. Previous studies concentrated on service sector like insurance and hotel firms.

Rural and community banks (RCBs) provide financial services to small enterprises in rural and sub-urban areas. The purpose of this paper is to examine their financial performance through a case-specific evaluation of a small bank situated in the northern part of Ghana.

The authors employed a triangulation method comprising relative ratio analysis, bivariate and generalized method of moments (GMM) techniques for the evaluation of the audited annual financial statements of the bank covering a period of 15 years.

The relative ratio analysis show that the bank's financial performance has generally been above the average of the rural banking industry. The bivariate analysis indicates that although the loans portfolio is positive, it is not properly fitted. That is, some of its loan portfolio deviates from the path of expectation. The GMM analysis indicates that its financial performance is significantly influenced by liquidity management, bank capital and size which have enhanced its expansion and intermediation to rural households and microenterprises. However, an increase in the government treasury bill rate has a declining effect on the bank’s profitability.

The findings have significant policy implications for the management and supervision of RCBs. RCBs should deal with the spillover effects of the banking and MFIs’ crisis by educating and re-assuring their customers of their financial integrity. Most importantly, they differentiate their services from the other financial institutions within the space of the rural financial architecture.

Majority of research into this area has focused heavily on large commercial banks. This research adds value to the literature by re-focusing the searchlight on the financial performance of small banks.

At the end of this session, learners should be able to:

• Understand why interpretation of financial statements is necessary.

• Calculate accounting ratios for profitability, liquidity, efficiency, capital structure and investors.

• Utilise ratio analysis to critically appraise an organisation’s published financial statements.

• Explain the limitations of ratio analysis.

Understand why interpretation of financial statements is necessary.

Calculate accounting ratios for profitability, liquidity, efficiency, capital structure and investors.

Utilise ratio analysis to critically appraise an organisation’s published financial statements.

Explain the limitations of ratio analysis.

This paper examines the performance of smallholder rice farms established using improved planting technologies – broadcasting, dibbling and transplanting – under different production systems – rain-fed and irrigation – in Ghana.

Using recent cross-sectional data of 200 smallholder rice farmers from the upper east region of Ghana, this study employed multinomial logit model and descriptive and inferential statistics for the analysis.

The results revealed that rice production under irrigation system contributes significantly to increasing farm productivity and profitability. Rice farmers who adopted dibbling and transplanting technologies under both irrigation and rain-fed production system obtained higher productivity and profitability than those who used broadcasting technology. Adoption of improved rice planting technologies by smallholder farmers is significantly influenced by education, farm size, improved rice varieties, sales outlets, hired labour and percentage of paddy sold.

The sample size is relatively small, even though findings are still very important in terms of policy formulation for improved smallholder farm performance in a developing country like Ghana.

This study calls for collaborative efforts by government, donor agencies and NGOs to establish irrigation facilities and/or expand existing ones, increase sensitization and dissemination of improved planting technologies, as well as intensify the input subsidy programme in Ghana.

To the best of the authors knowledge, this is the first study that focuses on farmers' choice of rice planting technologies under irrigation and rain-fed production systems, and how these technologies impact on smallholder farm performance in Ghana.