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Article
Publication date: 1 December 2022

Zun Yuan Wong, Suhal Kusairi and Zairihan Abdul Halim

The persistent increase in household indebtedness is an alarming issue that is becoming a major concern for economists and governments in developing nations. Although…

Abstract

Purpose

The persistent increase in household indebtedness is an alarming issue that is becoming a major concern for economists and governments in developing nations. Although household consumption is an essential source of economic growth, households’ failure to meet their financial obligations will be one of the causes of economic problems if the increase in consumption is largely financed by household borrowing. Therefore, this study aims to analyse the nexus between households’ indebtedness and consumption and the roles of household characteristics.

Design/methodology/approach

This study uses a microdata set of the Household Expenditure and Income Survey in 2019, which contained a simple random sampling of 4,730 households.

Findings

Using a simultaneous equations model, our results show a negative nexus between households’ consumption and their indebtedness. We find that household savings and size have an indirect impact on the debt service ratio, while the assets and total debt repayment instalments indirectly influence household consumption. We also identify differences in the relationship between the gender of the household head, rural and urban locations and income groups in consumption and indebtedness.

Research limitations/implications

The implication of this study is that governments should adopt several programmes to increase the awareness of household financial and debt management, especially for those in the low-income group.

Originality/value

This study contributes to the empirical literature by establishing a microeconomic perspective of consumption and an indebtedness model focusing on the differences in household characteristics in explaining consumption and indebtedness.

Details

International Journal of Development Issues, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1446-8956

Keywords

Article
Publication date: 19 May 2021

Batuhan Özakın, Bilal Çolak and Naci Kurgan

The last stage of the cold rolling process is skin-pass rolling and one of its most significant goals is to obtain appropriate topography on the surface of the sheet steel…

Abstract

Purpose

The last stage of the cold rolling process is skin-pass rolling and one of its most significant goals is to obtain appropriate topography on the surface of the sheet steel used extensively such as in automotive industry. The purpose of this paper is to investigate the effect of thickness change and various reduction ratios on roughness transfer of DC04 grade sheet material.

Design/methodology/approach

DC04 grade sheet materials with different reduction ratios and several thicknesses were subjected to skin-pass rolling process in the rolling equipment with a two-high roll. Some roughness parameters were determined as a result of roughness measurements from the surfaces of roughened sheet materials.

Findings

While the roughness transfer is higher in 1-mm thick material in reduction ratios up to 430 micrometers; in reduction ratios above 430 micrometers, it is higher for 1.5-mm thick materials. As the reduction ratio increases in DC04 grade sheet materials, the homogeneity of the roughness distribution in 1-mm thickness sheet material deteriorates, while the roughness distribution in 1.5-mm thickness sheet material is more homogeneous.

Originality/value

This paper demonstrates how material thickness and reduction ratio affect the roughness transfer in skin-pass rolling. The results obtained can be used by optimizing in manufacturing processes.

Details

Industrial Lubrication and Tribology, vol. 73 no. 4
Type: Research Article
ISSN: 0036-8792

Keywords

Article
Publication date: 6 October 2022

Filipe Sardo, Zélia Serrasqueiro, Elisabete Vieira and Manuel Rocha Armada

This study seeks to analyse if the adjustment towards the target short-term debt ratio of small and medium-sized firms (SMEs) is related to financial distress risk.

Abstract

Purpose

This study seeks to analyse if the adjustment towards the target short-term debt ratio of small and medium-sized firms (SMEs) is related to financial distress risk.

Design/methodology/approach

Data obtained for a sample of Portuguese manufacturing SMEs from 2010 to 2017 were analysed using the system-generalised method of moments (GMM-sys). Using the modified Z-Altman score, the authors classify SMEs according to their exposure to financial distress risk.

Findings

Manufacturing SMEs exposed to a high risk of financial distress rebalance their short-term debt ratio quicker. However, regardless of the financial distress risk level, SMEs distant from the target short-term debt ratio adjust more slowly, suggesting that transaction costs are greater than financial distress costs.

Practical implications

Policymakers should promote the access to external sources of finance with low transaction costs for SMEs, exposed to low levels of financial distress risk, to rebalance their short-term debt ratios quicker. Distressed SMEs far from their target short-term debt ratios, but with capacity to rebalance, need government programmes to access finance with low transaction costs to rebalance their short-term debt ratios.

Originality/value

This paper contributes to deepening our understanding of how SMEs, facing financial risk, rebalance their short-term debt ratios. SMEs, facing high financial distress risk, adjust towards their target short-term debt ratios more rapidly. However, SMEs, distant from the target short-term debt ratio face higher transaction costs than financial distress costs. These firms adjust towards their target short-term debt ratios more slowly, which may aggravate the refinancing risk and, ultimately, announce bankruptcy.

Details

The Journal of Risk Finance, vol. 23 no. 5
Type: Research Article
ISSN: 1526-5943

Keywords

Article
Publication date: 13 October 2022

Pablo Durán Santomil, Pablo Crisanto Lombardero Fernández and Luis Otero González

The purpose of this study is to evaluate whether the classification of the equity mutual fund depends on the performance measure used.

Abstract

Purpose

The purpose of this study is to evaluate whether the classification of the equity mutual fund depends on the performance measure used.

Design/methodology/approach

The sample for this study includes stock mutual funds for the USA, Europe and emerging market economies covering the period 2010 to 2020. Using more than 20 performance measures the results are compared using the Sharpe ratio as the reference.

Findings

The results show that performance measures based on absolute reward–risk ratios like Sortino, Treynor, etc. have similar rankings, because in general the numerator (mean excess return) is the same. However, when the authors employ other types of performance measures, results may be significantly different, especially in the case of metrics for “incremental returns”, i.e. alphas. Focussing on markets, their results show that choosing performance measures is more relevant for emerging markets.

Research limitations/implications

The sample is only limited to the USA, Europe and the emerging market, and there are other performance metrics in the literature which have not been covered in this work.

Practical implications

The ordering of equity mutual funds depends on the measure used, specially if investors employ factor models to measure excess returns (alphas). Hence, policy formulation on disclosure of mutual fund performance should encourage the use of several metrics from different families. Investors must be aware of the different rankings made and the most appropriate metrics based on their preferences.

Originality/value

This paper focusses specifically on the effect that performance metrics have on relative fund performance. Previous studies have ignored alpha metrics to rank funds, which are commonly employed by investors. The authors’ study performs an analysis for three different markets considering the two main developed ones (the American and European equity markets), as well as the emerging one, largely ignored until now.

Details

International Journal of Emerging Markets, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1746-8809

Keywords

Open Access
Article
Publication date: 7 October 2022

Hüseyin Emre Ilgın

To date, there are no studies in the literature that provide a comprehensive understanding of the interrelationships between the slenderness ratio and the main design…

Abstract

Purpose

To date, there are no studies in the literature that provide a comprehensive understanding of the interrelationships between the slenderness ratio and the main design criteria in supertall towers (=300 m). In this paper, this important issue was explored using detailed data collected from 75 cases.

Design/methodology/approach

This paper was carried out with a comprehensive literature review including the database of the Council on Tall Buildings and Urban Habitat(CTBUH) (CTBUH, 2022), peer-reviewed journals, MSc theses and PhD dissertations, conference proceedings, fact sheets, architectural and structural magazines and other Internet sources. In this study, the case study method was also used to gather and consolidate information about supertall towers to analyze the interrelationships. Cases were 75 supertall buildings in various countries [44 from Asia (37 from China), 16 from the Middle East (6 from Dubai, the United Arab Emirates), 11 from the United States of America and 3 from Russia, 1 from the UK].

Findings

The paper's findings highlighted as follows: (1) for buildings in the height range of 300–399 m, the slenderness ratio was usually between 7 and 7.9 and megatall towers were frequently built at a slenderness ratio of 10–15; (2) the median slenderness ratio of buildings in the 400–599 m height ranges was around 8.6; (3) a trend towards supertall slender buildings (=8) was observed in Asia, the Middle East and North America; (4) residential, office and mixed-use towers had a median slenderness ratio of over 7.5; (5) all building forms were utilized in the construction of slender towers (>8); (6) the medium slenderness ratio was around 8 for supertall buildings constructed with outriggered frame and tube systems; (7) especially concrete towers reached values pushing the limits of slenderness (>10) and (8) since the number of some supertall building groups (e.g. steel towers) was not sufficient, establishing a scientific relationship between aspect ratio and related design criteria was not possible.

Originality/value

To date, there are no studies in the literature that provide a comprehensive understanding of the interrelationships between the slenderness ratio and the main design criteria in supertall towers (=300 m). This important issue was explored using detailed data collected from 75 cases.

Details

International Journal of Building Pathology and Adaptation, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 2398-4708

Keywords

Article
Publication date: 1 January 1975

M.G. Wright

Why Ratios? The need for ratios rests upon the fact that absolute figures by themselves tell one very little about the performance of an organisation. The fact that a…

Abstract

Why Ratios? The need for ratios rests upon the fact that absolute figures by themselves tell one very little about the performance of an organisation. The fact that a company made £1 million pre‐tax profit in its last financial year is no indication of its performance. If it had to deploy £1,000 millions of funds to achieve that profit then its performance was abysmally low. If it only employed £2 millions its performance was very good. In one sense then ratio analysis is concerned with expressing relationships between inputs and outputs, such as the capital required to support an activity and the profit earned from that activity; the sales achieved per square foot of sales space occupied; the cost per ton‐mile of delivering goods; and the way in which these different aspects relate to each other and to overall performance. In another sense they are concerned with relationships between aspects of a business which are crucial for its success, e.g. the relationship between short‐term assets and short term liabilities because it reflects the ability of the business to meet its obligations to creditors.

Details

Managerial Finance, vol. 1 no. 1
Type: Research Article
ISSN: 0307-4358

Article
Publication date: 1 January 1994

Hamdi F. Ali and Abdelrazzak Charbaji

The application of factor analysis to the area of financial ratio analysis was pioneered by Pinches, Mingo, and Caruthers (1973) in a study of U.S. industrial firms…

1033

Abstract

The application of factor analysis to the area of financial ratio analysis was pioneered by Pinches, Mingo, and Caruthers (1973) in a study of U.S. industrial firms. During the last two decades numerous studies have applied the technique as a means of eliminating redundancy among financial ratios and/or reducing the number of ratios selected as a basis for further investigation to a limited but crucial subset. It is observed that all studies reported were on the manufacturing and retailing sectors. The international commercial airline sector was chosen as the subject of the present research in an attempt to study the factor groupings in a sector whose financial characteristics differ from manufacturing or retailing. Results show that factor categorization reflects the sector's financial characteristics. The study also draws conclusions on some observed differences between the empirical and theoretical ratio classification observed in the literature. The study lends support to the conclusion that factor analysis provides a useful means by which to develop and test the theoretical structure and grouping of financial ratios.

Details

International Journal of Commerce and Management, vol. 4 no. 1/2
Type: Research Article
ISSN: 1056-9219

Article
Publication date: 1 February 1998

Minwir Al‐Shammari and Anwar Salimi

This paper seeks to model and evaluate the comparative operating efficiency of banks using a non‐parametric methodology known as the data envelopment analysis (DEA). The…

2393

Abstract

This paper seeks to model and evaluate the comparative operating efficiency of banks using a non‐parametric methodology known as the data envelopment analysis (DEA). The paper adopts a modified version of DEA in which no inputs are specified. The only variables considered are the financial ratios. The results obtained suggest that the majority of banks investigated are fairly inefficient over the period 1991‐94. In addition to calculating efficiency scores for all banks in the sample, the study results revealed the composite reference set and their shadow prices, major determinants of banks’ relative performance, and the target financial ratios.

Details

Logistics Information Management, vol. 11 no. 1
Type: Research Article
ISSN: 0957-6053

Keywords

Abstract

Details

Managerial Finance, vol. 31 no. 2
Type: Research Article
ISSN: 0307-4358

Keywords

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…

5287

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

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