Business Financial Performance Research Articles

MAXIMIZING RETURNS: UNVEILING THE IMPACT OF LIQUIDITY, EFFICIENCY, AND DIVIDEND POLICY ON ASSETS

With an emphasis on Return on Assets (ROA), this study examines the interdependent dynamics of liquidity, efficiency, and dividend policy on business financial performance. With a quantitative research design, the study seeks to clarify how these components together affect organizational effectiveness. Regression analysis is used in the study to look at the associations between the dependent variable, ROA, and the important independent variables, current assets, quick ratio, liquidity, and dividend, using data from ITC Ltd. that was obtained from Moneycontrol over a five-year period (2019–2023). The findings show a strong relationship between liquidity, efficiency, dividend policy, and return on assets (ROA), with liquidity standing out as the main factor and efficiency and dividend policy following closely behind. The results highlight how crucial these variables are in determining financial performance and provide insightful information for organizational resource allocation and strategic decision-making. The study does, however, admit certain limitations, such as the possibility of wider generalizability and the dependence on data from a single organization. Further research is recommended to increase the sample size, carry out longitudinal studies, and investigate qualitative techniques in order to gain a deeper comprehension of and identify the causal factors behind the dynamics of financial success.

How Can We Remove Psychological Entrepreneurship Barriers on Entrepreneurship Intention for Health Organizations in the Future?

Entrepreneurial orientation significantly influences business financial performance, particularly in global markets, making it pivotal across economies. Developed nations provide a conducive environment for entrepreneurship, supported by educational systems and skill development programs. Conversely, in developing countries, cultural and social disparities create unique challenges, shaping entrepreneurial intentions. Psychological barriers such as risk aversion, fear of failure, and resistance to change hinder potential entrepreneurs, particularly in health science faculties. A study conducted in Turkey aimed to explore these barriers among health science students. Data collected from 788 students revealed that psychological factors explained 72% of entrepreneurial intentions. Regression analysis confirmed the significance of risk avoidance, fear of failure, attitude towards change, and stress avoidance in shaping intentions. Despite these barriers, heightened entrepreneurial intentions among health students were associated with greater success in overcoming obstacles. The findings emphasize the importance of addressing psychological barriers in fostering innovative and entrepreneurial healthcare professionals. By understanding these dynamics, educational institutions, policymakers, and healthcare practitioners can better support the development of an entrepreneurial healthcare workforce. The intersection of healthcare and entrepreneurship presents opportunities for transformative solutions, potentially enhancing patient outcomes and advancing the healthcare sector. Despite challenges, emerging trends suggest a growing interest in leveraging innovation for positive change in healthcare, highlighting the potential for impactful contributions to the industry’s evolution.

How Tax Compliance, Audit Quality, and Financial Reporting Quality on Corporate Financial Performance in Manufacturing Companies

Within the framework of Indonesian manufacturing enterprises, this study explores the intricate links between tax compliance, audit quality, financial reporting quality, and firm financial performance. Using Structural Equation Modeling with Partial Least Squares (SEM-PLS), a sample of 175 firms was examined. The effect of these variables on financial performance was evaluated using correlation analysis, hypothesis testing, and descriptive statistics. The findings show a strong positive correlation between business financial performance, financial reporting quality, audit quality, and tax compliance. This study adds to the body of knowledge by providing complex insights specific to the Indonesian manufacturing industry. These insights can be used by investors, policy makers, regulators, and firm management to enhance decision-making procedures and promote sustainable financial practices in the sector.

Organizational innovation in the relationship between total quality management and business financial performance: case of coffee processing firms in Guji zone, Ethiopia

Organizational innovation in the relationship between total quality management and business financial performance: case of coffee processing firms in Guji zone, Ethiopia

THE EFFECT OF BIG DATA APPLICATION ON FINANCIAL PERFORMANCE: COMPANY SIZE AS A MODERATING VARIABLE

This research aims to determine the effect of implementing big dataon a company's financial performance by considering company size as a moderating factor. This research focuses on the banking sector, which is publicly traded on the IDX. The sampling technique used was purposive sampling over three years (2020-2022). 46 out of 47 companies were selected for sampling and observation. The analysis tool uses Eviews 12 to perform panel data regression. Research findings show that the use of big data has an adverse impact on the financial performance of businesses. Apart from that, the size of the company is also considered not to have the ability to mitigate the impact of the use of big data on the company's financial performance.

<p>Study on the Impact of Managerial Entrenchment and Corporate Governance of Firm Performance and Capital Structure</p>

The purpose of this paper is to identify the presence of managerial entrenchment, measure its degree, and establish its relationship to corporate governance, capital structure, and business performance. This paper focuses equal emphasis on managers' personal qualities, such as age and tenure, as well as ownership structures, such as management ownership and block holder ownership. The research also investigates entrenched managers' preference for debt issue over equity issuance, i.e., the trend and pattern of financing capital structure. This paper also examines the impact of corporate governance on business financial performance. The norms and regulations that the corporation follows for its operation are also assessed in regard to management entrenchment and capital structure. In Indian, there isn't much paper

Digitalization and Firm Performance: Empirical Evidence from Forbes-listed Companies

As the world goes digital, many companies have found that their performance improves when they digitize their operations. This is especially true in light of the COVID-19 pandemic, as companies must rely more on digital tools to survive. Our paper aims to examine the connection between digital competitiveness and the financial performance of 86 digital businesses at the country level before, during, and after the COVID-19 pandemic over the period 2017--2021. Unlike previous findings that relied on qualitative methods, our research relies on quantitative methods. More precisely, we empirically examine the impact of digital competitiveness (i.e., an index) on financial performance (i.e., measured by return on assets) through linear regression models and panel data regressions for three specific periods (2017-2019 pre-pandemic, 2020 pandemic, and 2021 post-pandemic). We found that COVID-19 allows firms to adopt digitalization. More specifically, comparing the three periods, we discovered that digital competitiveness positively influences business financial performance in the post-Covid era. Looking ahead to the post-Covid world, it is clear that companies must prioritize digital competitiveness to ensure their long-term success. Governments can learn important lessons from this research on how to help companies digitize."

Improved Governance of Business Financial Reporting in MSMEs CV Gayatex Indo

In addition, it is also to increase knowledge and skills in managing CV finances. Gayatex Indo complies with exist-ing guidelines. The method used in this community service activity is through the lesson study method using three stages, namely planning, implementation and reflection. The implementation method is manifested in mentoring, consultation and discussion activities. The result of this community service activity is to improve the knowledge and skills of partners in this case CV.Gayatex Indo in compiling and managing its business financial statements to be more effective and efficient so that it can help im-prove business financial performance and strengthen busi-ness position in the global market. By implementing good financial governance, it will make it easier for MSMEs to develop their business. For this reason, the importance of implementing financial statements is applied properly and in accordance with established regulations.

Impact of Corporate Social Responsibility on Financial Performance of Production Enterprises Listed on Ho Chi Minh Stock Exchange (Hose) – Viet Nam

Purpose: The objective of this research was to analyze the approaches related to that the impact of each aspect of social responsibility on the financial performance of businesses of production companies listed on the Ho Chi Minh City Stock Exchange in Vietnam. Theoretical framework: The Stakeholder Theory has explained and justified the need for implementing Corporate Social Responsibility (CSR) with stakeholders. Results and conclusion: The results showed that the impact of each aspect of social responsibility on the financial performance of businesses, the regression results reveal that only the environmental responsibility index has a favorable effect on the Return on Assets (ROA) of the company. However, aspects of social responsibility towards employees, the community, and customers do not affect financial performance. Research implications: The research results on the impact of corporate social responsibility on financial performance in the annual reports of production companies listed on the Ho Chi Minh City Stock Exchange in Vietnam indicate that social responsibility activities and information disclosure have a positive influence on profitability and contribute to the sustainable development of the company. Originality/value: Additionally, the results also demonstrate that company-specific factors, such as company size and financial leverage, significantly impact the company's profitability.

Impact of Organizational Culture on the Financial Performance of Listed Companies in Vietnam - A Case Study of the Logistics and Transportation - Warehouse Sector

The study utilizes data collected from annual reports to investigate factors influencing the financial performance of businesses in the transportation and warehouse sector during the period from 2019 to 2021, specifically focusing on organizational culture factors. To achieve the research objectives, various estimation methods were employed, including Ordinary Least Squares (OLS), Fixed Effects Model (FEM), and Random Effects Model (REM) regression models. Through relevant tests, the study determined that the FEM model was most suitable. Subsequently, the model's shortcomings were addressed, and adjustments were made using Feasible Generalized Least Squares (FGLS) method. Based on the estimation results, the author identified statistically significant characteristics, including the market culture and hierarchical culture, which positively influence the financial performance of companies as measured by the Return on Assets (ROA) ratio.

UMKM Empowerment through Training & Assistance in Preparing Simple Financial Statements at UMKM Adok Furniture

The implementation of community service aims to empower UMKM through training and assistance in preparing simple financial statements. This activity was carried out for UMKM actors Adok Furniture Sentul Village, Babakan Madang, on July 21 to August 23, 2023. The implementation method is socialization, training and mentoring. The result of this activity is that Adok Furniture MSME actors can understand and compile cost of goods order cards, debt cards, accounts receivable cards, cash book, raw material stock cards, income statements, statements of financial position, and notes to financial statements. Previously, UMKM actors had not prepared financial statements for their businesses. Through this training and mentoring, Adok Furniture UMKM actors can find out the right cost of goods produced and selling prices, manage accounts receivable and raw material stocks, and find out the condition of business financial performance.

Impact of Climate Risk on the Financial Performance and Financial Policies of Enterprises

In this study, The Global Climate Risk Index, a global climate risk score, along with firm-level data are used to investigate how climate risk affects corporate financial performance and financial policy in various nations. To evaluate the impact of climate risk on various parts of a firm, this study uses the capabilities of SPSS (version: 28.0.1.1(15)) to perform correlation and regression analysis between climate risk indicators and the firm’s operational data. We obtained financial information from the Bloomberg database for companies in 37 different countries from 2017 to 2021, including return on assets, cash from operations, sales growth, short-term debt, long-term debt and short- and long-term debt. This is combined with a climate risk index to analyze the impact of climate risk on companies in different countries. The financial performance of a firm is found to be adversely, but not significantly, associated with climate risk in this study using correlation and regression analysis, whereas the long-term debt of the company is found to be favorably related to climate risk. From this investigation, the following findings can be derived. A lower returns on assets is the indicator of the comparatively poor financial performance of businesses in nations with increased climate risk. Businesses in nations with greater climate risk typically retain more long-term debt. Companies in nations with lower climate risk, on the other hand, typically retain less long-term debt. Lastly, this study contributes to the understanding of how climate risk affects different countries and how climate risk affects corporate financing strategies.

The impact of financial technology and risk management practices on corporate financial system profitability: evidence from Kuwait

A vital element of the stability of banking institutions is the presence of an effective risk management system, as well as the financial stability of the corporate sector of the economy in terms of the fulfilment of assumed credit obligations. This study investigates the relationship between financial technology (Fintech) adoption, risk management practices and corporate profitability in Kuwait. The object of the study was 62 industrial enterprises registered on the stock market of Kuwait as of 2022. Methods of descriptive statistics, least squares method for estimating regression model parameters, and correlation analysis served as methodological tools of this study. This study aims to overcome the gaps in theoretical justification and empirically prove the existence of a relationship between the implementation of financial technologies and risk management methods. The results showed a positive correlation between the development of financial technologies and return on assets (correlation coefficient 0.6540), which indicates that implementing innovative financial technologies will contribute to improving the efficiency of banking institutions. The strong and positive correlation between the effectiveness of risk management and the profitability of business entities emphasizes the importance of responsible risk management practices for increasing banking institutions’ profitability. Based on the results of building a regression model, it was established that fintech has a significant impact on indicators of the return on equity of economic entities (р<0.050, t = 1.7700). The originality of this study lies in its focus on Kuwait and the Middle East as a whole and in its exploration of the relationship between corporate financial system profitability, risk management strategies and Fintech adoption. The use of innovative technologies (advanced analytics, artificial intelligence and blockchain) increases the effectiveness of risk management, which contributes to rational decision-making and a better understanding of the banking institution’s potential risks and development opportunities. This study contributes significantly to the existing literature by highlighting the relationships between financial technology innovation adoption, risk management and business financial performance in a market environment in the Middle East.

The role of real earnings management in the value relevance of accounting information in Indonesia

Purpose- One feature that should be integrated in financial statements to be relevant to decision-makers is the relevance of the information to the users. When the value and usefulness of accounting information used to gauge business financial performance are undermined by earnings management methods, problems arise. As a result, the information presented may deceive financial statement users about the corporation's financial performance. Because IFRS demands managerial judgment in the accounting process by definition, its adoption may even increase the chance for real earnings management (REM). This study aims to examine the impact of REM to the value relevance of accounting information before and after IFRS adoption. Methodology- The population was manufacturing companies listed on the IDX, with samples 230 firm year observations consists of one hundred fifteen firms year before adoption of IFRS and one hundred fifteen firms year after IFRS adoption. this study used firms’ abnormal levels of cash flows, production costs, and discretionary expenditures as proxies for real earnings management. Using a price model and panel data, the main result confirms that real-based earnings management has an impact on the value relevance of earnings and book value of equity before IFRS adoption, but has no effect after IFRS adoption. Findings- The findings revealed that prior to the adoption of IFRS, real earnings management was employed by companies that had higher earnings value relevance and lower equity book value relevance than companies that did not apply earnings management. After the adoption of IFRS, there is no significant effect of real earnings management on the value relevance of earnings and equity book value. Conclusion- The results show that investors believe that earnings are a signal from managers with the implementation of real earnings management prior to the adoption of IFRS, but after the adoption IFRS, they may not be able to do so. Keywords: Real earnings management, value relevance, accounting information, earnings, equity book value, JEL Codes: M40, M41, M49

Casino Royale: A Comparative Analysis of Financial Literacy and Locus of Control on SMEs’ Financial Behavior

Knowledge is considered as the vital factor for firms in improving their capability and stability of SMEs, especially a financial literacy knowledge. Based on the literature, this study finds that due to lack of finance literacy knowledge, most of firms in Indonesia are not able to survive inside the business world that is full of competition and the dynamics of changing within particular periods. Unfortunately, lack of financial literacy knowledge also ultimately affects firms in Indonesia, particularly their financial behavior at both the organizational and individual levels, as well a locus of control of SME owners in controlling their business’s financial management. However, effective and efficient financial management behavior based on financial literacy knowledge and locus of control skills that are proportional to the context of firms tends to be something that is often overlooked by business people. Thus, a lot of literature indicates that almost all SMEs in Indonesia do not have adequate business financial performance reports as a condition for obtaining business loans from financial institutions. Therefore, with the support of the above issues, this study then aims to conduct a comparative study, through the approach of quantitative research method, from two major cities in Indonesia to explore and identify how much financial literacy and locus of control influence financial management behavior in 130 firms, which are small and medium-sized enterprises as sample size of this study. The findings of this study theoretically discover that financial literacy affects firm’s financial management behavior in both major cities of Indonesia, which are Makassar and Surabaya. The findings of this study are also expected to contribute positively to the managerial aspects, especially in providing detailed explanations and guidelines related to financial literacy, locus of control, and financial management behavior for policy makers as well as business owners. A detail recommendation for future research is also explained in the particular section of this paper.

Pelatihan Pembuatan Laporan Keuangan Usaha Rumahan UMKM Tunas Muda Olahan Keripik dan Peyek Kec. Air Periukan Kab. Seluma Bengkulu

Financial reports are information that describes the condition of a financial company and becomes a description of the business's financial performance. It is also undeniable that the Tunas Muda MSME home business really needs financial reports because there are many uses if we make financial reports, such as easily controlling all operational costs in the Young Tunas business and being able to determine the selling price of the product and profit and loss from the Young Tunas business. This Tunas Muda MSME business plays an important role in the world of the traditional food business in Seluma Regency, therefore proper business planning is needed for the future, such as being able to recruit employees. money in the bank, to steal money in the bank, a financial recording report is needed because one of the conditions is to have a complete financial report. In this regard, an approach / training will be carried out in preparing financial reports for the Young Tunas MSME business. The purpose of this training is to assist Young Tunas business actors in controlling the finances of their business so that it facilitates the process of modifying this business and Young Tunas businesses will continue to increase in the future.

The Effect of Financial Literacy, Financial Inclusion, Financial Technology Towards Financial Performance of Micro Business (Case study of micro waqf bank customers at As'ad Islamic Boarding School, Jambi City)

The aim of this research is to investigate how financial literacy, financial inclusion, and financial technology influence the financial performance of micro-enterprises.A sample of 68 respondents was randomly selected for data analysis through a questionnaire. The hypotheses were tested using the multiple linear regression analysis method with the assistance of SPSS For Window Version 25 software. The findings indicate that financial literacy, financial inclusion, and financial technology significantly influence the financial performance of micro-enterprises. Specifically, financial literacy positively affects the financial performance of micro-enterprises, while financial inclusion does not have a significant impact. Additionally, financial technology positively influences the financial performance of micro-businesses

Internal factors affecting the financial performance of an organisation's business processes

PurposeAlthough there are many efforts within organisations to improve the financial performance of business processes, the results of studies on the impact of internal factors on the financial performance of business processes in an organisation are inconsistent, even contradictory. Therefore, this paper aims to examine the extent and trends of the impact of factors inside companies on the financial performance of business processes and discover lessons learned to improve the financial performance of business processes.Design/methodology/approachThis analysis was done through a quantitative study of listed companies in Vietnam. Pooled OLS regression, REM, FEM and robust regression were performed on 566 companies.FindingsThe results provide four main findings. First, firm size and operational efficiency strongly correlate with financial performance. Second, financial leverage has a negative, significant connection with financial performance. Third, net working capital has a positive and meaningful relationship with EPS and a negative association with ROE. Fourth, liquidity does not have any significant association with financial performance.Research limitations/implicationsThis study only restricts the internal factors affecting the financial performance of business processes without mentioning the external factors. Furthermore, this study is limited to one emerging country and has not been compared with companies in different countries.Practical implicationsThe findings of this study may help inform users inside and outside the organisation to understand the factors that affect the financial performance of business processes. As a result, information users will focus more on aspects that can improve their financial performance to make informed decisions.Originality/valueThis study has many differences compared to previous studies. First, it focuses on the internal factors affecting the financial performance of business processes in non-financial listed companies in Vietnam, which has an emerging economy. First, it focuses on the internal factors affecting the financial performance of business processes in non-financial listed companies in Vietnam, which has an emerging economy. Second, this study analyses data in companies' financial statements for the ten years from 2012 to 2021, when the Vietnamese economy, in particular, and the world economy experienced many fluctuations due to the impact of the post-financial crisis 2007–2008 and the COVID-19 pandemic. Third, this study provides empirical evidence to support RBV, RDT theories and the trade-off theory of capital structure.

Intellectual capital and performance of listed firms during the global financial crisis: the effects of legal origin

PurposeThis study aims to reveal to what extent successful European listed firms depend on their intellectual capital investment in achieving business success during the global financial crisis.Design/methodology/approachThis study used value added intellectual coefficient (VAIC) methodology to measure the effect of intellectual capital on financial performance of business, which consist of 683 the sample listed firms. To examine the nexus between intellectual capital, legal origin and firm performance, estimated panel test and ordinary least squares regression model is used to data obtained from a sample of European countries.FindingsThe finding of this study suggests that there exists a positive relationship between intellectual capital and firm performance with return on assets (ROA) before the financial crisis, while firm performance with return on equity did not contribute to intellectual capital before and after the crisis period. Additionally, common law countries have a positive and statistically significant impact on firm performance with ROA for the before-crisis period, while code law countries have positively significant effect with VAIC on ROA.Practical implicationsThe VAIC method has played a critical role in the management decision-making process to integrate the intellectual capital in the financial crisis period.Originality/valueThis study examines intellectual capital components such as human capital, structural capital and process capital efficiencies and firm performance in the legal origin context. The empirical evidence shows that there are significant impacts of legal origin on the nexus between intellectual capital and performance of listed firms during the global financial crisis.

Relationship Between Customer Expectations and Financial Performance of Food Industry Businesses in a Customer Satisfaction Model

Research on customer satisfaction in repeat purchases shows that the relationship between customer expectations and customer satisfaction can be inverse to what is commonly reported. This also has an impact on the financial performance of an enterprise, which is therefore directly influenced by customer expectations. The goal of this paper is to determine whether customer satisfaction affects customer expectations and whether these expectations have a direct impact on the financial performance of an enterprise. The variables representing factors of customer satisfaction, including customer expectations, are measured using a customer survey. Business financial performance (BFP) was measured using the ROA, ROE, and Asset Turnover indicators. The model was created using Structural Equation Modelling. The research confirmed a positive direct effect of customer expectations on BFP (specifically ROA). Customer satisfaction impacted financial performance indirectly via customer expectations in two years. This suggests that the influence of customer expectations on BFP is long-term in nature, although this effect is rather weak. As customers make repeat purchases, customer expectations change. These changes reflect relationships primarily with customer satisfaction and loyalty and BFP. Customer satisfaction is shown to influence customer expectations, which in turn influence BFP. Therefore, it is advisable to focus on (raising) customer expectations in repeat purchases if the businesses want to achieve higher financial performance.