Corporate Solvency Research Articles

A Financial Analysis and Valuation of Pfizer

Abstract: The rational valuation of the healthcare industry and the analysis and research of the financial risks faced by enterprises can not only provide a basis for rational investment and transaction pricing decisions, but also help enterprises to find out the shortcomings of the production and operation, so as to improve the management mode of the enterprise, and help enterprises to achieve the maximisation of management. Firstly, this paper analyse the risks faced by Pfizer from a financial point of view by quantitatively comparing the data of Pfizer and its two competitors, Amgen and Unitedhealth Group, and then qualitatively analysing their characteristics in terms of liquidity, solvency and profitability and the reasons for this. Next, Pfizer is valued by looking at its leverage, business risk, earnings per share, etc. to measure the financial risk of the business and the reasons for the capital structure. It then gives investors an objective investment recommendation by forecasting Pfizer's future share price. The study concludes that Pfizer Inc. is illiquid, has poor corporate solvency, is at risk of debt servicing, and has suffered a significant decline in profitability. Valuing Pfizer, the forecast suggests that Pfizer's stock is currently undervalued.

From ratings to resilience: The role and implications of environmental, social, and governance (ESG) performance in corporate solvency

In an era marked by growing global turmoil, the strategic role of environmental finance and green investment in fostering sustainable development has never been more crucial. Particularly in regions beset by crises, enterprises find themselves at the forefront of efforts to develop resilience and stability. Leveraging insights from information effect theory and stakeholder theory, this study delves into an intricate interplay to unveil the impact of Environmental, Social, and Governance (ESG) performance on corporate solvency. In particular, the study investigates how ESG considerations influence short-term and long-term solvency metrics. Utilizing data from the listed constituent enterprises of the Stock Exchange of Thailand Sustainability Index (SETTHSI) during 2015 – 2023, the findings reveal a positive correlation between ESG performance and solvency at current levels, with no significant lag effect. Further analysis suggests that higher-polluting firms exhibit a stronger correlation between ESG performance and solvency compared to their non or lower-polluting counterparts. The findings remain robust across various assessments encompassing heterogeneity analysis by implementing group regressions and testing for endogeneity using the Propensity Score Matching approach, ensuring the reliability and applicability of the results which underscores the practical significance and theoretical relevance of the study, with profound implications for long-term enterprise resilience and broader social advancement.

The relationship between institutional investors’ holding in public firms and the level of corporate solvency

The relationship between institutional investors’ holding in public firms and the level of corporate solvency

Risk spillover effect of resident leverage on corporate debt

Using panel data from 2008 to 2019, this study analyzes the risk spillover effect of resident leverage on the corporate sector. Thus, the results indicate that increasing resident leverage does not create a more favorable macroeconomic environment for an enterprise to deleverage. Instead, it worsens the debt risk of the enterprise through mechanisms such as weakening corporate solvency, changing the corporate debt maturity structure, and enhancing the financial trend.

ESG performance and corporate solvency

This paper selects A-share listed companies in 2018–2022 as a research sample and examines the relationship between ESG performance and listed companies' solvency. It is found that the company's current ESG performance is positively correlated with its current solvency, and there is no lag; the correlation between high-pollution enterprises for solvency and ESG performance is more potent than that of non-high-pollution enterprises.

Empirical Analysis on the Factors Influencing Carbon Accounting Information Disclosure of Enterprises in a Low Carbon Economy

With the acceleration of global industrialization, energy consumption is increasing year by year, leading to an increasing carbon emission and becoming a key issue of concern for countries around the world. Based on the literature review and data collection at home and abroad, this paper makes a theoretical analysis of the impact of six factors on the level of carbon accounting information disclosure, namely, net return on equity, corporate solvency, basic earnings per share, years of listing, state-owned holding enterprises, and heavily polluting enterprises, and puts forward corresponding assumptions. Subsequently, through analysis and organization, this article selected 100 eligible listed companies in the Shanghai and Shenzhen A-share markets from 2019 to 2021 as the research subjects. The carbon accounting information disclosure index method was used to quantify the level of carbon accounting information disclosure as an explanatory variable, and six influencing factors were combined for empirical research. The following conclusion is drawn: Currently, the level of carbon accounting information disclosure of listed companies in China is average. Among them, the net return on equity, basic earnings per share, state-owned holding enterprises and heavily polluting enterprises are positively related to the level of carbon accounting information disclosure, while the asset liability ratio of enterprises and the number of years of listing are negatively related to the level of carbon accounting information disclosure. Finally, based on a combination of theoretical and empirical analysis, this article proposes relatively objective and feasible suggestions from the national, social, and corporate levels to improve the level of carbon accounting information disclosure by listed companies and help them achieve vigorous development in the future.

Research on the identification and prevention of supply chain finance risks based on ISM-MICMAC model

Supply chain finance is an important means to address the shortage of funds for small and medium-sized enterprises (SMEs). In recent years, the global outbreak of the Covid-19 epidemic has exacerbated the financing challenges of SMEs, and the importance of supply chain finance to the real economy has become increasingly evident, but at the same time, supply chain finance has also exposed many risks. This paper identifies 21 risk factors in supply chain finance, determines the hierarchical relationship of the risk factors by constructing an explanatory structural model (ISM), and then applies the cross-influence matrix multiplication method (MICMAC) to calculate the dependency and driving force magnitude of the 21 risk factors. The conclusions are as follows: natural environmental risks ( ), the hidden risk of core enterprise management ( ) are deep-rooted supply chain finance risks and have strong driving forces. Inadequate corporate solvency ( ), inadequate corporate profitability ( Inadequate corporate operating capacity ( Inadequate growth capability of enterprises ( ), inadequate credit guarantee capacity of core enterprises ( ), low level of creditworthiness of SMEs ( ) is a direct influence on the risk of supply chain finance, which is more influenced by intermediate factors and has a strong dependency. This result will provide scientific decision-making basis for supply chain financial risk management, saving more time and cost.

Research on the Impact of R&D Investment Under Tax Preferences on the Long-Term Debt Paying Ability of Enterprises ——Based on the Empirical Analysis of China's Shanghai and Shenzhen Listed Companies

Science and technology are the primary productive forces. Nowadays, most countries attach great importance of R&D investment. According to data released by OECD and other institutions, the United States continues to rank first in the world in terms of specific R&D expenditures, with US$612.7 billion in 2019; China After surpassing the 27 EU countries in 2015, it has been firmly ranked second, with 514.8 billion U.S. dollars in 2019. However, from the perspective of growth trends, China’s R&D investment in science and technology is growing at a significantly higher rate than other countries. According to the growth rate, it is expected that China’s R&D investment in science and technology is expected to surpass around 2022. In the context of the Chinese government's strong support for technological innovation of enterprises, various preferential tax policies have encouraged enterprises to invest in research and development. However, under preferential tax policies, enterprises have reduced their capital occupation, which in turn increases their cash flow and reduces their research and development. Risks promote the increase in corporate R&D investment, and the impact on corporate R&D investment in its long-term debt servicing ability is different. Therefore, under the preferential after-tax policies, it is of practical significance to study the relationship between the R&D investment of Chinese listed companies and the corporate solvency. This paper selects China's Shanghai and Shenzhen A-share listed companies as the research sample. The time span is from 2015 to 2019. A panel model is constructed and multiple regression analysis is performed to empirically test the impact of R&D investment on the long-term solvency of companies. On this basis, Incorporate taxes incentives into the model. Research shows that: R&D investment is significantly negatively correlated with corporate debt solvency; corporate R&D investment under tax incentives has a stronger impact on its long-term debt solvency.

Corporate Diversification, Ownership, and Solvency in China’s Property-Liability Insurance Companies

Solvency is the premise of the sustainable management of insurance companies. Among factors that affect the solvency of insurance companies, diversification strategy is one that cannot be ignored. To study the impact of diversification on the solvency of property-liability insurance companies and how diversification will influence companies with different ownership, this paper adopts the dynamic panel GMM model and the unbalanced panel data from 2009 to 2015. The analysis is from two dimensions: product diversification and geographic diversification. Empirical study shows that product diversification will increase the solvency of Chinese-funded property-liability insurance companies but reduce the solvency of foreign-funded ones. As for the impact of geographic diversification on solvency, the more geographically diversified the premium income of Chinese-funded property-liability insurance companies are, the lower their solvency will be. However, geographical expansion has no significant solvency-related impact on foreign-funded property-liability insurance companies in China.

Housing Price Forecasting in Selected Polish Cities During the COVID-19 Pandemic

The COVID-19 pandemic represents a combined supply and demand shock to the financial and housing market but also an unusual negative shock in terms of the health of society (households) and national economy. The fall in housing demand was initially assumed together with price decreases as a consequence of the uncertainty of the health of society, significant falls in stock markets and corporate solvency. However, the results of research in selected Polish cities do not indicate such a significant market recession. This article examines the housing price dynamics and forecasting in Polish cities during the COVID-19 pandemic. The TRAMO/SEATS and ARIMA models were used for the decomposition and forecasting of dwelling time series. The Polish housing market, represented by selected local housing markets, still shows a growing trend despite the COVID-19 pandemic throughout 2020. The housing market may slow down in 2021, but the strong forecasted growth trends in Warszawa and Poznań suggest that there will be no significant price decline in Poland in the near future.

Analysis of the Social Capital Financial Characteristics of Public–Private–Partnership Projects in Coastal Areas

Qin, Y. and Guo, X., 2020. Analysis of the social capital financial characteristics of public–private–partnership projects in coastal areas. In: Li, L. and Huang, X. (eds.), Sustainable Development in Coastal Regions: A Perspective of Environment, Economy, and Technology. Journal of Coastal Research, Special Issue No. 112, pp. 252-256. Coconut Creek (Florida), ISSN 0749-0208.This article takes the listed companies that have participated or are participating in coastal infrastructure Public–Private–Partnership projects as the research object, finds matching companies for them through the propensity score matching method, and quantitatively analyzes which financial characteristics of the social capital side affect the participation of coastal infrastructure Public–Private–Partnership projects from the micro level degree. The conclusion is that the two characteristics of corporate solvency and the nature of equity have had a significant negative impact on its participation in coastal infrastructure Public–Private–Partnership projects, and the impact of solvency is particularly important. When the empirical sample size is expanded, the asset management capability index is an influencing factor for companies participating in PPP projects one.

Impact of Covid-19 on corporate solvency and possible policy responses in the EU

The massive contagion of new coronavirus (Covid-19) has disrupted many businesses across the European Union. This has resulted in an immense drag on the revenues and cash flows that may lead to a significant increase in corporate bankruptcies. In this paper, we investigate the impact of Covid-19 on the solvency profile of the firms in the EU member states. We introduce multiple stress scenarios on the non-financial listed firms and report a progressive increase in the probability of default, an increase of debt payback, and declining coverages. Our results indicate that the solvency profile of all firms deteriorates. The manufacturing, mining, and retail sector are most vulnerable to a decline in market capitalization and a reduction in sales revenues. The paper also examines the possible policy interventions to sustain solvency at a pre Covid-19 level. Our findings suggest that for a moderate deterioration in economic conditions, a tax deferral is sufficient. However, in the event of exacerbating business shocks, there should be hybrid support through debt and equity to avoid a meltdown. This study has important implications for policymakers, corporate managers, and creditors.

EXTERNAL FACTORS WITH GOVERNMENT AND COMPANY POLICIES THAT HAVE AN IMPACT ON THE DEBT SERVICE COVERAGE RATIO OF COAL COMPANIES

Coal companies are industries that require large capital in building their industries, therefore companies must be able to know what external factors and internal factors that can affect financial performance and DSCR. This study uses a quantitative approach with secondary data from 4 coal companies listed on the IDX in 2011-2018. In this study structural and identity, equations are used with the 2SLS method. The results showed that (1) DSCR conditions, companies that had financial flexibility, with DSCR above the minimum requirements namely ADRO, INDY, and PTBA but BYAN did not have (2) the number of coal exports was influenced by the difference in Chinese GDP and the number of export coal sales, the number of domestic coal sales is influenced by differences in Indonesian GDP and the number of domestic coal sales. EBIT which is the company’s profitability performance is affected by gross profit. FCF is the company’s liquidity performance which is influenced by EBITDA and CAPEX. Principal payments are the company’s liquidity performance that is affected by liabilities. DSCR, corporate solvency performance is influenced by the principal payment ratio, (3) the decline in Chinese GDP is anticipated by lowering production costs, general and administrative costs, sales and marketing costs, and CAPEX, have an impact on increasing the financial flexibility of the company and its DSCR. If The amount of DMO is added and the domestic coal price was set by the government or by market price, it impacted on increasing the financial flexibility of the company and its DSCR.

PERAN KEBIJAKAN DIVIDEN DALAM MEMODERASI HUBUNGAN RASIO KEUANGAN DENGAN NILAI PERUSAHAAN

The purpose of this research was to analyze the effect of financial ratio on corporate value with dividend policy as moderation. Population on this research is all companies listed in Indonesia Stock Exchange (IDX) year 2015-2017. 108 companies selected using the purposive sampling method. Financial ratio used variable liquidity, solvency and profitability. The analysis method of this research is moderate regression analysis (MRA) by using SPSS 25 version. The result of this research shows that: liquidity has no significant effect on the corporate value, solvency and profitability has significant effect on the corporate value. Dividend policy has moderated relationship solvency and profitability with corporate value

A Hybrid Metaheuristic Method in Training Artificial Neural Network for Bankruptcy Prediction

Corporate bankruptcy prediction is an important task in the determination of corporate solvency, that is, whether a company can meet up to its financial obligations or not. It is widely studied as it has a significant effect on employees, customers, management, stockholders, bank lending assessments, and profitability. In recent years, machine learning techniques, particularly Artificial Neural Network (ANN), have widely been studied for bankruptcy prediction since they have proven to be a good predictor, especially in financial applications. A critical process in learning a network is weight training. Although the ANN is mathematically efficient, it has a complex weight training process, especially in computation time when involving a large training data. Many studies improved ANN’s weight training using metaheuristic algorithms such as Evolutionary Algorithms (EA), and Swarm Intelligence (SI) approaches for bankruptcy prediction. In this study, two metaheuristics algorithms, Magnetic Optimization Algorithm (MOA) and Particle Swarm Optimization (PSO), have been enhanced through hybridization to propose a new method MOA-PSO. Hybrid algorithms have been proven to be capable of solving optimization problems faster, with better accuracy. The MOA-PSO was used in training ANN to improve the performance of the ANN in bankruptcy prediction. The performance of the hybrid MOA-PSO was compared with that of four existing algorithms. The proposed hybrid MOA-PSO algorithm exhibits promising results with a faster and more accurate prediction, with 99.7% accuracy.

Discussion on Corporate Solvency Taking Gree Electric Appliance as an Example

The analysis of solvency is an important part of corporate financial analysis. It is of great significance for improving the solvency of enterprises and promoting the healthy development of enterprises. This article takes Gree Electric Appliance Co., Ltd. as an example. From the important indicators of measuring the solvency of enterprises, the paper analyzes the ratios of current ratio, quick ratio, cash ratio, asset-liability ratio, equity ratio, interest guarantee multiple and other indicators. Short-term solvency and long-term solvency, and make reasonable recommendations.

Empirical calibration of climate policy using corporate solvency: a case study of the UK’s carbon price support

ABSTRACTEmission reductions improve the chances that dangerous anthropogenic climate change will be averted, but could also cause some firms financial distress. Corporate failures, especially if they are unnecessary, add to the social cost of abatement. Social value can be permanently destroyed by the dissolution of organizational capital, deadweight losses paid to liquidators, and unemployment. This article proposes using measures of corporate solvency as an objective tool for policy makers to calibrate the optimal stringency of climate change policies, so that they can deliver the least loss of corporate solvency for a given level of emission reductions. They could also be used to determine the generosity of any compensation to address losses to corporate solvency. We demonstrate this approach using a case study of the UK’s Carbon Price Support (a carbon tax).Key policy insightsSolvency metrics could be used to empirically calibrate the optimal stringency of climate policies.An idealized solvency trajectory for firms affected by climate change policy would cause corporate solvency to initially decline – approaching but not exceeding ‘distressed’ levels – and then gradually improve to a new ‘steady state’ once the low-carbon transition had been achieved.In terms of the UK’s Carbon Price Support, corporate solvency of energy-intensive industries was found to be stable subsequent to its introduction. Therefore, the available evidence does not support its later weakening.

Bottom-Up Default Analysis of Corporate Solvency Risk: An Application to Latin America

This paper suggests a novel approach to assess corporate sector solvency risk. The approach uses a Bottom-Up Default Analysis that projects probabilities of default of individual firms conditional on macroeconomic conditions and financial risk factors. This allows a direct macro-financial link to assessing corporate performance and facilitates what-if scenarios. When extended with credit portfolio techniques, the approach can also assess the aggregate impact of changes in firm solvency risk on creditor banks’ capital buffers under different macroeconomic scenarios. As an illustration, we apply this approach to the corporate sector of the five largest economies in Latin America.

Bottom-Up Default Analysis of Corporate Solvency Risk: An Application to Latin America

This paper suggests a novel approach to assess corporate sector solvency risk. The approach uses a Bottom-Up Default Analysis that projects probabilities of default of individual firms conditional on macroeconomic conditions and financial risk factors. This allows a direct macro-financial link to assessing corporate performance and facilitates what-if scenarios. When extended with credit portfolio techniques, the approach can also assess the aggregate impact of changes in firm solvency risk on creditor banks’ capital buffers under different macroeconomic scenarios. As an illustration, we apply this approach to the corporate sector of the five largest economies in Latin America.

Idiosyncratic Effect of Corporate Solvency Management Strategies on Corporate Performance Valuation – A Study of Chemical Industry

The study identifies and evaluates the association among corporate solvency management strategies and the corporate performance valuation in Chemical industry of Pakistan. The study uses purposive sampling or judgmental sampling for selecting 30 sample companies from the sector; covering 10 years financial statements data ranging from year 2002 to 2011. Balanced panel data is taken for the purpose of study. Levin, Lin & Chu test is used to check the stationarity of data whereas White Test is used to check the heteroskedasticity of data. Panel Least square technique with fixed effects is used to generalize the relationship between studied variables. The study observed that the performance of the chemical sector in terms of market to book value is affected by internal firm and industry specific factors related to solvency management strategic decisions. Findings of the study provide with the overview of historic performance and the potential performance of the selected sector to help policy makers including finance, economics and industry experts for