Financial Managers Research Articles

Cash Brilliance: Exploring Pakistan's Business Landscape through the Lens of Competitors' Dynamics

This study analyzed the impact of competitors’ factors on firm cash holding policy. Information related to competitors’ activities is necessary for most corporate strategies, but in most financial researches, factors related to competitors are not considered. This study aims at shedding light on the empirical effect of competitors’ specific characteristics in firm’s cash stockpiling decisions. For this purpose, the competitors’ factors were explained by these eight specific explanatory variables that determine the competitors’ specific characteristics such as (NWC, ROA, LEVER, SIZE, DEFA, CAPEX, MTB, and Z-SCORE) and firm cash holding as dependent variable. The target population of the study was Pakistan stock exchange listed manufacturing firms and the sample consists of 40 firms in the spinning textile sector for the 10 years data from 2009- 2018. The data was gathered from the financial statements of companies. Two main sites were used for collecting annual statements of companies the first was PSX (Pakistan Stock Exchange) and the second was companies’ own website. The study used the panel regression model with random effects, after conforming the significance of Hausman Specification Test (1978). The finding of this study was that the company cash holding policy significantly affected by the competitors’ factors. This study revealed that the company can make their cash holding decisions in the light of their competitors’ behaviors. The results offer stimulating insights at the competitors’ factors that compute the firm cash stockpiling decisions. The results might be beneficial for the financial manager, investor and also for the consultant.

Role of Working Capital Management in Enhancing Firm Profitability: An Empirical Study on the Manufacturing Companies of Pakistan

Working capital management is a crucial instrument and one of the key aspects of any business management. It is considered as an accounting technique to maintain the organization's liquidity and financial balance and is regarded as a critical part of financial management in the company. This study emphasizes on investigating the role played by working capital management in enhancing the profitability of companies from the manufacturing sector listed in Pakistan stock exchange during the period 2018-2022. Return on equity and return on assets are used as the profitability measures; however, account receivable turnover, inventory turnover and cash conversion cycle are used as the measures of working capital management. To evaluate the results, the least square regression model is used. The results show that inventory turnover has a significant positive association with both ROA and ROE, which implies that inventory management and sales acceleration have a positive effect on the company's return on assets and return on equity. Similarly, the association of accounts receivable turnover with ROA and ROE is also significant and positive, demonstrating that good credit management and prompt receivables collection improve the return on equity and assets. The research also reveals a significant positive association of both ROA and ROE with the cash conversion cycle. Higher returns on assets and equity are connected with a higher cash conversion cycle. The results suggested that the managers should speed up the collection of receivables as quickly as possible and quickly sell the inventory so that the cash thus generated can be reinvested in productive assets, which can increase the company’s profitability. The study's findings provide an important guideline to financial managers in managing the appropriate level of working capital to enhance firms’ profitability.

Using financial forecasting as a strategic catalyst for enhancing the financial performance of manufacturing companies in Kigali, Rwanda

Business organizations prioritize their financial performance, channeling significant effort into achieving superior results. This pursuit often involves setting targets, managing quotas, and focusing on crucial key ratios. Financial forecasting emerges as an indispensable tool in plotting the course toward optimal performance. It stands as a strategic asset that assesses strengths and weaknesses, becoming the cornerstone of decisions across production, inventory, personnel, and facilities. In the realm of manufacturing firms, effective financial forecasting isn't just pivotal—it's the linchpin for survival, growth, and sustained success. This study delved into the financial forecasting methods commonly employed by 842 manufacturing firms in Kigali, Rwanda. A sample of 90 firms, involving Directors of Finance and Accounting staff, illuminated insights critical to understanding this landscape. Results revealed that sales and profit forecasting reign supreme, embraced by 37.78% and 38.89% of these manufacturing entities, respectively. Yet, challenges persist, notably in achieving forecast accuracy and managing associated risks. Recommendations stem from this diagnosis, suggesting the establishment of review committees dedicated to enhancing forecasting methodologies. Ensuring the credibility and reliability of this study involved employing the test-retest method to validate and solidify the consistency and accuracy of the data. This approach underpins the findings, indicating that similar research efforts would yield consistent results, reinforcing the authenticity of the depicted ground reality. To bolster financial performance without limiting operational agility in a swiftly changing business environment, the study emphasizes the need for continued improvements in forecasting processes. This includes not only refining methods but also devising strategies to navigate unforeseen challenges effectively. Keywords: Financial performance, Financial forecasting, Strategic financial planning, Accounting staff, Manufacturing firms.

Budget Allocation and Management of Hospitals in Qingdao: Basis for Strategic Plan

The level of hospital budget management in China is uneven, and there are many problems in the process of budget management, such as unscientific budget preparation, uncontrolled budget implementation, and no performance evaluation of budget completion. This study examined the current state of hospital budget management in China, which highlights significant challenges such as unscientific budget preparation, inadequate control during implementation, and the absence of performance evaluation. These issues are compounded by communication gaps between departments, unclear responsibilities, and overall inefficiency in information integration, resulting in suboptimal budget management outcomes across the board. To shed light on this situation, the researcher conducted a qualitative study focusing on five public hospitals in Qingdao province, China, using in-depth interviews with financial directors to gather data. The findings revealed a mixed landscape where hospitals were aware of budget allocation and management practices but faced common challenges. Consequently, the study proposes a strategic action plan aimed at improving budget allocation and management practices in these hospitals. This plan emphasizes the need for streamlined processes, improved communication and coordination, clearer responsibilities, enhanced information integration, and performance evaluation mechanisms to optimize budget management outcomes and ensure efficient resource allocation to meet hospitals' growth and development objectives.

INNOVATIVE COMPONENT OF ECONOMIC SUSTAINABILITY OF REGIONAL ENTERPRISES

In modern conditions, innovation and innovation activity are becoming increasingly important for the economic development of the country and for the successful financial and economic activities of commercial organizations, being one of the basic elements of an effective strategy and an important tool for creating and maintaining competitive advantages. The importance of innovation activity as a driving factor of stable economic growth remains. The impact of these trends is further strengthened by the military situation, which has aggravated the need to use intensive ways of development and aggravated by the general scientific, technical and technological backwardness of many domestic industries. Significant difficulties in the practical application of the existing theoretical provisions of the analysis and evaluation of innovations are caused by the lack of methodological developments in the field of internal control of innovation activity and assessment of its overall efficiency for the enterprises of the region. The underdevelopment of the system of special analytical indicators and approaches to the assessment of innovations, taking into account their economic nature and content, in some cases negatively affects the validity of decisions made by financial managers of organizations. Changes in tax legislation also have a certain significance for the enterprises of the region and economic analysis and financial and economic control. An additional stimulus for the study of innovation activity problems is actively occurring nowadays processes of globalization and internationalization of the economy Entering the world stock markets, attracting foreign investment and preventing capital outflow are directly related to the mastering by economic entities of modern technologies in the field of production management, marketing and finance, with their accounting and reporting in accordance with international standards. In this regard, there is a growing need for methodological developments in the areas of analysis and control, including in the least developed area of innovation activity analysis. The need for periodic adaptation and improvement of analytical methodologies also gives rise to changes in other normative and legislative acts that form the legal basis for innovation activities.

Analysis of Poverty Determinants and Poverty Mitigation Strategies in Aceh Province

This research aims to provide empirical evidence on the effect of Direct Spending, Economic Growth, Open Unemployment, Per Capita Expenditure, and the Human Development Index (HDI) on the Poverty Population in Aceh Province. In this study, the author used secondary data and primary data. Secondary data were obtained from the Central Statistics Agency (BPS) and the Ministry of Finance's Directorate General of Budget Year 2010 to 2022. The analytical model used to examine poverty determinants is panel data regression analysis, while SWOT analysis is employed to assess poverty alleviation strategies. Based on the results of model selection tests using the Chow test and the Hausman test, it was determined that the Fixed Effect Model (FEM) is the most suitable model for this research. According to the findings of the Fixed Effect Model (FEM), Direct Spending has a significant negative effect; Economic Growth has a significant positive effect, Open Unemployment has a significant positive effect, Per Capita Expenditure has a significant negative effect, and Human Development Index (HDI) has a significant negative effect on the Poverty Population in Aceh Province. The simultaneous test results (F-test) indicate that Direct Spending, Economic Growth, Open Unemployment, Per Capita Expenditure, and the Human Development Index (HDI) collectively have a simultaneous effect on the Poverty Population in Aceh Province. Meanwhile, based on the SWOT analysis, it was found that the presence of impoverished communities in Aceh Province falls into quadrant 1, with an internal factor value of 0.05 and an external factor of 0.10. Therefore, the required strategy is (S-O Strategy), implying that strengthening internal aspects is the most appropriate choice for poverty alleviation in Aceh Province. Keywords: Poverty, Direct Spending, Economic Growth, Open Unemployment, Per Capita Expenditure, Human Development Index

Deciding Financial Problem Solution for a Construction Company using Fault Tree Analysis (FTA) and Fuzzy Analytic Hierarchy Process (Fuzzy AHP)

PT X is a construction company with clients spread among Central Java, West Java, Papua, Kalimantan, and Sulawesi. This company experienced financial problem and with the absence of financial bookkeeping, the financial issue was difficult to trace and each manager and also the owner had different perceptions toward the financial problem. One said that it was caused by bad financial investment decision, many said that it is because client late payment, while the other said that it is due to lack of orders and competition. In other word, this problem is still a perceived financial problem. This research was conducted to find the root cause of perceived financial problem in PT X as well as to find the best solution to solve it. By establishing 2 methods that consisted of fault tree analysis (FTA) and fuzzy analytical hierarchy process (fuzzy AHP), employing the thinking framework of value-focused thinking (VFT), the best solution was decided. FTA was used to identify the root cause of the problem which was bad investment decision. After that, reverse brainstorming was conducted to find all possible solutions. Before jumping into alternative solutions, VFT, a thinking framework, identified that control and simplicity was the value that the owner considered. 3 alternative solutions which were asking to financial consultant, hiring financial analyst, and training current financial manager, then analysed using fuzzy AHP with context suitability, sustainability, time needed, and cost as the criterion, and found out that training current financial manager is the best alternative to be chosen.

The Effect Of Earnings Growth, Financial Ratios And Dividends On Stock Prices In Manufacturing Companies Listed On The LQ45 Index For The Period 2020 – 2022

The purpose of this study is to see the effect of profit growth, financial indicators and dividends on the share price of the manufacturing industry listed on the LQ45 index for the 2020-2022 period. This research uses a quantitative approach and uses the Structural Equation Modeling-Partial Least Squares (SEM-PLS) test tool. The data in this study were obtained from the financial statements of public companies in the manufacturing industry listed on the LQ45 index. Independent variables include earnings growth rate, return on assets (ROA), return on equity (ROE), price to earning ratio (PER), price to book ratio (PBV), and dividends paid by the company. Research shows that financial ratios which include ROA, ROE, PER, and PBV variables have a positive and significant influence on the stock price of a company, besides that although earnings growth has a positive impact on stock prices but is not significant on stock prices, the growth varies greatly, as well as dividends.This helps investors, financial managers, and business decision makers to understand the things that affect the stock price of manufacturing companies in the LQ45 index. If a company wants to maintain or increase its share value in a competitive market, it should consider its earnings history, financial metrics, and dividend policy.

APPROACHES TO EVALUATION OF FINANCIAL RESULTS OF RA COMMERCIAL BANKS

The study evaluates the interaction of macroeconomic variables, regulatory changes and internal operations of banks in the context of financial results formation. The research applies certain approaches to the evaluation of financial results to create an appropriate framework, that reflects the dynamics of financial results of the RA banking sector. A wide range of factors including macroeconomic indicators, regulatory changes, market competition and strategies of Armenian banks are assessed to build a complete picture of financial performance that will also enable financial managers to make strategic and financial management decisions.

Fraud risk management and financial performance of microfinance institutions in Kenya

Fraud is a thorn in the flesh of many organizations in both local and global business ecosystems, more so in the financial sector because of the liquid nature of their services. To curb this menace, Financial Institutions including Microfinance institutions implemented fraud risk management practices. While larger financial institutions afford raft measures for curbing fraud, MFIs contend with less sophisticated practices in spite of them being the most susceptible to financial improprieties. Further, the determination of the overall effect of these practices on financial performance is critical in evaluating their success. The objective of this study therefore was to find out how fraud risk management practices affect the financial performance of Microfinance Institutions in Kenya. The study was anchored on the fraud management life cycle theory and focused on twelve deposit-taking Microfinance Institutions that were in operation in the Nairobi region of Kenya between 2016 to 2020. The study adopted a descriptive research design using cross-sectional data computed from the average financial results for five years 2016-2020. The study used purposive and stratified Random sampling methods to select a sample of 281 respondents from finance, ICT, operations, Audit, and Litigation managers and staff. The study used descriptive and inferential statistics to analyze the data. The results showed that fraud risk management positively and significantly affected financial performance by curbing incidents of fraud and concluded that to improve financial performance microfinance institutions should implement fraud risk management since they had a positive and significant effect on financial performance. The study recommended that firms should invest substantially in fraud risk management to reduce incidences of fraud and improve financial performance. Further, the management of Microfinance Institutions should continually evaluate and update their practices to keep abreast with the ever-changing fraud antics.

The Impact of Capital Structure, Investment Growth, and Liquidity on Financial Performance of Automotive Companies and Its Components on The Indonesia Stock Exchange (2018-2022)

Purpose: This study analyzes the influence of capital, investment, and liquidity structures on the financial performance of automotive companies and their components listed on the Indonesia Stock Exchange (IDX) from 2018 to 2022.
 Research methodology: Multiple regression analysis was used and data were obtained from the company's annual financial statements from 2018 to 2022. The findings of this study are expected to provide important insights for financial managers and stakeholders in managing company finances, and serve as a reference for investors and creditors in evaluating the financial performance of a company.
 Results: The results show that capital structure has a significantly positive effect on financial performance, while investment and liquidity do not significantly affect financial performance.
 Limitation: The study's limitation is that it focuses solely on automotive companies listed on the Indonesia Stock Exchange during the specified timeframe.
 Contribution: The study's contribution is that it provides empirical evidence regarding the impact of capital structure, investment growth, and liquidity on financial performance in the Indonesian automotive industry, which can inform future research and practical applications in this context.
 Implementation: Capital structure refers to the combination of debt and equity used to finance a company's operations, whereas investment refers to the use of funds or fixed assets to increase the value of the company's products. Liquidity refers to the ability of a company to meet its financial obligations in a timely manner. Multiple linear regression analysis was used in this study, and a sample of 15 companies was selected using purposive sampling.

Entrepreneurial Culture and Innovation by 1-3 Star Rated Hotels in Kenya

Purpose: The main purpose of this study was to assess the effect of entrepreneurial culture as a driver of innovation by 1-3 star rated hotels in Kenya.
 Methodology: This study considered positivism philosophy, a quantitative measurement paradigm. The study targeted 111 hotels (1-3 star rated) through census, of which 3 respondents per hotel (CEO, Finance manager, and Operations manager) were considered, from the hotels’ list provided by the Kenya Tourism Regulatory Authority (TRA). A cross-sectional survey was conducted where the self-administered questionnaire was used. Both the reliability and validity tests were done before the data analysis. The collected data was analyzed using descriptive and inferential statistics with the help of Excel and SPSS version 25.0. The hypotheses were presented and tested using multiple analysis and accepted at 95 percent confidence level.
 Results: The study hypothesized that the effect of entrepreneurial culture on innovation by 1-3 stars rated hotels in Kenya is not statistically significant. The study revealed that entrepreneurial culture has a positive and significant effect on hotel innovation by 1-3 star rated hotels in Kenya (β=0.567, p=0.000). This implies that improvement in 1 unit of the aspects related to entrepreneurial culture leads to an improvement in hotel innovation by 1-3 star rated hotels in Kenya by 0.567 units. This implies that an increase in entrepreneurial culture results in an increase in hotel innovation by 1-3 star rated hotels in Kenya. The study concludes that there is an entrepreneurial culture that can be concluded to enhance the innovation of the hotels. This has been noted where the hotel management always appreciates new business ideas from employees and other stakeholders. The management portrays the visionary leadership style that ensures the continuity of the business. In extension, the hotels that have excelled in innovation, encourage and support employees to continue pursuing new opportunities even when their previous ones had failed to pick up as expected; values communication as a tool for effective innovative strategies; appreciates the use of modern technology as a mechanism to offer reinforcement to innovation; employs risk management strategies in the course of innovation process and always embraces new changes that come with new ideas discovered and exploited.
 Unique contribution to theory, policy and practice: The study recommends that hotel entrepreneurs be proactive in seeking new product ideas and customer product information which will in turn enable them to create ideas for coming up with innovative products. Studies have shown that there is a positive and significant impact of entrepreneurial culture on all the perceived performance measures, with the exception of perceived financial performance measures.

Kualitas Laporan Keuangan: Penerapan Akuntansi Sektor Publik Terhadap Akuntabilitas Kinerja Instansi Pemerintah (Studi Kementerian Perhubungan BPTD Kelas II Provinsi Gorontalo)

Improving the quality of financial reports can be done by consistently applying public sector accounting standards and conducting regular audits of financial reports. The aim of the research is to determine and analyze the role of the quality of financial reports in moderating the application of public sector accounting reporting standards on the accountability of government agency performance. The research method approach used is a quantitative research method with the type of analysis used is survey analysis, using the PLS-SEM (partial least square modeling) analysis tool. The sample in the research was financial report managers, namely 46 respondents. Based on the results of this research, firstly, the implementation of public sector accounting has a positive and significant effect on the accountability of government agency performance. Second, the quality of financial reports cannot moderate the application of public sector accounting to the accountability of government agency performance. The higher the quality of the financial reports, the greater the possibility that the financial reports can meet the information needs of stakeholders

Strategic Optimization: The Impact of Administration and Financial Planning on the Decision-Making of Small and Medium-sized Enterprises in the Quevedo Canton

This article examines the influence of financial administration and planning on decision making in Small and Medium Enterprises (SMEs) in Quevedo. The main objective is to analyze how effective financial management can contribute to strategic optimization and making sound decisions in this specific business context. To achieve this objective, an exhaustive study was carried out that included a detailed analysis of current financial management practices in a representative sample of SMEs in Quevedo. The research methodology included in-depth interviews with financial managers, analysis of financial statements and surveys of local businesspeople. Statistical tools were implemented to evaluate the relationship between financial management practices and business results. Additionally, external variables, such as the local economic environment and government regulations, will be considered to contextualize the findings. The results revealed a significant positive evaluation between the effective implementation of financial management practices and successful decision making in Quevedo SMEs. Specific areas of improvement and practical recommendations for local business owners are identified, highlighting the importance of long-term planning, efficient resource management and adaptability to changing economic conditions. This study provides a comprehensive perspective on how financial management strategies can be key to the sustainable success of SMEs in specific local environments, offering valuable contributions to both academic literature and sector professionals.

Effect of Standard Costing on Financial Performance of Manufacturing Industries in the North Rift Economic Block, Kenya

The aim of this study was to examine the effect of standard costing on financial performance. The study adopted explanatory research design and stratified sampling technique for data collection on a questionnaire with closed-ended questions. The sample size for the study was 220 consisting of 63 auditors and 157 accountants from 48 manufacturing industries. Cronbach’s alpha and factor analysis were used to test for the reliability and construct validity of the research instrument respectively while the hypothesis was tested using regression analysis. The result of the study revealed that standard costing (β = 0.216, P>0.000) with R2= 0.662 had a positive significant effect on the financial performance of manufacturing industries. The study concluded that there is a significant correlation between standard costing and financial performance and that one unit change in standard costing would cause one unit change in financial performance. Likewise, the study recommended proper costing records and the application of standard costing by manufacturing firms to help them in financial performance assessment and gain control over costs. Further research studies should consider targeting operation managers and financial managers. The scope of the study was limited to manufacturing industries hence future studies should focus on service industries to establish whether the study would yield the same results.

Implementasi Manajemen Keuangan di SMA Labschool UNESA

Financial management is a science and art that discusses, examines, and analyzes how financial managers use all company resources to find, manage, and allocate funds. Financial management or commonly called learning can be explained as all company activities related to efforts to obtain company funds at low cost and use and allocate these funds efficiently. The purpose of the article is to describe how to implement financial management at Labschool Unesa High School. In this article the method used is qualitative by conducting interviews, observations and documentation studies. Labschool Unesa High Schoolhas good financial management by providing quality education to students for the success of the school in achieving its goals. In addition, this article also discusses financial management, how to overcome finances in urgent circumstances, budget plans, and so on related to this school.

Financial Management of Small and Medium Enterprises in Context with the Requirement of Integrating Sustaina-Ble Development and Sustainable Socially Responsible Business

Abstract The paper deals with the assessment of the current state of financial management of small and medium-sized enterprises in the conditions of the market economy in Slovakia and points out that during the transformation for the sake of sustainability, financial managers must find answers to many and com-plex questions related to sustainability and financial performance of the enterprise. It is therefore necessary to develop the content of financial management tasks from a sustainability perspective.

Factors of Value Chain Affect Bank Efficiency

This paper aims to determine and estimate the factors in the value chain that affect the efficiency of state-owned commercial banks in Vietnam. The study employs a combination of qualitative techniques, such as conducting interviews with top executives, financial managers, chief accountants, and employee surveys, along with quantitative methods like ordinary least squares analysis. The outcomes reveal four critical segments within the value chain – the retail department, operation department, back office, and call center – all of which significantly influence the efficiency of the banks. Additionally, drawing upon value chain theory and Porter's model (1985), the author underscores the significance of implementing a robust value chain strategy. This strategic approach has the potential to substantially enhance the competitive advantages of state-owned commercial banks in Vietnam. Doi: 10.28991/ESJ-2023-07-06-010 Full Text: PDF

Impact of Digital Transformation on Internal AuditAn Applied Study on The Egyptian Central Bank

The world is currently witnessing a widespread digital revolution, which is having a profound impact on all aspects of life, including the financial sector. In this context, digital transformation has become a necessity for financial institutions, including banks. This research aims to test the impact of digital transformation technologies on the internal audit function and financial inclusion in Egyptian banks. To achieve this goal, a field study was conducted on a sample of Egyptian government-owned commercial banks. The study found that there is a strong impact of the application of digital transformation mechanisms in banks on the development of internal audit procedures, through the following: (a) Improvement of the efficiency and effectiveness of internal audit activities: Digital transformation technologies help to analyse data faster and more accurately, which contributes to the faster and more effective detection of potential risks. (b) Increased transparency and accountability: Digital transformation technologies help to provide easier and faster access to financial and administrative information, which contributes to the enhancement of transparency and accountability in financial institutions. (c) Support for achieving financial inclusion: Digital transformation technologies help to provide banking services in a simpler, faster, and more efficient manner, which contributes to achieving financial inclusion. Keywords: Digital transformation, banking sector, Egyptian Central Bank

The Method of Encouragement in the Legal Regulation of Bankruptcy Relations: The Experience of Criminal Justice

The paper is devoted to considering the issue of the method of legal regulation of bankruptcy relations in the Russian Federation and the nature of this method. The paper examines the problem of implementing the method of encouragement, primarily in the context of bankruptcy procedures applied to citizens. The method of encouragement is considered through the prism of implementation of bankruptcy legislation in specific norms, providing incentives for a particular behavior approved by society and the state, which is expressed in an encouraging sanction. In this regard, the paper highlights that the current legislation on insolvency (bankruptcy) not only contains almost no encouraging norms, but also, in general, it does not employ even dispositive (nonmandatory) methods of legal regulation. In fact, only creditors have true dispositivity (discretion) today, but not the arbitration administrator, and even more, not the debtor, for whom the legislator provides only duties and prohibitions. From the above, it is concluded that the existing legal regulation of bankruptcy relations is the quintessence of the imperative method. Paradoxically, the author proposes to look for an alternative to this imperative in the field of criminal justice. The author highlights that many criminal law and criminal procedure phenomena, such as confession and active repentance, can be transferred to the sphere of bankrupt legal relations and they can increase the effectiveness of their legal regulation. In particular, this will help to ensure the principle of voluntary cooperation between the debtor and the finance manager. In conclusion, the author proposes to introduce the method of encouragement in the field of insolvency by analogy with criminal justice.