Indicators Of Financial Health Research Articles

Analyzing Investment Strategies and Risk Management for US Tech Stocks

As the significance of tech stocks in the global market continues to rise, understanding their investment strategies and risk management becomes crucial. This paper explores investment strategies and risk management methods for US tech stocks, providing theoretical support and practical guidance for investors. We analyze three representative tech stocks: Powell Industries (POWL), NVIDIA (NVDA), and Vertiv Holdings Co (VRT), comparing their market performance and risk characteristics using various financial metrics. Our findings highlight that momentum investment strategies, particularly for high-growth stocks like NVIDIA, can yield substantial short-term returns, though they carry reversal risks. The study highlights the importance of individual stock selection and market sentiment on portfolio returns, as most market gains are driven by a small number of outperforming stocks. Effective risk management is critical, with a focus on idiosyncratic and liquidity risks, and hedge funds play an important role in dynamically adjusting strategies to maximize returns and control risks. Our study concludes that investors should balance growth potential with risk management, using a diversified portfolio and financial health indicators to effectively cope with the high volatility of technology stocks.

Driving green innovation: assessing the impact of environmental tax policies and green finance on heavily polluting industries

Purpose The purpose of this paper assess the impact of the green finance pilot reform on corporate green innovation, leveraging the establishment of the China green finance pilot reform in 2018 as a quasi-natural experiment. Design/methodology/approach This study investigates the effects of environmental policies on green innovation, utilising a substantial data set from Chinese A-share listed firms over the 2015–2019 period. Employing both double and triple difference models, it focuses on how tax reforms influence green patent filings among these firms. Findings The study confirms that environmental tax policies and green finance initiatives significantly boost green patent filings in pollution-intensive industries. Findings from the regression analysis show robust positive effects from these policies, supporting the idea that stringent environmental regulations can spur innovation by offsetting regulatory costs. Financial health indicators like asset logs and return on assets positively correlated with innovation, emphasising the importance of financial stability. In addition, increased RandD spending is linked to enhanced green innovation, highlighting that financial investment in research is crucial for overcoming innovation barriers. These insights are crucial for shaping policies that integrate sustainability into corporate practices. Originality/value This research contributes to the literature by highlighting traditional views on the economic burden of environmental taxes and demonstrating their role as significant drivers of innovation. It deepens insights into strategically optimising fiscal tools to promote environmentally sustainable economic activities. In addition, it offers a practical framework for policymakers to improve ecological outcomes through effective fiscal strategies.

Investigating the Effect of Financial Health and Macroeconomic Indicators on Profitability, Efficiency and Productivity of Iran’s Banks

Investigating the Effect of Financial Health and Macroeconomic Indicators on Profitability, Efficiency and Productivity of Iran’s Banks

Predicting financial distress in TSX-listed firms using machine learning algorithms.

This study investigates the application of machine learning (ML) algorithms, a subset of artificial intelligence (AI), to predict financial distress in companies. Given the critical need for reliable financial health indicators, this research evaluates the predictive capabilities of various ML techniques on firm-level financial data. The dataset comprises financial ratios and firm-specific variables from 464 firms listed on the TSX. Multiple ML models were tested, including decision trees, random forests, support vector machines (SVM), and artificial neural networks (ANN). Recursive feature elimination with cross-validation (RFECV) and bootstrapped CART were also employed to enhance model stability and feature selection. The findings highlight key predictors of financial distress, such as revenue growth, dividend growth, cash-to-current liabilities, and gross profit margins. Among the models tested, the ANN classifier achieved the highest accuracy at 98%, outperforming other algorithms. The results suggest that ANN provides a robust and reliable method for financial distress prediction. The use of RFECV and bootstrapped CART contributes to the model's stability, underscoring the potential of ML tools in financial health monitoring. These insights carry valuable implications for auditors, regulators, and company management in enhancing practices around financial oversight and fraud detection.

Does Company Size and Profitability Matter? Investigating the Moderating Effects of Growth in Cash Flow on Stock Performance

This research examines the intricate relationships between company size, growth in cash flow, and stock performance, revealing complexities that challenge traditional financial analysis. While company size is often associated with stable stock performance due to advantages such as economies of scale and market power, the findings indicate that size alone does not positively impact stock performance. Furthermore, the study demonstrates that growth in cash flow does not significantly moderate the relationship between company size and stock performance. This suggests that external factors, such as regulatory changes or market sentiment, may play a more decisive role. The results underscore that cash flow, while an important indicator of financial health, does not enhance the influence of company size on stock performance, particularly in certain industries where external conditions prevail. This underscores the need for a more comprehensive evaluation approach that considers a broader range of factors when assessing stock performance. It's time to move beyond traditional metrics like profitability and cash flow growth and equip ourselves with a more robust set of tools for analysis. Ultimately, this research advocates for a multifactorial approach to stock performance evaluation, emphasizing the importance of understanding the interplay between various variables, including industry trends and macroeconomic conditions. By adopting this comprehensive perspective, investors and analysts can make more informed decisions and strategies, enhancing their ability to navigate the complexities of the financial markets.

THE EFFECT OF ENVIRONMENTAL, SOCIAL, GOVERNANCE ON FINANCIAL DISTRESS IN COMPANIES LISTED ON THE IDX

General Background: Financial distress is a critical condition that companies experience before bankruptcy or dissolution, making its identification essential to prevent such outcomes. Specific Background: In recent years, aspects of Environmental, Social, and Governance (ESG) have gained attention as potential indicators of financial health, particularly in manufacturing companies. Knowledge Gap: However, limited research examines how ESG factors influence financial distress, especially in the context of emerging markets like Indonesia. Aims: This study investigates the impact of ESG disclosures on financial distress among manufacturing companies listed on the Indonesia Stock Exchange (IDX) during 2019–2022. Results: The results indicate that corporate governance disclosure has a significant negative effect on financial distress (p = 0.008), whereas environmental and social disclosures do not show a significant impact (p = 0.342 and p = 0.455, respectively). Novelty: This study highlights the distinct role of governance in mitigating financial distress, differentiating it from environmental and social disclosures, which have shown no significant effect. Implications: The findings suggest that corporate governance improvements may help companies avoid financial distress, while environmental and social factors may require further investigation for more comprehensive insights.

Analisis Dinamika dan Keseimbangan Pembiayaan Bank Umum Syariah Dengan Pendekatan Error Correction Model

The study aims to analyze the dynamics and balance of financing of Islamic Commercial Banks in Indonesia during the period 2015-2023 with a focus on changes in monetary policy, real effective exchange rate, price level, profitability, and capital adequacy. The research method uses a quantitative approach with analysis techniques using the error-correction model (ECM) approach. The results showed that monetary policy, real effective exchange rate, profitability, and capital adequacy ratio have a significant influence on the financing of Islamic Commercial Banks in Indonesia in the long run. In contrast, the price level does not show a significant influence on financing in the long run. These results explain that macroeconomic factors and banking performance are crucial in determining the balance of financing in the Islamic banking sector in Indonesia. The findings suggest that changes in monetary policy, which often reflect overall economic conditions, can affect financing decisions in Islamic banks. In addition, fluctuating real exchange rates can affect the price competitiveness and financial position of banks. Profitability, as an indicator of financial health, and the capital adequacy ratio, as an indicator of a bank's ability to bear risk, were also found to have a significant influence, suggesting that the internal performance of Islamic banks is decisive in the financing provided.

Climate risk and financial stability: Assessing non-performing loans in Chinese banks

Climate change poses significant challenges across various sectors, particularly within the financial realm, where the stability of banking systems is paramount. Non-performing loans (NPLs), as critical indicators of financial health, may be considerably influenced by climatic factors. This study delves into the impact of climate change on NPLs within the Chinese banking sector from 2010 to 2022, focusing on the influence of greenhouse gas (GHG) emissions. Utilising a comprehensive dataset and advanced econometric models (including panel quantile regression, sensitivity analysis and balanced panel data models), this research illuminates the intricate relationship between environmental changes and financial health. The research also discovers a significant climate change impact on NPLs, with increased GHG emissions leading to varied responses among banks. This variation reflects the different risk profiles and adaptive capacities of banks to climate-related financial risks. Banks demonstrating higher adaptability to climate change exhibit lower NPL ratios, underscoring the importance of strategic risk management and proactive adaptation in the banking sector. The research significantly advances the understanding of the financial implications of climate change and the interplay of climate variables with financial stability. It offers crucial insights for policy makers and banking institutions, emphasising the need to integrate climate risk into financial decision making and develop robust climate-resilient strategies for the banking sector's protection. In conclusion, the study enriches the discourse on the financial impacts of climate change and serves as an informative guide for stakeholders in navigating and addressing these emerging challenges. It underscores the necessity of embedding environmental considerations within banking practices to promote a resilient and sustainable financial system in the face of environmental uncertainties.

Parenting Students and Indicators of Financial Stability, Health, and Academic Success: Findings from a Population-Based Sample of Public Urban University Students.

Parenting students constitute a significant portion of the college population, with 22% of undergraduate students nationwide managing the dual responsibilities of parenthood and education. Single-parenting students face disproportionate challenges to achieving academic success. This study examines the health, financial, and academic aspects of parenting students attending a large, urban public university, specifically comparing single parents to their married or cohabiting counterparts and non-parenting students in New York City. We collected data from 2104 participants, including 142 single parents and 119 married or cohabiting parents, through a cross-sectional survey. Using adjusted regression models, we evaluated the associations between parenting status and financial, health, and academic factors. Our findings reveal that, in comparison to non-parents, single parents are significantly more likely to carry debt (adjusted odds ratio [aOR] 1.81), rely on food assistance (aOR 5.03), and achieve slightly lower GPAs (β - 0.11). Single parents also work more hours (aOR 1.66) and have an increased likelihood of facing debt (aOR 2.66), housing difficulties (aOR 2.80), food insecurity (aOR 2.21), and lower GPAs (β - 0.22) compared to their married or cohabiting peers. The disaggregation of single and married or cohabiting parents reveals significant disparities, emphasizing the vulnerability of single-parenting students in higher education. Targeted interventions addressing issues like food security and housing are essential to support the academic success of single parents.

Three-dimensional model of financial resilience in workers: Structural equation modeling and bayesian analysis

This work focused on evaluating financial health indicators, namely their perception, experiences lived during the pandemic, and actions carried out to face the financial crisis caused by the COVID-19. The eight financial health indicators proposed by BBVA bank and the Center for Financial Services Innovation were used for the study. These make up a 24-item scale and are often used to measure perception, experiences during the pandemic, and financial resilience. The sample included 357 workers from the Duxom Company, which has national coverage and operates in the private security sector. The validity test showed an acceptable Cronbach's alpha index for each construct (α; 0.848; α; 0.779; α; 0.818), denoting reliability and internal consistency. The values obtained from asymmetry (<2) and kurtosis (<7) justified the normality of the data. The research findings suggest that, while the perception of financial health indicators has a very low influence on financial resilience (.05), the experiences lived during the pandemic in relation to these indicators influenced (.74) the actions carried out to face the financial crisis caused by the COVID-19. The confirmatory model shows that the P-ISF construct is explained with 6 of the 8 variables; the Ev-ISF construct – with 3 of 8, and the financial resilience construct is explained with 7 of 8 variables (CMIN/DF:1.913; CFI:0.981; TLI: 0.973; RMSEA=0.05). The excluded variables show very low estimates; therefore, it is recommended to expand future studies to other populations and samples.

A Comprehensive Approach to Bankruptcy Risk Evaluation in the Financial Industry

The study presents a comprehensive approach to examining the potential risk of bankruptcies in financial sector organizations. This investigation explores 20 financial sector entities and evaluates their fiscal history from 2000 to 2018. The developed model assesses the chance of these companies going bankrupt by analyzing indicators like liquidity, profitability, debt composition, and operational effectiveness. These metrics are contrasted to regulatory requirements and assessed as having low, moderate, or elevated risk repercussions, ultimately contributing to an overall threat rating. Additionally, the model has a unique algorithm that compensates for excessive debt levels, strengthening the reliability of the risk appraisal grade. This straightforward instrument illustrates the demand to incorporate a variety of financial health indicators. According to the findings, excessive amounts of debt have a detrimental influence on profitability, leading to decreased stock returns and a greater probability of bankruptcy. These findings have practical implications for investors and stakeholders, providing insightful information to help inform decision-making, especially during periods of economic unpredictability such as pandemics. Furthermore, they encourage the enhancement of financial market efficiency.

Basel Capital Regulations over Pre and Post Basel III Regime: An Indian Scenario

The adequacy of capital has become a concerned issue because banks being the highly leveraged sector face high risks. So, it is desirable to know at which level of capital is adequate for banks. The focus on capital have existed for a long time but now the definition of capital has changed for banking business due to changes and advancement in banking operations. A bank with higher capital adequacy ratio is considered safe and capable to meet its obligations. The Reserve Bank of India requires all scheduled commercial banks to meet the capital level as stipulated under Basel III norms to comply with international standards. According to the guidelines of Bank for International Settlements (BIS), the banks should maintain that level of capital where a bank can easily recover unexpected shocks and crisis. The adequacy of capital is the measure of financial soundness of banks and indicator of financial health of banks. The banking activities are exposed to various kinds of risks and to manage these risks, banks must maintain sufficient capital. Therefore, it is necessary to set the regulatory guidelines for limits of capital hold by banks. Thus, the present study intends to examine the trends and consistency of capital adequacy ratio of twenty one Indian public sector banks for the period of ten years (2008–2017). The results conclude that the level of capital ratio as per Basel III norms maintained by Indian public sector banks determines the bank’s strength and position.

News-based financial health indicators for the Chinese real estate market

News-based financial health indicators for the Chinese real estate market

Shaping Market Perceptions: An Investigation into Macedonian Bank Stock Prices and their Drivers

This research paper examines the effects of return on assets (ROA), earnings per share (EPS), and audit opinion as a control variable, on the stock prices of banks in North Macedonia. The primary aim of this research endeavor is to scrutinize the influence exerted by these financial metrics on the stock prices pertaining to banking institutions within the region of North Macedonia, while also endeavoring to ascertain the extent of said influence. To analyze this relationship, a linear multiple regression model is employed. Data were collected from the audited financial statements and annual reports of all 12 banks in North Macedonia over a ten-year period from 2012 to 2021. The research findings illustrate a notable statistical influence of audit opinions and earnings per share (EPS) on the stock valuations of banks within the North Macedonian context. To elucidate, the positive coefficient associated with the audit opinion variable signifies its discernible sway on stock prices. Likewise, the positive coefficient linked with the EPS variable highlights that augmented earnings per share correlate with an upswing in stock prices. However, it is important to note that when audit opinion is excluded from the model, the results change, and ROA shows a statistically significant impact on stock prices. This suggests that the inclusion of audit opinion as a control variable affects the relationship between ROA and stock prices. These findings imply that investors in the banking sector in North Macedonia consider audit opinion and EPS as crucial indicators of a bank's financial health, influencing their investment decisions. Maintaining a positive audit opinion and increasing EPS are important factors for boosting stock prices, which is valuable information for bank managers and investors. The recent changes in the audit report format, including the reporting of Key Audit Matters (KAM), have not yet been implemented in the domestic audit practice. As a result, auditors do not report on KAM, which may have influenced the research results differently. Also, the small sample size can be perceived as a limitation of the research. With only 12 banks in the Macedonian banking sector, the generalizability of the findings may be restricted. Future research could consider expanding the sample to enhance the representativeness of the study.

The Relationship Between Coronavirus Disease 2019 (COVID-19) Pandemic-linked Job Losses and Health Care Access and Household Financial Health in Medicaid Expansion and Nonexpansion States.

Unemployment associated with the coronavirus disease 2019 (COVID-19) pandemic was linked to financial insecurity and disruptions in access to health care. To explore whether expanded access to Medicaid mitigated the likelihood of health and non-health financial hardship associated with pandemic-linked job loss. We estimate linear regression models comparing differences in the levels of outcomes attributable to pandemic-linked joblessness in Medicaid expansion and nonexpansion states. A total of 20,281 adults aged 19-64 were in the 2021 National Financial Capability Study. Our key exposure was job loss, layoffs, and furloughs, attributable to the COVID-19 pandemic. Outcomes under evaluation include indicators of health care access and household financial health. Relative to persons reporting pandemic-linked unemployment in nonexpansion states, adults experiencing pandemic-linked job loss in expansion states were less likely to report as uninsured [-6.2 percentage points (PPs); 95% CI: -10.8, -1.6; P < 0.01], having unpaid medical bills (-4.3 PP; 95% CI: -8, -0.6; P < 0.05), having unmet medical needs due to cost (-5.3 PP; 95% CI: -10.1, -0.5; P < 0.05), and having calls from debt collection agencies (-6.9 PP; 95% CI: -10.6, -3.1; P < 0.01). Patterns consistent with Medicaid acting as a safety net for the adverse financial effects of job loss were more pronounced for middle-income households. In economic downturns, such as the COVID-19 crisis, Medicaid can help insulate households from diminished health care access and financial distress associated with job loss.

Financial Health Indicators that Affect Return on Assets of Indonesian Guarantee Institutions

The amount of outstanding claims increased, and the Financial Service Authority, known as Otoritas Jasa Keuangan (OJK) had regulations to make them keep their performance financial health. The institution also needs to improve its financial performance, which may be affected by financial health. This research aims to find out and analyze the influence of financial health indicators on financial performance. The type of this research is classified as quantitative associative research. The study used secondary data of guarantee institution statistics that includes financial highlight, financial position, comprehensive income, investment portfolio, and operational performance of guarantee institutions for 78 months, from January 2016 to June 2022. This study used multiple linear regression analysis with analytical tools Eviews version 12. The indicator of financial health was using Early Warning System (EWS) and gearing ratio. EWS is proxied through the solvency margin ratio, adequacy of capital funds, incurred loss ratio, and liquidity ratio, while financial performance is proxied through return on asset. The result of this study shows that solvency margin ratio, adequacy of capital funds, and liquidity ratio affect financial performance, while incurred loss ratio and gearing ratio do not affect financial performance.

COVID-19 and commodity effects monitoring using financial & machine learning models

This article focuses on examining the effects of the COVID-19 pandemic and gold prices on the stock market. It primarily analyzes the relationship between COVID-19 cases and stock market prices, along with the impact on various commodity elements such as gold, oil, Chinese RMB, and US Dollar prices. These commodity elements are considered essential indicators of a country's financial health, and the study investigates how the increase in COVID-19 cases affects these financial elements. The research incorporates financial models, machine learning algorithms, and a financial Gaussian mixture model for data analysis and comparison. The findings shed light on the correlation between the virus, trading outcomes, and the importance of Karachi Stock Exchange-100 index data in preventing market crashes. The study also explores the implications of emergencies on the finance sector and provides insights for future financial predictions and the impact of social disasters on the economy.

Pengaruh Suku Bunga, Pinjaman Luar Negeri dan Ekspor Terhadap Cadangan Devisa di Indonesia

This research aims to examine the influence of interest rates, foreign loans and exports on foreign exchange reserves in Indonesia. The type of research used is quantitative research. The data in this research is secondary data in the form of a time series in the form of annual data from 1992 to 2022. The data analysis used is multiple linear regression analysis. The results of this research state that interest rates, foreign loans and exports influence foreign exchange reserves in Indonesia. In an economy, the interaction between interest rates, foreign loans and exports is dynamic. It is important to manage these factors carefully so that the stability of foreign exchange reserves can be maintained, because foreign exchange reserves are one of the main indicators of a country's financial health. The government and central bank must always monitor and adjust economic policies by considering the impact of interest rates, foreign loans and exports on foreign exchange reserves

Decree or democracy? State takeovers and local government financial outcomes

AbstractMany states possess the authority to intervene in local fiscal emergencies, in some cases curtailing decision‐making powers of local officials through the appointment of an emergency financial manager. Previous research has recognized that these managers can push through unpopular reforms that may improve financial health but come at the expense of local control and democratic accountability. We assess the financial outcomes after eight recent state takeovers relative to a matched counterfactual comprised of similarly distressed general purpose local governments. The staggered difference‐in‐differences analysis shows emergency managers improve budgetary solvency and increase fiscal reserves. These enhancements are achieved through significant reduction of general fund expenditures. Several long‐term indicators show deterioration in financial health after state intervention reflecting a significant decline in long‐term assets. Overall, municipalities subjected to a state takeover did not realize significant long‐run improvements in financial health indicators relative to counterfactual governments.

Effect of Debt Servicing on External Reserves in Nigeria

The management of Nigeria's external reserves, a key indicator of the nation's financial health and ability to withstand economic shocks, is at the centre of this economic investigation. This study investigates the effect of debt servicing on external reserves in Nigeria from the first quarter of 2010 to the first quarter of 2023. An ex post facto research design was adopted for the study. Quarterly time series data for external reserves, external debt servicing, and domestic debt servicing were collected from the Central Bank of Nigeria statistical bulletin and Debt Management Office reports. Philip Perron test was used to test the stationarity of the data and the ARDL test was utilized to determine the presence of a long-run relationship. The Fully Modified Ordinary Least Squares technique was used to test the effect of debt servicing on external reserves in Nigeria. The findings showed that external debt servicing and domestic debt servicing have a significant effect on external reserves in Nigeria. The study recommends that the Nigerian government through the Debt Management Office should emphasize diversification in acquiring external debts by engaging with multiple creditors, including multilateral institutions, bilateral partners, and global financial markets. Also, a strong emphasis should be placed on enhancing domestic revenue mobilization efforts. This can be achieved through fair and effective tax policies, reducing tax evasion, and promoting investments in sectors(like the finance sector)that yield sustainable revenue streams. Increased domestic revenue can alleviate the need for extensive domestic borrowing, thereby reducing the strain on external reserves for domestic debt servicing.