Financial Key Performance Indicators Research Articles

Unveiling the Financial Nexus: Exploring the Impact of CSR on Firm Performance in Mumbai-based Companies

“This research investigates the symbiotic relationship between Corporate Social Responsibility (CSR) practices and the financial performance of firms, focusing on a sample of 77 companies located in Mumbai, India. Employing statistical tools such as Smart PLS and SPSS, the study aims to unravel the intricate dynamics that link CSR initiatives to financial outcomes within the unique business landscape of Mumbai. Through a meticulous selection process, this research identifies and analyzes CSR practices across a diverse array of sectors in Mumbai, offering a nuanced understanding of how these initiatives translate into tangible financial benefits. The study employs Smart PLS and SPSS for a rigorous quantitative analysis, enabling a robust examination of the correlations between specific CSR activities and key financial performance indicators. By pinpointing the impact of CSR on profitability, shareholder value, and other financial metrics, this research provides actionable insights for firms seeking to align social responsibility with financial success. The Mumbai-centric focus offers a localized perspective on CSR, considering the socio-economic context of the region and its implications for corporate sustainability. The integration of Smart PLS and SPSS ensures a methodologically sound approach, enhancing the reliability and validity of the findings. The outcomes of this research contribute to the broader CSR literature while offering practical implications for businesses, policymakers, and investors in Mumbai and beyond. As the importance of CSR continues to grow, understanding its specific impact on financial performance becomes crucial for companies striving to thrive in a socially conscious business environment.”

Is it worth the hype? Influence of Artificial Intelligence efforts on key financial company metrics

Artificial Intelligence poses a consortium of multiple digital technologies able to perform tasks which were thought about that they can only be done by humans. To do so, it applies complex learning and decision-making processes based on analysis of structured and unstructured data. Currently, AI is assumed to have massive benefits in the areas of efficiency and performance of companies, although the impact on financial key performance indicators (KPI) is still unexplored. The underlying thesis of this research is that the financial impact of AI can already be seen in practice. The research question is whether there is an impact of company-driven AI efforts on financial KPI, like the return on assets (ROA) and the market capitalization.
 To obtain the intended results, a theoretical and empirical analysis was chosen as particular approach. Firstly, the existing scientific research is examined regarding already measurable financial impacts of digital technologies. In a second step, a regression model for panel data will be applied on a dataset containing financial data of the forty biggest German companies and their respective AI effort per year as a binary variable over a time period of seven years.
 As a result, a financial influence of AI cannot be verified yet on a statistically significant level. Despite of this, an increasing number of AI efforts over the last years can be confirmed.

Environmental Costs and Key Financial Performance Indicators of Oil Firms in Nigeria

This study examined the effect of environmental costs on the key financial performance indicators of oil firms in Nigeria. The study specifically examined the effect of environmental cost on the retained earnings, earnings per share and the return on asset of oil firms in Nigeria. A sample of three firms was selected out of a population of eleven oil and gas firms listed on the Nigeria Stock Exchange during the period. Secondary data were collected from the selected firms and analysed using multiple regression analysis. Findings of the analysis shows that environmental cost has a positive and insignificant effect on the retained earnings of oil firms in Nigeria. It was also observed that environmental cost has a negative and insignificant effect on the earnings per share of oil firms in Nigeria. The study equally revealed that environmental cost has a positive and significant effect on the return on asset of oil firms in Nigeria based on the findings, the study recommends that oil firms should adopt uniform reporting and disclosure standards of environmental cost for the purpose of control and measurement of performance. Firms (especially smaller ones), should be encouraged to disclose their environmental practices in their annual reports to enhance their competitiveness which would subsequently lead to high corporate performance. Top management should ensure that they comply with the environmental laws of the nation as it will go a long way in enhancing sustainability.

The Impact of Firm Size on Financial Decision-Making: Evidence from Ghana

The study's primary goal was to ascertain the influence firm size has on Ghanaian banks' financial decision-making. A quantitative technique was applied in the study. The study's secondary data came from the financial statements of five commercial banks. Ghana Commercial Bank, ADB Bank, SG-Ghana Bank, Zenith Bank, and Fidelity Bank. These commercial banks were chosen using a purposive sampling technique. A sample size of 50 was used to collect data for each bank from 2012 to 2021, yielding ten records for each bank. A double log panel regression model was used to analyze the relationship between financial decisions and some key financial performance indicators (KPIs), with the financial decision being the outcome variable whiles return on assets, leverage, total debt, total equity, firm size (Bank size) and time the predictor variables. The Haussmann test was then performed to select the most appropriate model for the banking panel data.
 Based on the test result (chisq = 2.6279, df=3, p = 0.4526), the FEM was selected. The results showed that return on assets had no significant relationship with financial decision-making. Leverage was found to be significantly related to financial decisions, but the influence was minimal. Firm size had the most influence on financial decisions and by far the most significant influence regarding which capital structure to maintain as a bank. Total debt played a significant positive role in financial decisions. The higher the total debt, the more debt the banks tended to take on. As a response, the study proposes that Banks relying on internal funds to finance their operations must do so efficiently and effectively to derive the benefits associated with firm size. On the other hand, banks relying on debt financing must do so with caution since there is the risk of interest escalating in the current economic climate.

Effect of Bank Ownership on the Relationship between Credit Risk and Financial Performance of Commercial Banks in Kenya

Commercial banks in Kenya have faced daunting challenges that touch on various key financial performance indicators and therefore impacting on performance. Credit risk affects the key financial indicators that are likely to impact performance of any lending institution. The main goal of this study was to ascertain the moderating effect of ownership structure on the relationship between credit risk and financial performance of Commercial banks in Kenya. Longitudinal research design was utilized on data from 41 licensed banks in the country. The study relied on secondary panel data and multiple regression was used and analysis was through STATA analytical tool. The study established that bank ownership has a significant effect on the financial performance. The outcome of the study demonstrates that a more diversified ownership structure is helpful in improving bank’s financial performance. Introduction of ownership structure has added knowledge by demonstrating that the link between credit risk and financial performance cannot be studied in isolation.

Pre-IPO Financial Performance and Offer Price Estimation: Evidence from India

The primary focus of this paper is to develop an empirical model to study the relationship between key Financial Performance Indicators and IPO Offer Prices. It seeks to assist Indian IPO investors to make more informed decisions by advancing their knowledge about relevant Pre-IPO Financial Performance Indicators that are effective predictors of Offer Price. The purpose is this study is to provide all the stakeholders with an approach to evaluate the Offer Price of IPOs. This will help the stakeholders to overcome pricing anomalies. The companies listed in the National Stock Exchange of India between the financial years 2015–2016 to 2020–2021 are taken as the sample of the study. The secondary data are analyzed by constructing a multiple linear regression model. This study uses a range of fundamental factors related to financial performance in a single framework to demonstrate that an IPO Offer Price can be assessed by its Pre-IPO Financial Performance. The findings of this study validate the objectives of the model constructed. This research shows that the Pre-IPO Financial Performance has an influential role in explaining the IPO offering price. The results of the study show that variables such as Net Asset Value (NAV), Return on Assets (ROA), Profit after Tax (PAT), and Return on Net Worth (RONW) have a substantial impact on IPO Offering Price. The findings of the research will assist IPO issuers in pricing their offerings better and more competitively. Furthermore, this study will also minimize the gap between offering and listing prices to prevent speculative failure. The study will help investors with minimal resources to evaluate the value of any IPO issue. An IPO’s value can be fairly estimated, and investors can decide whether the issue is worth investing in or not.

Improvement of Key Financial Performance Indicators in the Insurance Industry Using Machine Learning – A Quantitative Analysis.

AI and Machine learning are playing a vital role in the financial domain in predicting future growth and risk and identifying key performance areas. We look at how machine learning and artificial intelligence (AI) directly or indirectly alter financial management in the banking and insurance industries. First, a non-technical review of the prior machine learning and AI methodologies beneficial to KPI management is provided. This paper will analyze and improve key financial performance indicators in insurance using machine learning (ML) algorithms. Before applying an ML algorithm, we must determine the attributes directly impacting the business and target attributes. The details must be manually mapped from string values to fit the model and its required datatypes for applying these specific features to an ML model. We propose hashing to convert string values to numeric values for data analysis within our model. After the string values are hashed, we can introduce our model. In our case, we have chosen to use a decision tree model. Decision Trees are beneficial for this use case as this algorithm generates rulesets that govern the target value output. These rulesets can then be applied to the financial dataset and infer the “best fit” value that might be wrong/missing. Finally, because of the model, we can use this most accurate data version to detect general ledger transactional data patterns.

МЕТОДИКА СКЛАДАННЯ ЗВІТУ ПРО УПРАВЛІННЯ: ЗАКОНОДАВЧІ РЕАЛІЇ ТА ПЕРСПЕКТИВИ УПРОВАДЖЕННЯ

The legal grounds for submitting a management report appeared in the autumn 2017 when amendments to the Law of Ukraine “On Accounting and Financial Reporting in Ukraine” No. 996 dd. 16th of July, 1999 were adopted. The definition of the management report also appeared there. The drawing up and submitting procedures for management reports for all business entities were developed by the Ministry of Finance of Ukraine, while those for banking institutions were developed by the National Bank of Ukraine. The management report is also referred to in the Financial Statements Submitting Procedure (Resolution of the Cabinet of Ministers of Ukraine dated 28th of February 28 2000 No. 419), however, according to this regulation, the Management Report is not part of the financial statements, which is stated explicitly in the text of par. 2 of Procedure No. 419. It is only submitted “together with the annual financial statements.” In case of the consolidated reporting, a consolidated management report is to be submitted. European accounting and financial reporting standards imply that financial reporting cannot provide all the necessary information to interested users about the company’s activities. Therefore, the purpose of the management report is to fill this gap and provide information about the performance that cannot be obtained from financial statements and notes thereto. This can be financial information – analysis of company indicators and existing risks, achievement of key financial performance indicators, forecast of financial indicators; and non-financial information – creation of a new product, expansion of sales markets, community and environmental activity, protection of human rights, research and development, achievement of key non-financial performance indicators, description of the company's development prospects, etc. Therefore, the appearance in the legal space of the concept of the Management Report in the domestic reporting practice is not a whim of the national legislative and regulatory bodies, it is most likely a consequence of the adaptation of the domestic laws to the European regulations. It is supposed that the management report cannot be considered purely an “accounting report”, because other company employees and even external consultants can and should be involved in preparation of the management report. Today, the form, structure, methods of submitting information, detailed content and scope of the management report are not regulated by any governmental authorities, so compiling of a management report can be considered quite “creative”. According to the authors, it should be regarded more as a reputation business card of the company, rather than an official report. The authors have performed a critical review, analysis and systematization of the legislative basis for the implementation of the management report; the results of the search for unified informational and methodological approaches for implementation of the legislative basis in the accounting and analysis regarding the preparation of the company's reporting, in particular, nonfinancial reporting, are presented.

THE ROLE OF KEY FINANCIAL PERFORMANCE INDICATORS IN INVESTMENT DECISION

The preliminary review of the financial reports of the banks listed on the Iraqi Stock Exchange reveals the existence of an untapped cash block that is reflected in the Key financial performance indicators (Financial KPIs). The study discusses the fact that the Financial KPIs of the banks listed in the Iraqi Stock Exchange are among the factors that have a role in the decision to buy bank shares by investors. Therefore, the study aims to test the role of the Financial KPIs represented by financial leverage, liquidity, capital adequacy and profitability in the decision to purchase bank shares by investors, by testing the strength and direction of the relationship and testing the impact size of the Financial KPIs in the decision to purchase bank shares by investors of a sample of commercial banks listed in the Iraq Stock Exchange (the regular market) amounted to (10) banks for the period (2016-2020). Among the most important conclusions reached by the study, there is no role for indicators of liquidity, capital adequacy and risk in the investment decision. The role of debt indicators is not important in the investment decision. There is a role for profitability indicators in the investment decision. KEYWORDS: debt indicators, Liquidity Indicators, Capital adequacy, Profitability Indicators

Combining the Use of Data Analytics and Balanced Scorecard to Enhance Healthcare Delivery: A Study

In recent years, there has been a tremendous leap in the usage of data in its different forms. Big data has grown exponentially and so have the tools that enable culling out meaningful data that have the potential to transform business establishments. Tools that make use of big data like Cloud Computing, Data Warehousing, Dashboards and Mobile Apps have found application in several fields including healthcare. These applications provide real-time data to aid business establishments in making timely decisions. However, data need to be presented in an appropriate format like ones shown in the balanced scorecard (BSC) which has undergone a number of refinements since the 1990s. Since the BSC includes the provision of both financial and non-financial key performance indicators (KPI), it serves the long-term interests of an organisation. The efficacy and profitability of the BSC can be scaled up with the aid of data analytics which provides all inputs for a decision support system. This article explores the various possibilities of using data analytics in providing and updating meaningful inputs to each of the perspectives of the BSC to enhance healthcare delivery.

Оценка привлекательности российских и западноевропейских зеленых облигаций

More and more companies in Western markets provide potential investors with an instrument to attract debt financing called “green bonds”. In recent years, a significant rise in demand for this type of securities is observed in Western stock markets; Russian investors also demonstrate interest in them, which makes issues of evaluating green bonds and comparing their investment attractiveness with the attractiveness of traditional bonds topical ones. The paper gives the assessment of attractiveness of green bonds both of Russian and Western European issuers and compares green and traditional corporate bonds from the point of view of a potential investor. The authors analyzed key financial performance indicators of green bonds: a coupon size, yield to maturity, and duration; assessed alternative costs of holding green bonds (bank deposit for the period of more than one year is considered an alternative variant of investment). Based on the results of the work, the authors conclude that, in general, non-green bonds today are more attractive for an investor; however, green bonds have an advantage in view of nominal coupon profitability. High duration is a distinctive feature of green bonds: the average due date of return of investments of green bonds is close to the maturity date, while traditional bonds have the duration much less than the term to their maturity. Therefore, one can note the heightened risks of inability to perform green bonds payments. In the Russian Federation, it is possible to partially eliminate specified risks through the government support of green projects.

ПОКАЗАТЕЛИ ЭФФЕКТА И ЭФФЕКТИВНОСТИ РАБОТЫ ИТ-ПОДРАЗДЕЛЕНИЯ

The article proposes an approach to building performance management models for IT departments. The transition from classical financial key performance indicators to indicators of optimization of cost and time parameters is substantiated, taking into account the specifics of the organization of production of IT solutions and systems. The applicability of indicators of achievement of efficiency, their influence on the motivation of employees of departments was analyzed. A methodology for developing a model for managing the effectiveness of an IT department is presented. The issues of implementation of models and their improvement are considered, taking into account the analysis of the practical experience of Russian companies.

Modelling and Simulating Dynamics Efficiency of Rural-Community Banks (RCBs) in Ghana

The present work seeks to develop a model for measuring efficiency of RCBs in Ghana by means of financial key performance indicators pairing macroeconomic indicators. A stochastic differential equation model for predicting the efficiency of RCBs in the future is developed and simulated using gaussian jumps to evaluate the models’ performance in unpredicted situations with four distinct phases of efficiency. Unique solution Exit multiple 4-dimensional stochastic differential equations and Macroeconomic model is proven to be the best-fitting model for the data with the lowest information criterion.

Performance measurement in a “hidden champion” company: An empirical study

The purpose of the paper is to review and evaluate the performance of a specific type of globally successful innovative company introduced to scientific literature as “hidden champion” by Simon (1990), using a combination of traditional financial key performance indicators (KPIs) with the modern evaluation method of the European Foundation for Quality Management (EFQM) model. The results showed that there are many areas in the selected company where EFQM allows building an effective management system, applied as a benchmarking tool for using the experience of leading companies. The joint utilisation of the KPIs and the EFQM model helps to create an objective picture and evaluate the organization in a relatively complex way. This paper provides in-depth insights into the application of new models in practice that are still scarce and may serve as a base for further research realized on larger samples. This work shows for the first time the application of EFQM commonly used in large organizations, for the special category of small and medium-size enterprises (SMEs) companies called “hidden champions” (HCs). In general, there is a lack of studies in domestic literature devoted to the concept of “hidden champions”. This paper contributes to this field from the perspective of quality management, and it provides also valuable insight for practice.

The Impact of Feminine Management on Banks Financial Performance: Evidence from Selected Countries from Europe

Abstract The main purpose of this paper is to fill the gaps in the literature regarding the main determinants of banking system performance. Thus, we studied the banking systems of some EU member states by analyzing the links and influences of women's involvement in the top management team (TMT) on economic performance. We studied the impact of gender diversity (especially the variation of women's involvement in top management) on financial key performance indicators (KPIs) for 134 selected banks from 8 countries, a total of 1060 firm-years, based on data obtained from Bureau van Dijk (BvD) Orbis and World Bank Database. We estimated for each country a regression model, using PLS (panel least squares) empirical setup, based on unbalanced panel data for period 2009-2019. We've determined statistically significant links between the presence of women in the top management team and and the banks' financial KPI (ROA, ROE and NPL). However, we found clues that there is a level of femininity at which there’s an inflection point in terms of the influence on defined KPIs. The empirical results contribute on the literature regarding gender segregation and economic performance of banks, concluding that a more gender-balanced TMT can generate superior banking outcomes.

The Importance of Financial Metrics in Physician Funding and Performance Evaluation.

Financial key performance indicators are often used to evaluate performance. Understanding of key performance indicators can be crucial for career advancement and bargaining leverage in resource negotiations. This study aimed to identify the most important key performance indicators used in surgical funding requests and understand how to use these metrics in clinical practice. In two tertiary medical centers, funding requests for surgeon gap support (2019 to 2020) and equipment (2017 to 2019) within departments of surgery were reviewed. The requesting department, approval status, and amount allotted were recorded. In requests for gap support, projections for contribution margin, operating room volume, charges, collections, and relative value units were tracked. Projected contribution margin and cost savings were recorded for equipment funding requests. There were 40 gap support and 24 equipment requests, and all were approved. Most gap support requests included collections (90.0 percent), charges (87.5 percent), operating room cases (80.0 percent), relative value units (77.5 percent), and hospital contribution margin (77.5 percent). The most represented departments were general surgery (37.5 percent), neurosurgery (22.5 percent), and plastic surgery (15.0 percent). The departments that submitted the most equipment requests were general surgery (28.0 percent) and neurosurgery (28.0 percent). Most requests included projections for contribution margin (95.8 percent) and cost savings (87.4 percent). Projected hospital contribution margin correlated with the amount of funds allotted for surgeon support (r = 0.409; p = 0.022). This multicenter study identified the importance of using key performance indicators for a successful financial outcome in funding requests. In addition, the authors demonstrate the need for surgeons to understand their own key performance indicators. Surgeons should advocate for increased transparency to better understand their financial contributions and performance.

Using accounting ratios to measure construction industry lag

Purpose The apparent lag between macro-economic behavior and financial implications in the construction industry is yet to be examined. The purpose of this paper is to understand the nature of the lag and the relationship between economic changes from year-to-year and the impact on the financial status of construction companies. Design/methodology/approach Correlation was made between US economic growth and construction industry financial indicators over a 28-year period. Cumulative per cent growth in US GDP was considered an independent variable, while nine financial ratios were calculated and considered dependent variables in this study. Findings The results of this study found that correlation improved when considering lag of two, three or sometimes four years after the economic event. Some financial ratios proved more sensitive than others, supporting the hypothesis of this study. Research limitations/implications The practical application of this study for construction companies is to understand how the construction industry lag impacts financial behavior. It therefore informs managerial decisions related to solvency, liquidity, equity structure and managerial practices; all of which are measured by financial ratios. Practical implications This study was intended to advance the research in this area and also to serve to strengthen industry members in their financial management of construction companies. Economic dynamics have long-lasting implications, which can be addressed through an increased focus on managing financial health. Originality/value Though the lag is intuitively known and has been studied from market perspectives, there is a lack of empirical study evaluating the impact of lag on financial key performance indicators.

Non-financial key performance indicators: regulations and guidelines versus business practice

According to Directive 2014/95/EU, large public interest entities (PIEs) must disclose, i.a., a description of their business model, policies regarding environmental, social and employee matters, as well as non- financial key performance indicators (KPIs). The aim of the paper is to identify the practices of large PIEs operating in Poland as regards non-financial KPIs disclosures and to recognize any regularities among them. Our sample consists of 169 public companies that are required to provide non-financial dis-closures according to the Act on Accounting. The data was hand-collected from non-financial statements (reports) in 2019. The main research method is content analysis. The data was examined using cluster analysis. Research findings indicate that although companies present KPIs in a very diverse way, some regularities can be observed. Two groups of PIEs have been identified: (1) those that reveal KPIs on oper-ational and social activities, and (2) those that report environmental and employee indicators. Further analysis made it possible to identify companies that focus on reporting KPIs on (1) the environment, (2) operating activities, and (3) with generally moderate disclosure levels of non-financial KPIs in operational, environ-mental, and social areas. The results of the research increase knowledge in the field of reporting of non-financial information by large PIEs and are of practical importance for companies themselves, as well as for institutions and organizations which deal with corporate reporting in Poland.

Development of a conceptual life cycle performance measurement system for build–operate–transfer (BOT) projects

PurposeThe purpose of this paper is to develop a new conceptual life cycle performance measurement system (PMS) based on stage level key performance indicators (KPIs) to measure the performance of build–operate–transfer (BOT) projects.Design/methodology/approachThis study uses a literature review to reveal the deficiencies of existing PMSs for public–private partnership (PPP) projects. Based on these deficiencies, four recommendations were proposed for developing a PMS. The validation of these recommendations was performed via focus group discussion sessions conducted with 12 experts. Then, a conceptual framework was developed based on the validated recommendations and the additional recommendations emerged during focus group discussions. Finally, the recommendations proposed by the focus group were tested by a questionnaire survey, the findings of the Friedman test and descriptive analysis validated these recommendations.FindingsFindings of the focus group discussion, Friedman test and descriptive analysis indicated that the PMS should have four crucial features to develop an efficient, effective and comprehensible PMS for the BOT project. Firstly, non-financial and financial KPIs should be integrated. Secondly, the PMS should be developed as a process-based system with stage level KPIs. The performance of the BOT projects should be monitored and reviewed continuously, however the most important KPIs should be used for continuous performance measurement to increase the applicability of the system and allocate the resources more efficiently.Research limitations/implicationsThis survey was conducted on experts who have experience with BOT projects located in Turkey, therefore, judgments of experts might be affected by external factors specific to Turkey such as geopolitical situations, investment environment. However, due to the nature of BOT projects, the experience of experts can also be utilized at the international level.Originality/valueThis is the first time a PMS has been developed to measure the performance of a BOT project. In addition, this system has unique features when compared with the PMS proposed in the literature. Especially, the stage level KPIs and continuous performance measurement with the most important KPIs throughout each stage has never been used. This research provides both public sector and private entities with an insight into effectively measure, control and manage their BOT infrastructure projects' performances throughout their life cycles.

E-Payment System and Financial Performance of Telecom Companies in Rwanda: Case Study of MTN Rwanda MOMO Service

The purpose of the study was to investigate the impact of e-payment system and financial performance of telecommunication companies and the study carried out in MTN Rwanda, MOMO service. E-payment system as independent variable and financial performance as dependent variable. This study has the following specific objectives: To examine the money transfer services on financial performance of MTN Rwanda; to evaluate the financial key performance indicators of MTN Rwanda; to investigate the e-payment services on the financial performance of MTN Rwanda; to assess the role of mobile banking on financial performance of MTN Rwanda between 2016 and 2019; and to establish the relationship between e-payment system and financial performance. The study shows findings shows that 31 (53.4%) of Respondents strongly agreed that sending and receiving money between two subscribers of MOMO service highly affect profitability Ratio of MTN Rwanda. It Indicates that 26 (44.8%) of Respondents strongly agreed that buying airtime with MOMO service affect an increase in Sales volume of MTN Rwanda. It indicates that 27 (46.6%) of Respondents strongly agreed that paying TV with MOMO service positively affect long term investment of MTN Rwanda. It indicates that 32 (55.2%) of Respondents strongly agreed that depositing and withdrawing money on bank account with MOMO service highly affect profitability Ratio. The findings prove that there is a positive correlation between money transfer services and long term investment (p=.774 and sig=.000); between payment and profitability (p=.972 and sig=.000); between mobile banking services and improved sales volume (p=.866and sig=.000); between money transfer services and payment services (p=.785 and sig=.000); between payment service and mobile banking services (p=.781 and sig=.000); long term investment and profitability (p=.986 and sig=.000). Hence, the results indicate that e-payment systems have a positive and significant relationship with financial performance of MTN Rwanda MOMO services. Keywords: E-payment, Money transfer, Mobile banking, Mobile money, financial performance DOI: 10.7176/JESD/11-16-18 Publication date: August 31 st 2020