Financial Leverage Ratio Research Articles

Pengaruh Leverage dan Sales Growth Terhadap Financial Distress dengan Profitabilitas Sebagai Moderasi

The transportation sector in Indonesia is one of the important sectors supporting the national economy. This sector consists of a variety of companies and has great potential for development. This research is based on the problem of decreasing demand due to restrictions on mobility and economic activity due to the pandemic. Causing a decrease in revenue and profits for transportation companies which can increase the risk of financial distress. This research uses financial leverage ratio calculations with DER (Debt Equity Ratio) and Sales growth to determine the effect on financial distress calculated using ICR and the role of profitability with ROA (Return On Assets) as moderation. The method used in this research is descriptive methods with a quantitative approach. Research on the transportation sector listed on the BEI in 2022. The research population was 49 companies with a sample of 41 companies. The financial distress method used is to calculate the ICR ratio (Interest Coverage Ratio) which is symbolized by a dummy. Data analysis uses multiple linear analysis and Moderating Regression Analysis (MRA) with the SPSS 26 application. Based on the research and discussion that has been carried out, the research results can be concluded that leverage has an effect but is not significant on financial distress. Sales growth has an effect but is not significant on financial distress. Profitability is able to moderate the relationship between leverage and financial distress and sales growth with financial distress.

The importance of financial ratios in determining profit distribution policies for a sample of Iraqi banks

This study aims primarily to demonstrate the importance of four types of financial ratios, namely profitability ratios, turnover rates, activity cost ratios, and financial leverage ratios, as well as to explain their impact on cash dividend distribution policies for a sample of Iraqi banks traded on the Iraqi Stock Exchange for the period (2010 - 2017). The number of banks was chosen from the Iraq Stock Exchange (13 banks), and the data for the aforementioned time period was taken according to the bulletins and financial statements issued by the official website of the market. After conducting statistical analysis of the data using the statistical package program (SPSS), where the sample size used was (104) observations, and the number of independent variables was (9), which represent the financial ratios, it was found that there is a significant impact of these financial ratios on determining profit distribution policies, and the study recommended to the specialists In the financial field, using these ratios and focusing on them in the financial analysis aspect.

What Kind of Cycle Do Seasoned Equity Offerings Create on The Company's Financial Structure? BIST Application with Panel ARDL Error Correction Model

This study examines the effects of fundamental public offering indicators in seasoned public offering companies on current ratio, return on equity and financial leverage ratio in the long and short term. For this reason, the Panel ARDL error correction model was applied by using the data of 40 stocks between 2005-2022. The analysis results are consistent with the literature, and it is found that the degree of financial leverage decreased and liquidity increased after the public offering; it was emphasised that this financial recovery has regressed in the long term. In this context, a perspective supporting the literature within this spectrum could be presented about the effects of fundamental public offering indicators on the current ratio, return on equity and financial leverage ratio in seasoned public offering companies in the long and short term.

Diagnostics of equity and debt capital of agricultural organizations

Diagnostics of equity and debt capital allows the manager and owners of the enterprise to identify the main indicators in the structure of capital, to assess their impact on the financial condition of this enterprise and its activities, as well as to analyze how effectively the enterprise uses capital. The structure and dynamics of equity and debt capital is the most significant indicator that determines the financial condition of the enterprise. In order to improve the efficiency of equity and debt capital, the authors identified the main factors that affect the financial profitability of own funds and the efficiency of the use of borrowed capital. When calculating the optimal capital structure for each agricultural organization of the Penza region, depending on different approaches to asset financing, the modeling of the optimal capital structure was carried out. On this basis, using the normative value of the financial leverage ratio for each agricultural organization of this group, the effect was determined. The form of internal reporting «Report on the diagnostics of equity and debt capital» was proposed for the comprehensive presentation of the obtained results within the framework of the diagnostic survey.

The Relationship Between Leverage Ratio Change and Economic Growth Rate in That Development of Financial Market

The relationship between the change of leverage ratio and economic growth rate in financial markets has always been the focus of economists, policy makers and market participants. The goal of this paper is to deeply study how the fluctuation of leverage ratio affects the economic growth rate and explore the complex mechanism of this relationship. Based on the previous theoretical research on leverage ratio and economic growth, this paper shows that excessive financial leverage ratio will not only lead to economic decline, but also cause financial turmoil through the Pearson correlation research between financial leverage ratio and economic growth. The change of leverage ratio has an important impact on economic growth, but this impact is diversified and complex. A deep understanding of the relationship between leverage ratio and economy is very important for maintaining the stability of financial markets and sustainable economic growth, especially in the ever-changing global financial environment. This requires the joint efforts of policy makers, regulators and market participants to ensure the effectiveness and sustainability of leverage ratio management.

İklim endeksine dahil olmanın finansal performans üzerindeki etkisi: Garanti BBVA iklim endeksi örneği

In order to raise attention to global warming around the world, the sustainability index has started to be traded in the field of finance in parallel with the regulations in many fields. This study examines the impact of being included in the Garanti BBVA climate index on firms' financial performance. The financial performance of companies included in the climate index was analyzed, taking into account the period in which they were included in the index. The dependent variables in the study are Tobin's Q and Market Value/Book Value (MV/BV). Financial risk, leverage ratio, growth rate, current ratio, and credit risk are used as control variables, while profit for the period and firm size are included in the model as independent variables. The study is analyzed using System GMM and robust Driscoll-Kraay estimator using quarterly data for the period 2017/1-2022/3. As a result of both analyses, it is concluded that leverage ratio and profitability variables positively affect firm performance.

Financial Leverage and its Impact on Share Value in Commercial banks "Citigroup Bank as a Model for the Period 2000-2022"

Background: The financial leverage, which is called financing by indebtedness or financing by borrowing, which is done by borrowing or issuing indebtedness instruments such as bonds and other financial instruments, is complementary to financing by ownership, which consists of shareholders’ funds and the issuance of shares, so that the financial structure in companies consists of “ownership and indebtedness.”
 Materials and Methods: The bank's financial leverage was measured through the use of a number of financial ratios, including total liabilities to total assets and total liabilities to total equity, and its impact on the value of the share was measured by using the SPSS program.
 Conclusions: The results showed that there is a positive correlation between the financial leverage ratios and the value of the share. The value of the share was affected by the mortgage crisis of 2007-2008 AD, as it began to decline in 2007 AD from $359.60 to $29.79 in 2009 AD. From research and study, we find, in addition to the effect of financial leverage, the existence of More than one effect on the stock value.

Corporate financing policies, financial leverage, and stock returns

We examine the interaction between equity returns and firms’ financing policies in a stochastic Ramsey model with heterogeneous firms. Motivated by empirical evidence, firms maintain stationary financial leverage ratios by issuing debt. We present a novel closed-form solution to this class of models and, subsequently, use this solution to show that restricting firms’ financing policies can explain various stylized facts of both the dynamic as well as the cross-sectional behavior of equity returns. Our restrictions induce persistent and countercyclical heteroskedasticity in returns, predictability by dividend–price ratios, a security market line that is “too flat”, and mean-reverting CAPM betas that correlate with leverage. Our model explains both established as well as recent empirical evidence, but challenges recent theoretical macro-finance explanations of the link between capital structure and equity returns.

Comparison of the Efficiency of Overcoming the Crisis of Russian and Foreign Oil and Gas Companies

The purpose of the study was to evaluate the performance of large domestic and foreign oil and gas companies based on a factor analysis of the return on equity in the context of financial and economic crises. The relevance of the topic is due, on the one hand, to the leading role of the oil and gas industry in the Russian economy, and, on the other hand, to the need develop modern tools for the assessment and prediction of the performance of companies and comparison of the results of economic activity with those of foreign competitors. The object of the study was the financial performance of the largest domestic and foreign vertically integrated oil and gas companies. The subject of the study is the methods of deterministic factor analysis for assessing indicators in the oil and gas sector. The paper analyzes the main empirical indicators that reflect the degree of efficiency, justifies the choice of the profitability indicator of own assets as the main indicator for research in the oil and gas industry, analyzes approaches to assessing the contribution of various factors to the final efficiency. Methods of classification, decomposition, statistical, comparative and factor analysis were used. A five-factor DuPont decomposition of the return on equity was carried out, and the key factors affecting the efficiency of companies were identified: tax burden coefficient, percentage burden coefficient, return on sales, asset turnover ratio, financial leverage ratio. Using the LMDI‑1 model, the impact of changes in economic factors on changes in the efficiency of companies in 2013–2017 and 2018–2021 was assessed. It was concluded that domestic companies, on average, slightly outperformed foreign ones in terms of the considered efficiency indicator and coped better with the consequences of financial and economic crises in the periods under review. At the same time, domestic companies have a higher value of the tax burden coefficient with lower values of assets turnover and financial leverage.

PENGARUH STRUKTUR MODAL TERHADAP KINERJA KEUANGAN (Studi Pada Perusahaan Manufaktur Sub Sektor Makanan Dan Minuman Yang Terdaftar Di Bursa Efek Indonesia Priode Tahun 2016-2020)

The source of data used in this study was secondary data. Twenty companies were selected using the purposive sampling technique. The data collection technique used in this study was the documentation method derived from the Indonesian Stock Exchange (IDX) gallery from 2016 to 2020. The data analysis was carried out by applying panel data regression (pooled data) technique. The result of this study found that 1) Self-financing Ratio (E/C), Financial Leverage Ratio (LR), Long-term Asset Ratio (LAR) had a negative and significant effect on Financial Performance, 2) Debt-to Assets Ratio (DAR) had a positive and significant effect on Financial Performance, 3) Financial Assets to Total Assets had a positive and insignificant effect on Financial Performance.

The effects of leverage on profitability in Vietnamese shipping listed companies

In order to identify whether “The financial leverage has an impact on the profitability of shipping enterprises or not?” we will have recommendations, to ensure financial safety and sustainable development for shipping enterprises. This research uses the generalized least squares method (GLS) to verify the relationship between the finance's leverage (DA) and the operating performance (ROA). Panel data from 25 listed companies on 3 stock exchanges in Vietnam, namely HOSE, HNX, and UPCoM, which are operating in shipping, from 2014 to 2022. The variables of this paper are return on assets (ROA), total debt to total assets (DA), company size (SIZE) and company growth (GROWTH), intangible fixed assets (INTANG), and short-term assets/short-term earnings (LIQ). Research results show that the ratio of financial leverage has a negative relationship with ROA, and if a business uses more debt, it has bad results in its business performance. In addition, long-term businesses will have a higher financial leverage ratio.

Avrupa’da Faaliyet Gösteren Havayolu İşletmelerinin Finansal Performans Analizi: CRITIC Temelli MAUT ve MARCOS Yöntemleri

This paper aims to measure the financial performance of 6 airline operators operating in Europe between the periods of 2019-2021. For performance measurement, 8 financial criteria were used: current ratio, cash ratio, financial leverage ratio, equity multiplier, asset turnover rate, equity turnover rate, return on equity and return on assets ratio. For the analysis of these criteria, the importance levels of the criteria related to the CRITIC method, one of the MCDM methods, were determined. At the same time, with the MAUT and MARCOS methods, the financial performance ranking of the airline enterprises was obtained according to the relevant years. According to the findings of the CRITIC method; It was determined that asset turnover rate in 2019 and financial leverage ratio criteria in 2020 and 2019 were the most important criteria. As a result of the MAUT method, it was concluded that the airline with the best financial performance in 2019, 2020 and 2021 was Air France. According to the findings of the MARCOS method, the airline with the highest financial performance in 2019 was Pegasus Airlines and in 2020 and 2021 it was determined as EasyJet.

Investigation of the Relationship between Corporate Governance and Capital Structure in Insurance Companies with Panel Regression Analysis

Corporate governance principles in a company consist of fairness, transparency, accountability
 and responsibility. Companies with fully implemented corporate governance principles are expected
 to reduce costs and increase corporate value. It is believed that increasing corporate value can be achieved
 by minimizing the cost of capital. When examined from these aspects, the value of the enterprise
 can be increased by reducing capital costs with corporate governance principles in this study, the
 relationship between the corporate governance of insurance companies and their capital structures
 has been examined. Financial indicators of insurance companies traded in Borsa Istanbul from 2014
 to 2021 are used as data. The financial leverage ratio (total debt/total assets) is considered as the dependent
 variable and the proportion of foreign members, the proportion of female members, and the
 proportion of independent members as dependent variables are considered as independent variables
 in the study. Panel regression analysis was applied as the evaluation method, and it was seen that the
 ratios of foreign members, independent members and female members positively affected the capital
 structure. It has also been observed that the variable that most influences the capital structure is the
 proportion of foreign members.

PENGARUH RASIO FINANCIAL LEVERAGE DAN LIKUIDITAS TERHADAP PROFITABILITAS PERUSAHAAN SEKTOR MANUFAKTUR PERIODE 2019-2021

This thesis discusses the effect of financial leverage and liquidity ratios on company profitability. This type of research is quantitative research with hypothesis testing. The research sample is the financial statements of 30 manufacturing sector companies listed on the Indonesia Stock Exchange for the 2019-2021 period. The source of research data is secondary data obtained from the official website of the Indonesia Stock Exchange, namely www.idx.co.id. The data
 analyzed are profitability (variable Y) using Return On Asset (ROA) analysis, financial leverage variable (variable X1) using Debt to Asset Ratio (DAR) analysis, and liquidity variable (variable X2) using Current Ratio (CR) analysis. The results of the research that tested the hypothesis obtained data: (1) The financial leverage ratio (DAR) has a negative and significant effect on the profitability (ROA) of manufacturing sector companies on the Indonesia Stock Exchange for the period 2019-2021; (2) The liquidity ratio (CR) has a positive and significant effect on the profitability (ROA) of manufacturing sector companies on the Indonesia Stock Exchange for the period 2019-2021; (3) The ratio of financial leverage (DAR) and liquidity (CR) simultaneously has a positive and significant effect on the profitability (ROA) of manufacturing sector companies on the Indonesia Stock Exchange for the period 2019-2021.

An Assessment of Starbucks' Profitability Through Financial and Operational Strategy

The market was economically weakened as a result of covid-19. Starbucks has long had a considerable market share in the coffee industry, particularly in the United States. Therefore, this article will examine Starbucks' profitability and provide insight into the aspects that influence Starbucks' profitability. Some models will be used to analyze this, including earnings per share, P/E ratio, dividend payout ratio, return on assets, operating margin, sales profit margin, fixed asset ratio, financial leverage ratio, sales to equity ratio, and expense revenue ratio. This article will use the SWOT model to analyze the internal and external influences and the strengths and weaknesses of Starbucks in the market. Based on the analysis, while Starbucks has a huge market share and a great brand image, the pricey product can be a disadvantage during economic downturns. Starbucks' new approach to expanding into new markets will help to counteract the negative image of self-erosion in its primary US coffee market due to overcrowding. This article will explain why it was decided to invest in Starbucks as a corporation. This paper will provide some insight into the operational strategy and profitability of existing competitors to companies wishing to enter the coffee market.

PENGARUH RASIO FINANCIAL LEVERAGE DAN LIKUIDITAS TERHADAP PROFITABILITAS PERUSAHAAN SEKTOR MANUFAKTUR PERIODE 2019-2021

This thesis discusses the effect of financial leverage and liquidity ratios on companyprofitability. This type of research is quantitative research with hypothesis testing. The researchsample is the financial statements of 30 manufacturing sector companies listed on the IndonesiaStock Exchange for the 2019-2021 period. The source of research data is secondary data obtainedfrom the official website of the Indonesia Stock Exchange, namely www.idx.co.id. The dataanalyzed are profitability (variable Y) using Return On Asset (ROA) analysis, financial leveragevariable (variable X1) using Debt to Asset Ratio (DAR) analysis, and liquidity variable (variableX2) using Current Ratio (CR) analysis. The results of the research that tested the hypothesisobtained data: (1) The financial leverage ratio (DAR) has a negative and significant effect on theprofitability (ROA) of manufacturing sector companies on the Indonesia Stock Exchange for theperiod 2019-2021; (2) The liquidity ratio (CR) has a positive and significant effect on theprofitability (ROA) of manufacturing sector companies on the Indonesia Stock Exchange for theperiod 2019-2021; (3) The ratio of financial leverage (DAR) and liquidity (CR) simultaneouslyhas a positive and significant effect on the profitability (ROA) of manufacturing sector companieson the Indonesia Stock Exchange for the period 2019-2021.

Analysis Leverage to Anticipate The Risk of Financial The National Life Insurance Company

This study aims to (1) analyze the condition of the application of financial leverage and operational leverage of PT. Asuransi Jiwa XYZ; (2) analyze the impact of the condition of applying financial leverage and operational leverage on the company's financial risk. This research method uses a quantitative descriptive method with a case study approach at PT Asuransi Jiwa XYZ. The type of research data used is secondary data, namely quantitative data in the form of financial report data for 2018-2020 obtained from the company's website. Data analysis techniques are performed by calculating financial leverage ratios and operational leverage, then interpretation is carried out. Then an analysis of the impact of the condition of the company's leverage on its financial risk is carried out. The results achieved are that in general financial leverage and operational leverage indicate poor performance. Meanwhile, the impact of financial leverage and operational leverage on the company's financial risk also indicates poor performance, this is possibly due to the impact of the Covid-19 pandemic which has hit the country and even the whole world. However, data from the previous two years had shown indications of a significant decline in the company's financial performance.

THE IMPACT OF KEY AUDIT MATTER REPORTING ON AUDIT QUALITY: EVIDENCE FROM TURKEY

Bu çalışmanın amacı denetçi raporunda kilit denetim konularının raporlanmasının denetim kalitesiüzerindeki etkisinin incelenmesidir. Bu amaç için Borsa İstanbul’da 2017-2020 yılları arasında işlemgören 217 şirket analizde kullanılmıştır. Analizde kullanılan değişkenler, literatürdeki çalışmalardanseçilmiştir.Denetim kalitesi ile kilit denetim konuları raporlaması arasındaki ilişki Düzeltilmiş Jones Modelikullanılarak analiz edilmiştir. Bunun yanında denetim kalitesi ile ilgili diğer değişkenler de analizedahil edilmiştir. Çalışmada, kilit denetim konularının raporlanması ile denetim kalitesi arasında anlamlıilişki tespit edilmiştir. Bununla birlikte bazı kontrol değişkenlerinin (finansal kaldıraç oranı, işkarmaşıklığı düzeyi, işletmenin büyüklüğü, esas faaliyetlerden nakit akışlarının toplam aktife oranı veşirketin yaşı) denetim kalitesi üzerinde etkili olduğu tespit edilmiştir.

«ОТРАСЛИ. УСТОЙЧИВОСТЬ» – ПРОГРАММНАЯ МОДЕЛЬ ДЛЯ НЕЧЕТКОГО АНАЛИЗА ЭКОНОМИЧЕСКОЙ УСТОЙЧИВОСТИ ОТРАСЛЕЙ

The aim of this article is to describe the implementation of the new “Industry. Resilience” software program for fuzzy modeling of industries and provide a brief overview of the scientific methods employed in the program. The “Industry. Resilience” program utilizes the following basic technologies in industry modeling: • Matrix aggregate calculator; • Structuring of industry indices using weighted average technologies; • Industry R-lenses; • Algorithms for intelligent data filtering; • Strategic matrix 4x6 in dynamic execution. Through the modeling conducted in the program, it is demonstrated that an industry maintains its economic resilience under the fulfillment of three basic conditions: a) preserving a minimum net profitability of 5–7%; b) achieving an asset turnover rate of at least 1.5 times per year; c) receiving government credit through supplier factoring, resulting in a financial leverage ratio of approximately 1.6. Together, these conditions are expected to yield a return on equity (ROE) of around 20% annually, ensuring significant private capital attraction to the industry, particularly with the provision of additional government guarantees for capital protection (a real option for businesses). The application of artificial intelligence technologies to economic analysis of industries (including their resilience) has already yielded impressive scientific results, but the main achievements are anticipated in the future with the accumulation of data and knowledge across a wide range of economic entities.

Investigation of the effect of working capital management on profitability by panel data analysis and multi-criteria decision making techniques

Purpose: The aim of this study is to reveal and compare the effect of working capital management on return on assets with different analysis methods, based on the annual financial statement data of companies in the tourism sector traded in Borsa Istanbul (BIST) in the period 2012-2020. This study aimed to reveal the drawbacks of including in the model variables that are not an element of working capital management. Methodology: Panel data analysis, the analytical hierarchy process and the fuzzy analytical hierarchy process were used to reveal the effect of working capital management variables on return on assets based on the financial statement data of the companies. Results: As a result of the analysis, a significant relationship was identified between the rankings made by using the realized return on assets ratios and the rankings obtained by AHP and FAHP, while no significant relationship was found between the rankings obtained by panel data analysis. Conclusion: Including some variables in the model as a working capital management variable in panel data analysis may cause misinterpretation of the effects of real working capital variables on return on assets. When the model that emerged according to the AHP and FAHP methods was examined, the asset turnover rate and financial leverage ratio variables were determined as the ratios with the lowest effect on return on assets, as the elements of working capital management in the weighting made according to the opinions of the experts.