Financial Performance Indicators Research Articles

Nexus between board characteristics and financial performance: Evidence from developing economy

Corporate performance is the key indicator of availing the economic performances in all economies. Especially for the emerging economy, it is the oxygen for smooth economic operations. The study aims to investigate the influence of board characteristics on the corporate performance of the listed pharmaceuticals and chemicals sector from a developing country, namely Bangladesh. This empirical study examines eight attributes of the board and four financial performance indicators of the businesses. Here, the annual reports of the DSE-listed pharmaceutical and chemicals companies are considered to examine the impact of board attributes on corporate performance. Based on panel data analysis, this empirical study concludes that the fixed effect regression model is suitable for all four models. Except board size, the results demonstrate that all board attributes are generally statistically significant. Furthermore, it confirms that all the significant characteristics of the board are positively associated with corporate performance, except for board independence. The research offers valuable insights for policymakers, investors, organizations, and scholars, promoting optimal board structures, innovative solutions, and an enhanced understanding of corporate governance matters. This research explores the challenges in board attributes, which enhances our understanding of corporate governance matters and their impact over the last decade in the listed pharmaceutical and chemicals sectors in Bangladesh.

Performance Evaluation and Management of Indian Manufacturing Organizations Through Fuzzy Optimization Techniques

In a context of intense competition, evaluating financial performance is crucial for manufacturing sectors. As such, a precise and fitting performance review is essential. In the process of evaluation, financial performance indicators need to be carefully chosen because they show how competitive a business is. In this paper, the financial performances of the firms in the Indian manufacturing industry are evaluated using financial ratios, specifically accounting-based financial performance (AFP) measures and value-based financial performance (VFP) measures. These financial performances are assessed through multi-criteria decision-making (MCDM) techniques, specifically fuzzy multi-objective and optimization on the basis of ratio analysis (F-MOORA) and fuzzy step-wise weight assessment ratio (F-SWARA). First, the financial performance indicators' weights are determined by the F-SWARA approach, and then the firms' rankings are determined by the F-MOORA approach. By applying SWARA methodology in a fuzzy environment, the implications of the findings demonstrate that the factor named Return on Assets (ROA) contains the maximum weight and the factor named regret contains the lowest weight. By applying F-MOORA technique, it also demonstrates that company C1 is the best and company C3 is the worst.

FOREX EFFICIENCY AND FINANCIAL PERFORMANCE OF INDIAN DEFENCE COMPANIES – EXAMINING CONNECTION

This study explores the impact of financial performance on forex efficiency of the selected Indian Defence companies. To meet this objective the sample of five companies selected from nifty defence index based on availability of data. This research uses a descriptive research design and the analysis spans over ten years from April 2014 to March 2024. The financial performance indicators, including profitability, liquidity, asset efficiency, and solvency are examined in relation to forex efficiency through correlation and panel regression analysis. This research aims to address two key questions: the overall relationship between financial performance and forex efficiency in selected Defence companies and the influence of selected financial indicators on forex efficiency. The previous studies have explored related themes but they have not specifically targeted the Defence sector or detailed how particular financial indicator impact forex efficiency. This study fills this gap by providing a meticulous analysis of how financial performance influences forex efficiency. This contributes in valuable insights for strategic financial management and policy formulation in the Defence industry.

The Impact of Environmental, Social, and Governance (ESG) Reporting on Corporate Financial Performance

This research explores the impact of Environmental, Social, and Governance (ESG) reports on company financial performance. ESG has become an important indicator in assessing the desirability and social responsibility of companies in various industrial sectors. Although many companies are starting to adopt ESG reporting standards, there are still concerns regarding their impact on financial performance. This research aims to establish a relationship between ESG reports and company financial performance through analysis of quantitative data taken from public companies over a certain time period. The financial performance indicators explained include return on assets (ROA), return on equity (ROE), and share prices. ESG data is obtained from company annual reports and internationally recognized ESG databases.

The Impact of Cash Liquidity and Financial Leverage on The Performance of Iraqi Banks: A Comparative Study Between Islamic and Conventional Banks

Degree of financial leverage refers to the percentage of bank assets financed through debt, which banks must employ to achieve returns and cover costs, as well as the availability of cash at maturity. Therefore, the problem of the study arises in how the indicators of leverage and cash liquidity affect the indicators of financial performance in the Iraqi banking sector. That is why the study aims to use econometrics to demonstrate the impact of leverage and cash liquidity on the financial performance indicators represented by return on assets (ROA) and net profit margin (NPM) for a sample of 38 conventional and Islamic banks for the period 2010-2022. The Dynamic Panel Data methodology was used to determine the relationship between variables, which combines time series and cross-sectional, precisely the generalized moment method (GMM). Results show that financial leverage negatively and significantly impacts ROA and NPM indicators in the total sample and Islamic and conventional banks, except for the positive relationship with ROA in conventional banks. The results also showed the positive impact of cash liquidity on ROA and NPM indicators in the total sample and Islamic and conventional banks, except for its negative impact on ROA indicators in conventional banks. The results also showed the negative impact of the cash credit (cash credit to total assets ratio) on ROA and NPM indicators in the total sample and Islamic and conventional banks. Paper type: Research paper

Factors Affecting the Sustainability of Corporates in Polluting Sectors

Corporate sustainability performance is gaining ever greater importance. The negative impact of climate change is manifested through heavy air, water and soil pollution. Polluting sectors, as the major players, are characterized by large amounts of emissions, waste and consumption of resources, and therefore have a larger negative impact on the environment. Companies operating in polluting sectors are recognized globally as the main sources of greenhouse gas emissions; thus, their performance is widely debated. Despite their character, such companies strive for higher profitability, better financial performance and operational efficiency. However, higher financial resources create the potential for innovation investments in companies. It is widely accepted that research and experimental development (R&D) expenditures enable new business ideas, models, products, services, and processes. However, while pursuing sustainability targets, financial results could be directed towards sustainability performance. The purpose of this paper is to analyze how the financial and innovation results of companies in polluting sectors interact with sustainability performance scores. For it, we have identified three essential pillars of sustainability: environmental, governance, and social. Using ordinary least squares (OLS) regressions, models were developed for each pillar of sustainability, including corporate financial performance indicators and R&D expenditures. The obtained results provide the insights that a company operating in polluting sector size and turnover significantly interacts with all pillars of sustainability. However, we also found that the corporate debt ratio, earnings ratio, and current liquidity have a significant relation only with environmental and social sustainability indicators.

Effect of Asset Quality, Rentability, and Liquidity on the Book Value of Bank Companies Listed on the IDX in 2015-2020

<span lang="EN-US">The purpose of this study is to measure how strong the impact of asset quality, profitability, and liquidity is on a company's book value. This research study utilized secondary data sourced from the Bank's annual reports for 6 years (2015-2020) as a sample of 23 banks equivalent to 138 data which were then analyzed using statistical tests. The results of the data test show that NPL, ROE, ROA, OER, and LDR together have a positive significant impact on the Book Value of Shares, individually NPL has a significant positive impact, ROE has a significant positive impact, ROA has a positive and significant impact, OER has no impact and liquidity has a significant positive impact on the Book Value of Shares. Asset quality, profitability and liquidity scores are indicators of financial performance that can be used by fund owners to determine the condition of a bank's financial health when investing in banking stocks based on the right decisions.</span>

Does Digitization Affect Social and Financial Performance in Microfinance Institutions?

This research aims to explore the effects of the digitization of microfinance institutions (MFIs) on their social and financial performances, and on the trade-off between them given the double mission pursued by these institutions. To reach this objective, we performed ordinary least squares (OLS), logit, and two-stage least squares (2SLS) regressions on a sample of 331 microfinance institutions from the ATLAS database. Findings reveal evidence of significant mixed effects of digitization on social and financial performance indicators. They also show that there is no significant effect of digitization on trade-offs. The novel aspect of this research lies in the approach used to measure social performance which is proxied by the SPI4 -Social Performance Indicators-developed by Cerise and Social Performance Task Force (SPTF), while previous research on the topic have used social mission outcomes indicators. The SPI4 tool allows financial service providers to evaluate the implementation of Universal Standards for Social Performance Management (USSPM). This study also provides evidence on the effect that digitizing MFIs operations may have on trade-off between their social and financial performances. The findings have significant implications for institutions, especially on the way they can implement and interconnect their digitization process, USSPM and financial strategy. Firstly, the significant effect of digitization on social performance reveals synergies between the adoption and use of digital solutions and the implementation of good practices of SPM. Secondly, the mixed effects of adopting digital solutions on financial performance suggest that while this process appears to drive efficiency within institutions, it does not necessarily improve their profitability, since capital expenditure appears to increase more than profits. Finally, since digitization does not appear conducive to trade-off, MFIs should better align their financial and investment strategy with their social objectives when going digital.

Decoding the ‘Social’ in ESG

Traditionally, a company’s financial performance indicators, such as revenue generating capacity, profit margins, and inventory turnover were the driving force behind a company’s attractiveness as an investment opportunity. The rising popularity of environmental, social and governance (‘ESG’) norms in the last decade however has seen a shift in investors’ risk appetite – investors are moving away from archaic definitions of performance indicators and assessing an investee’s impact in terms of ESG metrics.While there is clarity on what factors constitute ‘environment’ and ‘governance’ principles, the ‘social’ metric continues to remain shrouded in mystery. In this article, we discuss the factors which form the building blocks of the ‘social’ metric as well as review the yardsticks available to measure this metric, particularly from an Indian standpoint.

Exploring Trends in Financial Performance Metrics: An In-Depth Study of Nepalese Banks Over the Past Decade

This study investigates the trends in Return on Assets (ROA) and Return on Equity (ROE) within Nepalese banks over the past decade, while also assessing the growth of banking infrastructure, including branches, ATMs, and card usage. Utilizing a descriptive and correlational research design, secondary data spanning from fiscal years 2070/71 to 2079/80 was analyzed, drawing on monthly records from 20 commercial banks to yield 2,400 observations. Data was collected from annual reports, the Nepal Rastra Bank, the Central Bureau of Statistics, and economic surveys. Results revealed a significant initial rise in both ROA and ROE, indicating robust profitability, followed by notable declines that suggest underlying structural weaknesses in the banking sector. The expansion of banking infrastructure was substantial, with a marked increase in branches and ATMs between 2074 and 2075, positively correlating with financial performance indicators such as total deposits and loans. The study concludes that enhancing banking infrastructure is crucial for improving financial stability and performance in Nepal's banking sector. The findings highlight the interconnectedness of physical banking presence and financial health, emphasizing the need for strategic reforms. The novelty of this research lies in its comprehensive analysis of the relationships between banking metrics and financial outcomes in the Nepalese context, providing valuable insights for policymakers and financial institutions aiming to navigate current challenges and foster sustainable growth.

Taking ESG strategies for achieving profits: a dynamic panel data analysis

PurposeThe goal is to investigate the relationship between financial performance and environmental, social and governance (ESG) indicators and disclosures for a sample of Latin American firms.Design/methodology/approachDynamic panel data regressions are used to analyze a sample of 114 companies listed on the Latin American Integrated Market, MILA (Chile, Colombia, Mexico and Peru) for the period 2011–2020. The Altman Z-score and Piotroski F-score are used as indicators of the probability of default and comprehensive financial strength. Models are developed in which the relationship between economic value added (EVA) and Jensen’s alpha are evaluated against firms’ ESG practices.FindingsA direct relationship between ESG strategies and financial performance was found. Better practices and transparency in ESG are related to lower probability of bankruptcy, greater financial strength, greater EVA and superior risk-adjusted returns.Research limitations/implicationsESG data were obtained from the Bloomberg system based on a methodology that may differ from other sources. The sample covers four Latin American countries and large corporations. Independent variables were selected for their perceived validity, given their frequent use in previous studies.Practical implicationsEvidence for company management regarding the importance of strengthening ESG practices and reporting should be part of their balanced scorecards. For investors, the results support the importance of evaluating ESG practices in asset selection.Originality/valueThe present study is the first research to present empirical evidence on the relationship between ESG scores and disclosures for MILA countries, using a comprehensive set of financial performance indicators (Altman Z-scores, Piotroski F-scores, EVA and Jensen’s alpha).

Board Size and Corporate Performance in the Industrial Property Sector in Malaysia

This research investigates the relationship between the size of the board of directors and the financial performance of publicly listed industrial property firms in Malaysia. The study examines secondary data from annual reports, financial statements, and corporate governance disclosures, focusing on key financial performance indicators such as Return on Assets (ROA), Return on Equity (ROE), and Net Profit Margin (NPM). The study reveals significant correlations between board size and financial performance using correlation analysis and multiple regression. The findings provide valuable insights for regulators, investors, and business leaders, emphasizing the importance of refining corporate governance standards to ensure long-term financial success in Malaysia's industrial property sector.

Pengaruh Green Accounting terhadap Likuiditas, Profitabilitas, dan Leverage Perusahaan pada PT Indocement Tunggal Prakarsa Tbk Periode 2020-2022

Knowing whether or not there is an effect of green accounting on the entity's liquidity, profitability, and leverage is the purpose of this study. The sample of this study is one cement producer entity listed on the IDX from 2020 to 2022, namely PT Indocement Tunggal Prakarsa Tbk. The data used comes from the annual report and sustainability report of the entity PT Indocement Tunggal Prakarsa Tbk for the period 2020-2022. The hypothesis test used in this study is a simple linear regression analysis test using the SPSS program. Liquidity, profitability and leverage are dependent variables with environmental costs as independent variables. The analysis results show that although environmental cost is an indicator of green accounting, this cost has no significant impact on the entity's financial performance indicators, such as liquidity, profitability, and leverage.

Is Islamic Banking Sustainable in Terms of Financial Performance? Empirical Evidence from GCC Countries

The aim of this study is to evaluate the Islamic banking sector with the help of financial performance criteria and to reveal whether the sector is sustainable or not. The sustainability analysis uses the latest unit root tests that take into account Fourier expansions. The study uses unit root tests, which are generally used to analyze the sustainability of public debt, with updated versions that differ from the literature and with the help of financial performance indicators of the banking sector for sustainability analysis. The study uses the data of the Islamic banking sector operating in the member countries of the Gulf Cooperation Council (GCC) for the 4th quarter of 2013 and the 2nd quarter of 2022. The quarterly data of “ROA, ROE and Net Profit Margin” are considered as financial performance indicators for sustainability analysis. Although the results of the empirical analysis show different results for each of the financial indicators of Islamic banking in the analyzed countries, in general it shows that the Islamic banking sector operating in all GCC countries except the UAE is sustainable in terms of the financial indicators used in at least one category. These results show that the development of Islamic banking is real and promising for the future. Therefore, the development of projects that contribute to the development of the Islamic financial sector and the support of this sector is an important responsibility for the relevant parties. It is expected that these results will provide important signals to the policymakers of the respective countries and contribute to the healthy development of the Islamic banking sector.

Board gender diversity and donations in the microfinance industry: evidence from emerging economies

ABSTRACT The study examines the under-researched topic of the impact of board gender diversity on donation receipts in the microfinance sector. A global dataset of 1,177 unique MFIs from 83 countries between 2010 and 2018 was collected from the World Bank data catalog. Data were then analyzed using the Probit regressions alongside several robustness tests, including those correcting for endogeneity. Overall, the findings revealed that the presence of female directors increases the probability of MFIs receiving donations. The outcome highlights the significance of board gender diversity in fostering donor-valued organizational characteristics, such as transparency, accountability and trust. Moreover, we assessed the ‘critical mass theory’ and found that the probability of receiving donations is more pronounced among MFIs with a minimum of three female board directors. Furthermore, incorporating several financial performance indicators in the analysis exhibited that donors prioritize social objectives over the financial performance of MFIs.

BLU Financial Ratio Analysis for Performance Measurement

This research aims to determine the BLU Financial Ratio Analysis for Performance Measurement at Dr. Lung Hospital. M. Goenawan Partowidigdo Cisarua Bogor Based on Director General of Treasury Regulation No.36/PB/2016 for the 2019-2023 Period. This research uses quantitative descriptive research with data collection methods, namely field research, interviews, observation, documentation and literature review. Financial ratio analysis is carried out using liquidity, solvency, activity and profitability ratios, with 7 ratio indicators - financial ratios and BLU management compliance aspects used in research on measuring hospital financial performance, including cash ratio, current ratio, receivables collection period, turnover. fixed assets, compensation for fixed assets, equity compensation and PNBP income against operational costs. The results of the research show that the analysis of financial performance at RSPG Cisarua Bogor based on analysis of liquidity, solvency, activity and profitability ratios shows good performance and based on financial performance indicators of the hospital, the financial performance of RSPG Cisarua Bogor from 2019-2023 is included in the predicate of both A and AA.

Eight-year evaluation of dental public health students’ research using balanced scorecard – Retrospective study

Introduction:Measuring the performance of dental schools in the research area has always been challenging. Balanced Scorecard (BSC) is a performance measurement tool with four perspectives that balance financial and non-financial performance indicators. Some medical colleges use BSC for performance measurement of all departments’ activities while others use it in some sections or departments. This study is the first in the dental education field to use the BSC approach to assess the performance measurement of dental students’ research projects. Methods:A self-developed BSC was designed by the staff members at the dental public health department to reflect the educational strategies and objectives of the department; all data on dental public health students’ research from 2013/2014 to 2020/2021 were collected from the dental public health department, Dental Clinics Complex (DCC) files as well as databases of the Quality Assurance Unit to cover the basic four balanced perspectives. Results:Data from the four perspectives were introduced to Balanced Scorecard Pro Software Version 4.7.1.20. The resulting balanced scorecard indicated that the overall performance of students’ research activities was 89.38%. The learning and growth perspective showed the highest performance (95.33%) followed by the financial perspective (92.5%) then the internal process perspective (89.55%) while the customer perspective showed the lowest performance (82.19%). Conclusions:BSC is an efficient tool for the measurement of the performance of the departments at medical colleges. Our process is highly adaptable and can be easily implemented by any section, or institution looking to advance its educational mission and vision.

The Impacts of Implementing the Information Technology to Improve the Financial Accounting Performance of PLCS

The goal of this study is to focus the effect of information technology on the financial accounting performance of Asian public listed companies. This study used secondary data for 120 companies from 2020 to 2023. The study also used OLS to test regression by using the Stata program. The study found that there is a positive and important link among information technologies on financial accounting performance. Information technology has become a focus of interest for all financial and economic organizations because of its effect on their public and private performance in overall and financial performance in specific. Its influence also comprises several elements of accounting and financial performance. The study extended a set of findings, the significant of which is the presence of a significant impact of information technology on financial accounting performance indicators.

The Impact of Working Capital Management on Profitability of Small and Medium Enterprises: The Case of Wine-Producing Companies of Georgia

The present study is a critical analysis of Net Working Capital (NWC) management in a framework with the different categories of SMEs with respect to its impact on profitability, particularly on Net Profit and ROA. The research goes on to investigate how NWC influences the financial performance indicators in small and medium enterprises (SMEs), knowing that efficient management of working capital is the key to business sustainability and growth. The paper will show some nuanced insights into how working capital practices affect the bottom line and asset utilization efficiency ROA. By the comprehensive analytic approach, this research is meant to integrate methodologies previously applied both in Georgian and international contexts to outline a nuanced understanding of the dynamics in question. It will analyze NWC's ratio to total assets and the positive relationship with ROA, along with the relationship between NWC and Net Profit, thus presenting a complete picture of the financial health and operational efficiency of SMEs. The research is expected to bear deep insight into the management of working capital, indicating how strategic financial planning plays a crucial role in enhancing the profitability of the company and asset utilization. These tailor-made recommendations will be a guiding light for the SME stakeholders in their endeavor to optimize their working capital practices as part of their aspiration to bolster financial outcomes. Augmenting knowledge already in circulation, this study becomes an implementable roadmap to practical financial decision-making, especially in the context of the myriad of SME sectors. The modified abstract captures the adapted research focus, showing the significance of NWC management in driving profitability and efficient asset utilization across SMEs. It sets grounds for a thorough analysis of the role of working capital in providing health and efficiency within finances and operations, giving valuable information and guidelines for small and medium businesses in the sphere of planning and managing strategic financials.

The Dynamics of Real Earnings Management: Analyzing the Effects of ROA, Company Size, and Leverage in Indonesia's Manufacturing Sector

The objective of this research is to examine the impact of ROA, company size, and leverage on REM practices in Indonesia's manufacturing business sector from 2017 to 2021. This research examines financial report data from companies listed on the Indonesia Stock Exchange using a quantitative method with panel data analysis and multiple regression. According to the findings, the only variable that significantly affects REM is the leverage variable. However, there is no evidence that ROA or SIZE significantly affect REM. According to these results, REM practices are driven more by debt obligation pressure than by financial performance indicators or firm size within the earnings management environment. This research adds to the existing body of knowledge on earnings management strategies within the setting of Indonesian manufacturing organizations and deepens our understanding of the factors that impact REM. The research findings highlight the importance of financial strategy planning and earnings management in considering the impact of leverage. It also highlights that REM decisions are influenced by more complicated internal and external factors than just firm size and ROA.