Business Financial Performance Research Articles

PRODUCTIVITY ACCOUNTING AND BUSINESS FINANCIAL PERFORMANCE: A REVIEW OF CURRENT EVIDENCE

1. IntroductionMuch of what is grasped about the link between productivity and business financial performance derives from business accounts. At the firm level, enhancements in productivity go directly to the ultimate result, to the advantage of diverse beneficiaries. Lucrative firms develop, and their employment and investment undertakings are instrumental in growth in the economy. At the economy level, such output gains increase returns per person and are instrumental in a superior standard of living. (Grifell-Tatje and Knox Lovell, 2015)2. Productivity Accounting Based on Production PricesThe relevance of productivity accounting resides in its capacity to disjoin the effects of output change and price alteration on business financial performance. Merely contrasting nominal revenue and cost via time obscures the likelihood that a somewhat profitable firm is financially ineffective as it is deficient in pricing power, or that a rather unprofitable firm is financially effective as it benefits from pricing power. Explaining price alteration transforms the analogy to one between real returns and real expenses, and thus clarifying the effect of output change on one in financial performance. Productivity accounting supplies the information and an analytical scheme within which economic investigation may determine the contributions of the main determinants of output change. Measures of output can be incorporated into business accounts, and value alterations can be separated (Mircica, 2011a, b; 2012; 2014) into quantity ones and price ones. The difficult task is to organize accounting data in an organizationally practical manner. The latter are nominal values that comprise the consequences of quantity alterations and price ones. Prices should not be disjoined from quantities if the only aim is to assess profit(ability). Measures of returns and expenses are demanded, which are immediately accessible in firm's financial statements (Popescu and Bițoiu, 2017) and which do not necessitate disjunction of values (Nica and Hurjui, 2016) into quantities and prices. At the economy-wide level (Popescu and Ciurlau, 2017), accounting convention parallels returns and expenses, interest moving from an emphasis on profit (Popescu, 2017a, b) at the business level to one on output. (Grifell-Tatje and Knox Lovell, 2015) (Figures 1 and 2)3. Productivity Measurement and Management AccountingThe assessment of output demands disjunction of distinct values (Mihaila et al., 2016) into quantities and prices that should be gathered into indexes/ indicators of output and input quantities and prices (Nica and Mirica (Dumitrescu, 2017a, b), after which output is assessed as the proportionality of an output quantity index/indicator to an input quantity index/indicator. In the aggregate accounts, the basic accounting individuality necessitates nominal returns to correspond to nominal expenses that comprises gross operating surplus/gross return to capital, which supplies compensation for the providers of capital inputs, eliminating the difference between nominal returns and nominal noncapital expenditures by considering compensation for capital inputs as an expenditure (it is conveyed as a value that cannot without difficulty be divided into quantity and price elements). …

Business Performance of Health Spa Tourism Providers in Relation to the Structure of Employees in the Republic of Croatia.

Health spa tourism services are provided in special hospitals for medical rehabilitation and health resorts, and include controlled use of natural healing factors and physical therapy under medical supervision in order to improve and preserve health. Health tourism is a service industry and therefore labor-intensive industry in which human resources are one of the key factors of business success. The aim of this study was to analyze business performance of special hospitals for medical rehabilitation and health resorts in Croatia in relation to the structure of employees, specifically the number of physicians and total medical personnel, as well as the share of physicians and medical personnel in the total number of employees. The assumption was that those who employ more physicians and medical employees are more successful. The empirical research was conducted and the assumption was tested firstly by correlation analysis and afterwards by regression analysis. The total number of employees in the researched health resorts and special hospitals amounted to 2,863, of which the share of physicians specialists accounted for almost 7%, while the share of total medical staff was almost 53%. From the results of our research, it can be concluded that special hospitals for medical rehabilitation and health resorts, which employ more physicians and medical personnel, are achieving better financial business performance. Based on the results obtained, it is possible to provide guidance for further growth and development in the direction of basing the primary offer on medical-health offer, rather than on wellness offer, which is a strong trend in the world. These findings are important for planning the health and tourism policies in Croatia and similar countries.

Linking entrepreneurial orientation to firm performance in a post-socialist market context: the case of Hungary

Entrepreneurial orientation provoked the interest of numerous scholars as well as political and administrative decision-makers. Both start-ups and already established corporate entities are increasingly persecuting new opportunities, products, and business models in order to establish superiority above their competitive environment. The tendencies evince an optimist impact of entrepreneurial orientation on business performance, namely on financial performance. Beyond the aforementioned relationship, there are impulses such as environmental and organizational factors, which are affecting the businesses. The results of this study provide evidence of the effect of entrepreneurial orientation on business performance in a post-socialist context. We test the impact of three moderators on this bivariate relationship. In contrast to the substantial body of literature for Western markets, we contribute to minimizing the considerable gap of research in post-socialist economies. Entrepreneurial orientation as an organizational behavior may affect the financial performance of businesses differently in distinct market contexts. Both, internal and external factors are crucial to identifying, analyze and monitor, to achieve superior performance and to overcome competitors. This study builds upon a stratified sampling survey of Hungarian company owners and managers from the Amadeus database. The study uses a deductive approach. For the analysis, we rely on structural equation modeling using the PLS algorithm. Our study contributes to the existing literature by means of confirming the entrepreneurial orientation to firm performance relationship for Hungary. In this context, we test the moderating effects of environmental dynamism, environmental hostility as environmental factors and firm age as an organizational factor. Environmental hostility is closely related to an unfavorable environment, deriving from rapid and radical changes in the industry, which are typical for post-soviet economies. In such dynamic environment, destructive innovations of the industrial actors appear more often as the economy switches to an open competition, capitalist market. The results confirm that the internal and external factors have no significant influence on the entrepreneurial orientation to financial performance direct relationship.

Recent Developments in Productivity Analysis

AbstractI provide a selective and idiosyncratic examination of several recent, and in some cases not‐so‐recent, developments in productivity analysis that I find interesting. Some have been influential, among them being an analysis of the linkage between management and productivity, an analysis of productivity dispersion (or productivity gaps) and productivity‐enhancing resource reallocation, the incorporation of environmental impacts into productivity measurement, and an analysis of the impact of productivity on business financial performance. Others, for whatever reason, have had less impact, including an analysis of two quite different productivity indices bearing the same name, developing the linkage between empirical and theoretical productivity indices, and the derivation, interpretation and implementation of indirect productivity indices.

Influence of Funding Sources and Business Diversification on the Financial Performance of Regional Water Company Jayapura Regency

To examine and analyze the influence sources of funding consisting of long-term debt and capital to diversification business and financial performance of Regional Water Company Jayapura Regency. Methods of collecting data used were observation, interviews and secondary data such as financial statements and other documents that have to do with research. Data were analyzed descriptively and quantitatively using the financial ratio analysis, Du Pont analysis and financial ratios specified by Decree 47 of 1999. The results showed that: the effect on the long-term debt diversification Regional Water Company Jayapura regency primarily on the acquisition of Long-Term Debt laba. Dan also affect the financial performance of Regional Water Company redgional Water Company Jayapura regency precisely at the level of solvabilitas, where based on research results Regional Water Company Jayapura Regency has a high level of solvabilitas, high solvabilitas is caused by injection of funds from the government charged as long-term debt. The use of equity capital effect on business diversification and financial performance of the Regional Water Company Jayapura regency. This is evidenced by a decrease in profit resulting from lower equity and the amount of long-term debt. Which due to the lack of balance between long-term debt and equity. And diversification efforts affect the financial performance of the Regional Water Company Jayapura Regency

Effects of Microcredit on the Financial Performance of Small Scale Cooking Oil Processors in Central Malawi

<p>The study was conducted to determine the effect of microcredit on financial performance of small scale cooking oil processors in central Malawi. Adopting a mixed research approach, the DuPont identity was used to compare the financial strengths and weaknesses between businesses that acquired a microcredit and those that did not. First, the study found that small scale cooking oil processing is a profitable business, regardless of their status in microcredit acquisition. However, microcredit had mixed effects on the financial performance of businesses. Microcredit improved the level of business capital for the businesses translating into better production efficiency, competitiveness and acquisition of a market share thus positively contributing to financial performance. On the other hand, microcredit increased the debt equity ratio hence increasing the businesses’ risk of default. The study recommends the businesses to further improve production efficiency and net asset turnovers. In addition, small and medium scale businesses ought to prudently contract microcredit in order to enhance their financial performance whilst checking for their risk of financial distress.</p>

Quantum Mechanics and Firm Financial Performance

This paper develops a discussion to examine two distinct disciplines being Physics and Social Sciences exploring the relationship between the principles of Quantum Mechanics and Firm Financial Performance. Quantum Mechanics of course is defined as explaining the behaviour of matter and its interactions with energy on the scale of atoms and subatomic particles. We therefore need to make the association of this field of study with Firm Financial Performance of businesses. The core modus operando is that the smaller components of the organisation can have significant influence and effects on the organisation as a whole. In essence what is being posited by this paper, that internal and external interactions of the firm at every level of the firm is potentially going to have an overall impact on how the performs financially as a whole.

Relationships of Corporate Social Responsibility With Perceived Financial Performance of Businesses: A Study

Relationships of Corporate Social Responsibility With Perceived Financial Performance of Businesses: A Study

How does the human resource department’s client relationship management impact on organizational performance in China? Mediate effect of human capital

HR department’s client relationship management (HRDCRM) is an area of growing research interest in the field of strategic human resource management practices.The human resource (HR) department’s client relationship management (HRDCRM) is an area of growing research interest in the field of strategic human resource management practices. By introducing human capital as a mediating variable, with one questionnaire sent per enterprise to chief executive officers (CEOs), middle and line managers, and line staff in 260 Chinese enterprises, empirical research on the effects of HRDCRM on organisational performance was conducted. Empirical results indicate that controlling by enterprise ownership and life cycle stage, human capital either completely or partially mediates the effects of HRDCRM’s factors on the two parts of organisational performance (new-product performance and business financial performance). The findings show that the combination of HRDCRM as optimal HR management practices and human capital as organisational strategic assets will further improve organisational performance.

How does the human resource department's client relationship management impact on organizational performance in China? Mediate effect of human capital

HR department’s client relationship management (HRDCRM) is an area of growing research interest in the field of strategic human resource management practices. The human resource (HR) department’s client relationship management (HRDCRM) is an area of growing research interest in the field of strategic human resource management practices. By introducing human capital as a mediating variable, with one questionnaire sent per enterprise to chief executive officers (CEOs), middle and line managers, and line staff in 260 Chinese enterprises, empirical research on the effects of HRDCRM on organisational performance was conducted. Empirical results indicate that controlling by enterprise ownership and life cycle stage, human capital either completely or partially mediates the effects of HRDCRM’s factors on the two parts of organisational performance (new-product performance and business financial performance). The findings show that the combination of HRDCRM as optimal HR management practices and human capital as organisational strategic assets will further improve organisational performance.

Business financial performance indicators

The goal of any business entity is to ensure the success of its activities, financial stability and durability and long-term business continuity. Achieving these objectives depends on a number of influential factors, both internal and external. In order to examine the level of achievement of these objectives certain indicators of success, stability and trends that point to the possibility of long-term business should be measured and expressed. Those indicators can be financial and non-financial in nature, or quantitatively and qualitatively expressed. The subject of this paper are financial indicators that help to measure and review business performance and are in the function of providing information needed for effective management of the company. These indicators primarily include indicators of cost effectiveness, profitability and indicators of investment security. In addition to these literature recognizes also activities that indicate the success and stability of the business. The need for measuring and quantifying business performance resulted from analytical activities which are a product of financial indicators that indicate the business accomplishments of enterprise.

Financial business performance of Tur board

The Karnataka Togari Abhivrudhi Mandali Limited (KTAML) Gulbarga was registered under the Companies Act 1956 and started in the year 2002. The objective of studying of KTAML is to protect interest of tur farmers by way of better price realization. In this regard the study has been under taken to evaluate the performance of Tur Board, employing different financial ratios. Quick ratio for a period of nine years was 0.79 for the Board, which implied that the firm has appalling liquidity and is able to pay less to its creditors out of its quick assets. The overall results of liquidity ratios project that the Tur Board is not in much comfortable position to meet its immediate financial obligations. The debt-equity ratio of Board has indicated that board borrowed 1.15 times its equity capital, which is alarming. The average inventory turnover ratio was 1.82, which implies that the Board is turning its inventory of finished goods into sales 1.82 times in a year. Gross profit to sales ratio, on an average, was 0.08 indicating that the firm has scope for further improvement in their gross profit margin. The average value of net profit margin for study period was 0.02, indicating that there is difficulty for the firm to withstand adverse conditions with a low net margin.

Climate Change and Financial Performance in Times of Crisis

ABSTRACTOver the past years there has been a debate on the relationship between the environmental and financial performance of businesses, but researchers have not reached any agreement. This research attempts to explore this relationship, especially as in recent years there has been controversy about how this relationship has been affected by the global economic crisis. Taking into account that successfully limiting global climate change to safe levels in the long term is likely to require connecting climate change policies to sustainable development strategies, this paper focuses on the performance of environmental policies. We used a sample of 855 international companies in sectors of intensive greenhouse gas/CO2 emissions. Specifically, we used data from the Forbes Global 2000 Index and Carbon Disclosure Project data from 2006 to 2009. The data analysis was performed using panel data methodology. The results obtained show that in times of economic crisis, the synergy between environmental and financial performance is higher, meaning that companies must continue to invest in sustainable projects in order to enhance relations with their stakeholders, leading to higher economic profits. Copyright © 2013 John Wiley & Sons, Ltd and ERP Environment

The impact of multi-criteria performance measurement on business performance improvement

Purpose: The purpose of this paper is to investigate the relationship between multi-criteria performance measurement (MCPM) practice and business performance improvement using the raw data collected from 33 selected manufacturing companies. In addition, it proposes modified MCPM model as an effective approach to improve business performance of manufacturing companies. Design/methodology/approach: Research paper. Primary and secondary data were collected using questionnaire survey, interview and observation of records. The methodology is to evaluate business performances of sampled manufacturing companies and the extent of utilization of crucial non-financial (lagging) and non-financial (leading) performance measures. The positive correlation between financial business performance and practice of MCPM is clearly shown using Pearson’s correlation coefficient analysis. Findings – This research paper indicates that companies which measure their performance using important financial and non-financial measures achieve better business performance. Even though certain companies are currently using non-financial measures, the researchers have learned that these financial measures were not integrated with each other, financial measures and strategic objectives. Research limitations/implications: The limitation of this paper is that the number of surveyed companies is small to make generalization and they are found in a single country. Further researches which incorporate a large number of companies from various developing nations are suggested to minimize the limitation of this research. Practical Implication: The paper shows that multi-dimensional performance measures with the inclusion of key leading indicator are essential to predict the future environment. But cost-accounting based financial measures are inadequate to do so. These are shown practically using Pearson’s correlation coefficient analysis. Originality/value: The significance of multi-dimensional performance measures for business improvement in developing countries has been an issue among researchers. The originality of the paper is evident in the proposal of MCPM model, considering the problems being faced by some manufacturing firms leading to low performance.

Gender Difference in Profit Performance—Evidence from the Owners of Small Public Accounting Practices in Taiwan

This study aims to investigate whether the significant difference of the firm’s profit performance exits between the male-owned and female-owned small accounting firms. Using data from 1992-2008 small public accounting practice in Taiwan, this study uses a panel data model to estimate the coefficients and to examine the association between gender variable and the firm’s profit performance. The findings reveal that the significant difference in profit performance exists between male-owned and female-owned firms in sample. The study can clarify the effects of owner’s gender on financial performance of businesses with the explanations that female owners adopt the different management strategies from the male owners. The study also implies that female-owned small businesses are easier to acquire external funds because of their lower risk preference, since the female owners can ensure stable collection of principal and interest. Our study contributes to our understanding of the differences in the profit performance between male-owned and female-owned CPA firms. Not merely can the results of this empirical study provide valuable research implications for women entrepreneurs in the professional accounting practice, but they also provide supplementary in existing accounting literature.

Enhancing business performance of hotels: The role of innovation and customer orientation

Innovation management and customer orientation have been widely recognized as key factors in enhancing the business performance of hotels. Our research investigates the interplay between customer orientation, innovation, and business performance in the Alpine hospitality industry. The study contributes to current innovation research by jointly investigating hotel innovativeness and innovation behavior as two distinct dimensions of the innovation concept. Analyzing data from 203 hotel managers, this study shows that the effect of hotels’ customer orientation exceeds the effects of innovativeness and innovation behavior on financial and non financial business performance. Mediation analysis shows that innovation behavior partially mediates the effect of customer orientation on business performance. The results of the study provide hotel management with relevant insights into the customer orientation innovation performance chain.

The Role of Intellectual Capital to Improve the Financial Performance of Companies on the Indonesia Stock Exchange

In addition to providing a competitive advantage, intellectual resources are an important component in business progress. The method of observing the Value-Added Intellectual Coefficient (VAIC), Value-Added Capital Employed (VACA), Value Added Human Capital (VAHU), and Structural Capital Value Added (STVA) variables in the company's capital structure can improve the company's financial performance by increasing its profitability. Therefore, this study focuses more on how intellectual property impacts the financial performance of manufacturing companies listed on the Indonesia Stock Exchange from 2017 to 2020. Quantitative method that uses regression analysis on panel data. By using purposive sampling method, the research sample includes twelve companies. The results showed that STVA had no significant impact on Return on Assets (ROA), but VACA and VAHU had a significant impact. For future research, variables and years of research will be added, and this conclusion shows how important Intellectual Capital management is to improve the financial performance of the company. To improve financial performance and efficiency, businesses should increase investment and management of Intellectual Capital. The recommendation for future research is to conduct more in-depth research by considering other factors that may affect the financial performance of businesses. In addition, the research sample should be expanded so that the findings can be generalized.

Greenhouse gas emission practices and financial performance

PurposeThe ambiguous effect of sustainable business practices on business financial performance is explained empirically as the result of the disparity of the practices analyzed, the inadequate relation proposed and the misspecification of the moderating variables. The purpose of the present study is to determine the effect that each of these factors can have as justification for the divergence of outcomes in previous studies.Design/methodology/approachSeveral dependence models have been estimated in order to observe the type of effect of greenhouse gas emissions (GHGE) practices on FP, attempting to establish whether this relationship is linear, positive or negative, or a curve. Additionally, the authors interacted these GHGE practices with the level of firms' innovation in relation to their competitors.FindingsThe results show that greenhouse gas emission controls have an inverse‐linear effect on firm performance, independently of their level of innovation. This relationship is justified in that in contrast to previous articles, the authors have evidence of a null relationship between particular corporate social responsibility (CSR) practices and research and development expenses.Originality/valueIt is shown that it is the type of CSR practice observed and the business motives underlying it that is the determining factor of these divergences.

The impact of leverage and other key variables on business performance: evidence from Greece

This paper uses firm level panel data to investigate, empirically, the effects of leverage and other key variables on the financial performance of business in the Greek economy during the period 1997–2004; a period during which Greek firms were making adjustments to meet the requirements of the new environment of Economic Monetary Union. The study examines the effect of leverage in combination with other strategic determinants on business financial performance in the case of industrial firms, which have to survive in the environment of Eurozone and the market of 300 million consumers. Results show that leverage in parallel with export activity, location and investments significantly affect firm performance in a relatively small market which inevitably suffers from the sharpen competitive pressures taking place throughout Europe.

The economic impact of quality management systems in Portuguese certified companies

PurposeDespite all the studies carried out in order to analyze the impact of quality management systems implementation and certification over companies' financial performance, conclusions reached so far have been of a contradictory nature. Some authors conclude that there is a positive relationship between ISO 9001 certification and companies' financial improvement, while others do not find evidence to support such a relationship. Overall, no consistent evidence could therefore be found in the literature concerning the ISO 9001 impact over companies' business financial performance. This work aims to provide a contribution in this area.Design/methodology/approachUsing a public database of Portuguese companies' financial information, this paper describes the results obtained from studying the economic impact of quality management systems, based on a statistical analysis.FindingsThe results suggest that companies with higher financial performance do present a greater propensity to implement and certify their quality management systems. The ISO 9000 implementation motivation is a critical success factor in the impact of the quality management system over the company economic performance and, for some financial indicators, non‐certified companies do present, on average, higher performance than those that are certified.Originality/valueThis paper aims to provide an important contribution to the worldwide research related to the quality management systems impact over companies' financial performance.