Firm Financial Performance Research Articles

Evaluating Financial Performance in the Indian Food Sector: A TOPSIS Approach to Company Assessment

When evaluating financial performance, industry-specific elements that have an influence on the food business are taken into account, including raw material costs, pricing dynamics, the competitive environment, regulatory environment, and consumer trends. When assessing a company's general health and future prospects, it is important to take these elements into account because they have an impact on its financial performance Over the years, India's food business has undergone substantial development and change, driven by factors including shifting customer tastes, urbanisation, and rising disposable income. The industry includes a number of subsectors, including restaurants, processed food, drinks, dairy products, and confectionery. Over the years, India's food business has undergone substantial development and change, driven by factors including shifting customer tastes, urbanisation, and rising disposable income. The industry includes a number of subsectors, including restaurants, processed food, drinks, dairy products, and confectionery. Investment Decisions: Evaluating the financial performance of food sector firms enables investors to make wise investment choices. Risk management: It's crucial to comprehend the financial status of businesses in the food sector. Industry Competitiveness: Analysing financial performance sheds light on the Indian food industry's competitive environment Government agencies and regulatory organisations can use financial performance assessments to develop policies and regulations that support the expansion and sustainability of the food sector. Sector Analysis: Evaluations of financial performance help with a more comprehensive study of the Indian food business. Investment Decisions: Evaluating the financial performance of food sector firms enables investors to make wise investment choices. Risk management: It's crucial to comprehend the financial status of businesses in the food sector. Industry Competitiveness: Analysing financial performance sheds light on the Indian food industry's competitive environment Government agencies and regulatory organisations can use financial performance assessments to develop policies and regulations that support the expansion and sustainability of the food sector. Sector Analysis: Evaluations of financial performance help with a more comprehensive study of the Indian food business. Alternative Parameter taken as Company 1, Company 2, Company 3, Company 4, Company 5, Company 6. Evaluation Parameter Net Profit Margin, Current Ratio, Debt Ratio, Debt to Equity. After doing topsis analysis company 2 has ranked 1 company 2 has ranked 6. TOPSIS method provides a systematic and comprehensive approach for evaluating alternatives based on multiple criteria. It considers both the positive and negative aspects of each alternative and helps decision makers in selecting the most suitable option based on their preferences and objectives.

Family Involvement and Firm Performance: A Worldwide Study Unveiling Key Mechanisms

Prior literature establishes a link between family involvement and the firm financial performance. However, the mechanisms through which family involvement in a firm affects its financial performance in different institutional settings are largely unknown. Using an unbalanced panel of 3,322 listed firms from 32 countries over a 9-year period, we find that family involvement in ownership and management on average has negative effects on financial performance. Moreover, the negative effect of family ownership is less profound in countries with good institutional quality. We further find that R&D intensity partially mediates the negative relationship between family involvement and the firm financial performance, but the mediation effect is conditional on the degree of institutional quality in a country. These findings advance the family business, innovation, and institutional literature, and offer important implications for theory and practice.

ARE INTELLECTUAL CAPITAL AND ITS COMPONENTS AFFECTIVE ON FINANCIAL PERFORMANCE?

The factors that affect intellectual capital creation at firms and how these factors influence the financial performance of firms have been core questions of extant work in the channels of finance for many years. In this period, therefore, the efforts that firms make to increase their intellectual capital to create value and studies that examine the impact of the increased intellectual capital on the firm’s financial performance are notable. Thus, this study aims to explore the influence of intellectual capital and its components on the financial performance of the BIST Sustainability Index companies for the period between 2018:Q4-2024:Q1. A set of Intellectual Value Added Coefficient (VAIC) and its components Human Capital Efficiency (HCE), Structural Capital Efficiency (SCE), and Capital Employed Efficiency (CEE) are employed as indicators of intellectual capital. The financial performance is measured through Return on Assets (ROA) and Return on Capital Employed (ROCE). Control variables included in each model are Market to Book Value (MV/BV), Logarithm of Total Assets (SIZE), and Asset Turnover (ATR). The fixed effects regression results show that an increase in the intellectual capital of the companies listed in the BIST Sustainability Index has a positive effect on their financial performance.

The Impact of ESG Performance on the Financial Performance of Chinese High-Tech and Internet Industry Firms

This study aims to explore the impact of Environmental, Social, and Governance (ESG) performance on the financial performance of firms in China’s high-tech and internet industries. Using annual data from 100 companies spanning from 2015 to 2022, a fixed effects model is applied for empirical analysis. The study finds that overall ESG performance has a significant positive impact on firms' return on assets (ROA) and net profit margin (NPM), with the governance (G) and social (S) dimensions showing particularly strong effects. While the environmental (E) dimension has a weaker short-term impact on financial performance, its long-term benefits are undeniable. Firm size and market share also have significant positive effects on financial performance. The results suggest that optimizing governance structures and actively fulfilling social responsibilities can enhance financial performance, while long-term investments in environmental responsibility should be integrated into corporate strategies. Overall, the findings provide empirical evidence for companies in formulating ESG strategies and offer specific policy recommendations for the sustainable development of China’s high-tech and internet industries.

The effect of practicing transfer pricing and financial performance: Evidence from multinational corporations in the UAE

This research aimed to determine if the financial performance of multinational firms in the United Arab Emirates (UAE) and the appraisal of transfer pricing are significantly correlated. The firms’ financial statements from 2012 to 2022 were used as the primary source data. The research used the panel least squares regression approach to analyze the data acquired from multinational firms in the UAE to assess the research hypotheses. A correlational research methodology was employed to investigate the hypothesized association between transfer price assessment factors and financial performance. The results showed an insignificant effect for bonus mechanisms, tax expenses, and return on assets as measurements of financial performance, but tunneling incentives have an insignificant relationship with return on assets. As a result, the research suggests that multinational corporations in the UAE enhance tax expenses, tunneling, and bonus mechanisms to achieve a higher rate of return on assets. Additionally, UAE multinational firms should reassess their bonus mechanism for optimal financial performance. The study's limitations and findings offer several investigation opportunities related to transfer pricing practices in the UAE, and future researchers could make a comparative study on transfer pricing in different countries.

Two-tier corporate board structure, corporate governance reforms and financial performance of firms listed on the China stock market

Two-tier corporate board structure, corporate governance reforms and financial performance of firms listed on the China stock market

Performance-Based Efficiency and Effectiveness Analysis of Technology Companies Listed on Borsa Istanbul Using Data Envelopment and Logistic Regression Analysis

This study analyses the performance-based efficiency and effectiveness of technology companies listed on Borsa Istanbul using Data Envelopment Analysis (DEA) and Logistic Regression (LR). The research focuses on evaluating the relative efficiency of selected technology firms over the period 2015-2023. DEA, a non-parametric technique, is used to measure the efficiency of decision-making units, while logistic regression helps identify the factors influencing efficiency. The study aims to assess the impact of financial ratios, such as current ratio, net profit margin, accounts receivable turnover, and others, on the firms' technical efficiency. The results indicate that Net Profit Margin (NPM) and Accounts Receivable Turnover (ADH) have the most significant positive effects on efficiency, while the Fixed Assets to Equity ratio (MDVOZK) negatively impacts efficiency. This analysis provides insights into the financial health and operational performance of technology firms, offering actionable recommendations for improving efficiency and guiding investment decisions. Key Words: Data Envelopment, Logistic Regression, BİST JEL: C45, C88, G21

Monetary Policy and The Financial Performance of Listed Consumer Goods Firms in Nigeria

This study assesses the impact of monetary policy on the financial performance of the listed consumer goods firms in Nigeria. The study uses the purposive sampling technique and elimination method to determine the considered listed consumer goods firms in Nigeria from 2012 to 2023 and analyzed the impact of monetary policy variables of interest rates and inflation rate on the financial performance of these firms, measured by earnings per share as the indicator. Regression analysis was used to analyze the data. The results specifically show that changes in interest rate have a positive significant influence on the financial performance of listed consumer goods firms while changes in inflation rate have no significant influence on the financial performance of listed consumer goods firms. The study recommends the implementation of interest rate policies by the monetary authority that will balance stability and economic growth knowing the positive impact on the financial performance of the consumer goods firms.

Environmental Cost Disclosure and Financial Performance of Oil and Gas Firms

General Background: The relationship between environmental cost disclosure and financial performance is essential in environmentally impactful sectors like oil and gas. Specific Background: This study focuses on listed oil and gas firms in Nigeria, examining health and safety costs and waste management costs as predictors of return on assets (ROA). Knowledge Gap: Existing research shows inconsistent findings on the effects of environmental disclosures on financial performance, necessitating further investigation. Aims: This study aims to clarify the impact of environmental cost disclosures on financial performance, particularly through health and safety and waste management costs. Results: Using ex-post-facto research design and secondary data analysis, the findings reveal a significant positive relationship between environmental cost disclosures and financial performance, highlighting the importance of these costs on ROA. Novelty: By applying legitimacy theory and focusing on specific environmental costs, this research fills a gap in Nigerian literature. Implications: The study recommends enhanced environmental policies for oil and gas firms, promoting accountability and aligning financial performance with ecological responsibilities. Highlights: Significant positive relationship exists between environmental cost disclosures and financial performance (ROA) in Nigerian oil and gas firms. Health and safety costs and waste management costs are critical predictors of financial performance. The study emphasizes the need for enhanced environmental policies and corporate accountability in the oil and gas sector. Keywords: Health, Safety Cost, Waste Management Cost, ROA

Pengaruh corporate social responsibility disclosure terhadap kinerja keuangan dengan reputasi sebagai variabel moderasi

This study aims to determine the effect of corporate social responsibility disclosure (CSRD) on firm financial performance with corporate reputation as a moderation variable. It focuses on primary and secondary sector companies listed on the IDX in 2014-2022. The dependent variable is firm financial performance, measured using return on assets (ROA). The independent variable, corporate social responsibility disclosure, is measured using the GRI G4. The corporate reputation as moderation variable is measured using the number of awards obtained by the company. The control variables used are company size, leverage, and cash flow. The sampling technique used purposive sampling and obtained as many as 143 companies. This research uses quantitative data, and the method used is regression analysis using the STATA application. The results of this study show that CSRD has a significant positive effect on firm financial performance. These findings provide practical guidelines for companies, stating that it is essential for a company to implement CSRD practices and have a good impact on the company's financial performance, thereby guiding companies in their CSR initiatives.

Assessing and evaluating financial performance of technology firms using DuPont model: Evidence from Malaysia

Assessing and evaluating financial performance of technology firms using DuPont model: Evidence from Malaysia

The effect of ESG divergence on the financial performance of Hong Kong-listed firms: an artificial neural network approach

This paper applies an advanced machine learning algorithm, the Artificial Neural Network (ANN), to examine both linear and nonlinear effects between firm-level characteristics and ESG performance of all firms listed on the Hong Kong Stock Exchange (HKEX) with ESG scores during 2019-2021. To mitigate the problem of data-specific findings due to rating bias from a single rating agency, we employ novel iScore (divergence-adjusted ESG measure). The documented findings indicate the unsuitability of traditional linear regression models to capture the nonlinear effects and to detect some linear relationships. Furthermore, the results show the superiority of the self-organising map (SOM) ANN framework in explaining the impact of firm-level factors on ESG performance.

A comparative study of the impact of LSSI4.0 implementation on the financial performance of Chinese manufacturing firms: an empirical analysis

Purpose This paper aims to investigate how implementing lean six sigma and Industry 4.0 (LSSI4.0) can influence a company’s financial performance and discusses the current trend involving LSSI4.0 in China. Design/methodology/approach For statistical analysis, financial data was sourced from the China Stock Market and Accounting Research database. Keywords used to assess the implementation status of LSSI4.0 were extracted from the 2007 to 2020 annual reports of A-share manufacturing companies. Regression analysis was applied to the quantitative analyses of 5,041 observational data points from 945A-share manufacturing companies in China. Findings LSSI4.0 implementation in the manufacturing industry boosts the firms’ financial performance. However, the former outperforms the latter in terms of long-term advantages. Meanwhile, incorporating lean six sigma (LSS) into Industry 4.0 (I4.0) can lead to long-term improved financial performance compared to solely implementing the I4.0. Research limitations/implications The findings possess limited international representativeness because all empirical data were derived from Chinese large manufacturing companies. In addition to return on assets and return on equity, financial performance can also be measured using other financial metrics, such as return on investment. In this study, only listed manufacturing companies were considered as research samples. Practical implications Top management must acknowledge the positive impact of LSSI4.0 on financial performance and prioritize implementing I4.0 based on LSS implementation. Originality/value Empirical results concerning the effectiveness of LSS implementation in enhancing financial performance are inconclusive, particularly in China. In addition, most studies collected data through surveys and interviews, so the representativeness of their outcomes is limited. Overall, this study evaluated the impact of LSSI4.0 implementation with large sample size.

Corporate Governance and Financial Performance: Family Firms vs. Non-Family Firms

The essence of a family business captures the distinguishing factors differentiating them from non-family businesses. Among these factors, the constructs of family firms’ managing and governance elements are perceived differently by non-family firms. This is especially important in a developing country such as South Africa (SA) with many governance challenges. The objectives of this study were, first, to identify relationships among financial performance, corporate governance, and ownership concentrations of listed family and non-family businesses in SA. Next, a comparison was made between the different ownership structures. Secondary data were collected using purposive sampling from 2015 to 2019. These data were analysed using panel data analysis and descriptive statistics. The results show that family firms place a greater emphasis on ownership concentration, board size, and board gender diversity, which have a significant relationship with financial performance. Only board size was significant to financial performance for non-family firms. The results indicate that family businesses should appoint female family members as directors on their boards, given the significance of gender-diverse boards for financial performance. Non-family businesses should also consider having smaller boards. Theoretically, this study expands on the literature regarding family businesses in SA. However, the findings cannot be generalised due to a single industry being selected. This study should be replicated in different industries to compare the results.

Nexus Among Administrative Environmental Innovation and Firm Financial Performance

This paper explores the effect of administrative environmental innovation (AEI) on firm financial performance (FFP) by considering the dynamic capability theory and resource-based view. Specifically, this study tests the linkages between administrative environmental innovation (AEI) and firm financial performance (FFP)by using worldwide data from 685 companies from 42 countries for the period 2004 to 2020. In the final sample, we have 4368 year-annual observations. In this study, AEI is segregated into internal AEI and external AEI. The findings of this study show that Internal AEI and external AEI both enhance FFP under a dynamic capability approach. In this way, this study provides some managerial implications such as the implementation of AEI helps in green innovation strategy that can raise firm profitability in the long run period.

Intangible Asset Structure and Financial Performance of Non-Financial Firms Listed at Nairobi Securities Exchange, Kenya

The Kenyan listed firms have immensely contributed to the country’s economy. However, poor financing decisions have led to most firms’ failure, which has in turn posed a big dilemma to researchers, business managers, as well as investors. Past research relating intangible asset structure and financial performance have also presented mixed results. Therefore, this study purposed to establish the relationship between intangible asset structure and financial performance of listed non-financial firms operating in Kenya. Thirty (30) non-financial firms were targeted as population of the study and were selected using census sampling technique as a unit of analysis. The findings yielded that there was a positive relationship between intangible assets and non-financial firms listed at NSE; with a model as follows Y = 7.042 + 0.675X + ԑ It was therefore concluded that managing intangible asset structure contributed betterment and profitability of non-financial firms’ listed at Nairobi Securities Exchange, Kenya.

Entropy-TOPSIS Method Approach: A Comprehensive Quarterly Assessment with Application in Turkey's Cement Sector

The objective of this research is to determine the financial performance of Turkish cement firms using quarterly data from the period between 1997 and 2022 through the Technique for Order Preference by Similarity to Ideal Solution (TOPSIS). The research takes into account company mergers that occurred in 2020 and analyzes two distinct periods: from 1997 to 2020, and post-2020. Fourteen companies were examined in the first period, while ten companies were assessed in the latter period. To measure financial performance, ten common financial ratios selected based on literature were utilized. Determining the importance of these financial ratios is a crucial step in multi-criteria decision-making techniques; hence, the entropy method was employed to address this issue. According to empirical results, before the company mergers, UNYE and MARDIN cement firms were observed to consistently perform well financially, often ranking at the top based on the financial parameters considered. However, after the merger, it has been noted that BUCIM consistently held the top position in every quarter.

ARTIFICIAL INTELLIGENCE INVESTMENT, REALISTIC REPORTS, AND FINANCIAL LOSS

During audit planning, auditors examine the business of different firms. Still, the target is to minimize the discrepancy in the real planned financial statement of inspection and summary reports of internal audits. On the other hand, expenditures on artificial intelligence have been increasing in Turkish firms; according to the National Artificial Strategy document, AI will be part of every organizational process, including internal audits. Moreover, the literature supports a positive relationship between internal audits and firms’ decreasing capital loss. So, this research aims to analyze the relationship between AI expenditures, internal audit reports, and the firms’ historical loss. To reach this aim, suitable data was analyzed from 732 incorporated companies that are members of the Chamber of Trade and Industry/Tekirdag/Turkey. Structural equation modeling results show that AI investments decrease the discrepancy between financial statements and internal audit reports (β=-0.045). On the other hand, discrepancies found in the internal audit reports compared to real financial statements are increasing firms’ financial losses by almost 10% (β=.118). In other words, investing in AI contributes to more realistic financial reports, resulting in fewer financial losses. From this perspective, this study is one of the leading studies that connects AI investment to internal audits and the financial performance of Turkish firms.

Measuring Hotel Financial and Non-Financial Performance in Thailand: The Application of Technology-Organization-Environment (TOE) Framework

Guided by the Technology-Organization-Environment (TOE) framework, the current study aims to test the impacts of organizational factors, technological factors, and environmental factors on the financial and non-financial performance (or goals) of hospitality firms. Unlike several empirical studies in the past, this study attempted to compare the effects of these factors on financial and non-financial performances. The authors proposed the contributions with clearer and more specific recommendations and a greater understanding of how managers can improve and adjust their strategic plan and implementation to achieve long-term firm performance. The data analysis was structural equation modeling. Prior to the data analysis, reliability and validity tests were conducted to certify the quality of the data. After screening the data carefully, based on 350 hospitality firms in Thailand, including 3–5-star hotels in Thailand representing all parts of the country, the results indicated that organizational factors and technological factors had significant effects on both financial and non-financial performance. The environmental factor demonstrated no significant effect on financial and non-financial performance. Moreover, for the theoretical contribution, this study provided empirical research by applying the TOE framework in the context of the hospitality industry, presenting that organizational factors and technological factors had significant impacts on the firm performance. Discussion with the past literature provided deeper insights into the findings. Research conclusions and practical recommendations were also provided.

How does the interaction of digitalization and servitization contribute to manufacturing financial performance? The intermediary effect of manufacturing innovation performance

Digitalization and servitization are two crucial transition pathways for manufacturing firms, with their relationship explored by some existing studies. However, there is limited research on the mechanism of their interaction's effect on the firm financial performance. To address the gap, this paper draws on service-dominant logic, resource-based view and dynamic capabilities theory to establish a theoretical model. A sample of 567 Chinese manufacturing firms is selected, and a mediated moderation model is used to explore this mechanism. The findings indicate that the interaction between digitalization and servitization has a positive effect on the firm financial performance, with firm innovation performance partially mediating the relationship. Besides, heterogeneity analysis reveals that this interactive effect is mainly manifested in capital and technology-intensive manufacturing sectors. Therefore, this paper suggests managers in manufacturing firms promote the interaction between digitalization and servitization, leveraging their synergy to advance the sustainable long-term development of both the manufacturing firm and industry.