Financial Ratios Of Profitability Research Articles

Impact of bank financial technology on the performance of banks in the European Union

This article examines how financial technology determines bank performance in different EU countries. The answer to that question would allow banks to choose their development policy. The paper focuses on the main and most popular bank services that are linked to financial technology. A SWOT analysis of FinTech is also presented to show the benefits and drawbacks of FinTech. FinTech-based services are very diverse and are provided by financial firms and banks alike. This paper looks at the financial technology provided by banks: internet usage (internet banking), number of ATMs, credit transfers in a country, percentage of the population in a country holding a debit or credit card and whether that population has received or made a digital payment. Using the multi-criteria assessment methods of CRITIC and EDAS, the authors analysed and compared the countries of the European Union and the financial technology used in them. As a result of the application of these methods, the EU countries under consideration were ranked in terms of the use of financial technology. Subsequently, three banks from different countries with different levels of the use of financial technology were selected for the study. For these banks, financial ratios of profitability were calculated to characterise their performance. Correlation and pairwise regression analyses between the banks’ profitability ratios and financial technology were used to assess the relationship and influence between these ratios. The main conclusion of the study focuses on the extent to which financial technology influences the performance of banks in the selected countries. It is likely that further research will try to take into account the size of the country’s population when analysing all financial technologies. Researchers also needed to find out what influence financial technologies have on the such financial indicators as operational efficiency (costs), financial stability, and capital adequacy.

Exploring Construct Measures Using Rasch Models and Discretization Methods to Analyze Existing Continuous Data

ABSTRACT It is meaningful to create a comprehensive score to extract information from mass continuous data when they measure the same latent concept. Therefore, this study adopts the logic of psychometrics to conduct scales on continuous data under the Rasch models. This study also explores the effect of different data discretization methods on scale development by using financial profitability ratios as a demonstration. Results show that retaining more categories can benefit Rasch modeling because it can better inform the models. The dynamic clustering algorithm, k-median is a better method for extracting characteristic patterns of the continuous data and preparing the data for the Rasch model. This study illustrates that there is no one-way good discretization method for continuous data under the Rasch models. It is more reasonable to use the traditional algorithms if each continuous data variable has target benchmark(s), whereas the k-median clustering algorithm achieves good modeling results when benchmark information is lacking.

Rasio Profitabilitas dan Kinerja Saham

This study aims to test the effect of Return on Equity (ROE), Return on Investment (ROI) and Operating Profit Margin (OPM) on stock performance. This research was conducted on basic industrial and chemical sector manufacturing companies listed on the IDX. 77 companies were used as samples with an observation number of 230 companies. The sampling method used purposive sampling with multiple linear regression analysis. This study used secondary data in the form of company financial statements downloaded through the company's www.idx.co.id and official website. The results showed that only Return on Equity has a positive effect on stock performance while the Return on Investment (ROI) and Operating Profit Margin (OPM) do not affect stock performance. This research is expected to strengthen empirical evidence regarding the influence of profitability factors on an entity's stock returns. This research has limitations, namely that it only tests the influence of fundamental factors in the form of financial profitability ratios, so that further research can involve fundamental factors outside the company's financial performance, such as macroeconomic factors.

Impact of Business Intelligence Systems on Profitability - Empirical Study

There is a research gap regarding the impact of Business Intelligence (BI) implementation on banks' profitability ratios. In particular, this relates to the financial profitability ratios of banks operating under the conditions of the Polish economy after 2015. The main research problem addressed in this study is whether the implementation of Business Intelligence systems has a positive impact on the profitability indicators of commercial banks. The main hypothesis formulated is that the use of a Business Intelligence management system between 2009 and 2020 improves the profitability of Polish commercial banks. The First Differences Generalized Method of Moments (FDGMM) panel dynamic model estimation method was used to evaluate this impact. The parameters of the models based on financial indicators were calculated for each of the selected indicators, and the analysis used those models for which the lagged BI variable, related to the timing of system implementation, proved statistically significant. Based on the obtained parameters of the models, long-term multipliers were calculated. The study determined the probability of the impact of using the business intelligence system on the selected indicators. The study was conducted on a group of the five largest out of the thirteen commercial banks listed on the Warsaw Stock Exchange in 2020. The assets of the surveyed banks comprise 50% of the assets of commercial banks in Poland. The study identified the impact of BI system use on selected profitability indicators of commercial banks. The generalized results of the study enable us to identify causal relationships between the use of the BI system in commercial banks and profitability, as measured by ROE and ROA. The research implications of this study may suggest to top management that implementing business intelligence systems can benefit the organization.

Market Reaction Analysis of The Performance from The Winners of Asia Sustainability Reporting Rating Award Companies in 2019 – 2021

Social economic and responsible business is believed to provide opportunities to build competitive advantage, increase market share, and open new markets. This assumption shows that financial and non-financial performance influence the market reaction. The company's non-financial performance can be realized through CSR disclosures disseminated to the public in a sustainability report. On the other hand, the company's financial performance can be seen through the proxies of financial ratios of profitability, liquidity, leverage, and activities as measured using data from the annual report. This study aims to see the effect of the company's performance on the market reaction caused by the information. The sample in this study were all IDX-listed companies that won the Asia Sustainability Reporting Rating Award 2019-2021. So the writer has assumed that the sample in this study has an excellent overall company performance. The data collection methods are historical data sourced from the Indonesian Stock Exchange (IDX). The data used in this research are the company's annual reports and the company's sustainability reports. After passing the classical assumption test stage, the data were analyzed using the multiple regression method. The results show that CSR disclosure, Current Ratio, and Debt to Equity ratio have a positive but insignificant effect. Meanwhile, the Return on Assets and Total Asset Turnover variables significantly positively affect the market reaction. This condition shows that even though the company has won social and environmental awards, financial performance remains a proxy with a more significant influence than non-financial performance.

ANALISIS FAKTOR INTERNAL PERUSAHAAN DAN AGENCY COST TERHADAP FINANCIAL DISTRESS PADA PERUSAHAAN RITEL

This study aims to examine the effect of financial ratios of profitability, liquidity, leverage and agency costs on financial distress. The financial ratios tested are profitability, liquidity, leverage, and agency cost ratios. This type of research is casuality research and the data used is secondary data, the population of this study is retail companies listed on the IDX for the 2018-2020 period, the sampling technique was carried out with purposive sampling techniques, based on the criteria obtained a sample of 13 companies, the data analysis used in this study used binary logistic regression. Based on the results of the research conducted, it shows the results of the profitability ratio of the liquidity ratio, the leverage ratio which has no effect on the possibility of financial distress, and agenct costs affecting the positive direction of the possibility of financial distress. Limitations in this study. First, the study was conducted only on retail companies. Second, this study only focuses on financial factors that can affect financial distress. Third, the research period is only from 2018-2020. These four studies are only focused on research variables. This research contribution can be used as a reference for companies or individuals to analyze the possibility of financial distress, and for academics it can be used as a repression for continuous research

Testing Financial Ratios on Business Values of Property and Real Estate Companies Listed in Indonesia Stock Exchange (IDX)

This study aims to examine the financial ratios of profitability and solvency to the value of the property and real estate companies in the Indonesia Stock Exchange in the period 2008 - 2018. The data used in this study are secondary data obtained from the IDX. The sample in this study are property and real estate companies listed on the Indonesia Stock Exchange in 2008-2018. Data collection is using documentation techniques, namely by looking at existing documents (financial reports and annual reports). The company's financial statements are obtained from the access website of the Indonesia Stock Exchange (www.idx.co.id) in the period 2008-2018.2018. The results of the study are the company's profitability has a significant effect on the business value of property companies and real estate companies that go public on the Indonesia Stock Exchange (IDX). Company solvency has a negative and significant effect on the Business Value of Property and Real Estate Companies that are Go Public on the Indonesia Stock Exchange (IDX). Simultaneously, the company's profitability and solvency affect the business value of property companies and real estate companies that go public on the Indonesia Stock Exchange (IDX).

Relationship between Financial Ratio and Financial Statement Fraud Risk Moderated by Auditor Quality

This study was aimed to prove the research hypothesis that there are effects of financial ratios, which consist of profitability, leverage, and liquidity on the financial statements fraud risk, and the quality of auditors are able to moderate the relationship between financial ratios to financial statements fraud. This study uses a population of manufacturing companies that publish their financial statements on the Indonesian Stock Exchange in 2016-2017 will also be summarized and inferred. This study uses purposive sampling so that the study sample amounted to 275 firm years. The dependent variable uses the financial statements fraud risk with the proxy Dechow F-score. The independent variable in this study consisted of profitability with ROA ratio, leverage using the calculation of the ratio of total liabilities to total assets, and liquidity using the calculation of the ratio of total current assets to current liabilities. The moderating variable in this study is auditor quality as a moderating variable with a dummy variable. The Hypothesis test conducted is using moderated regression analysis (MRA). The results of this study indicate that the financial statements fraud risk is influenced by financial liquidity ratios, while financial ratios of profitability and leverage have not been proven to affect financial report fraud. This study provides a contribution by providing evidence that the quality of auditors can suppress fraudulent actions on financial statements with low profitability. This research provides information to regulators to pay more attention to companies that experience liquidity problems, and become input for regulators to make rules that improve the quality of auditors.

Management of financial risks in Slovak enterprises using regression analysis

Research background: Financial risk management is the task of monitoring financial risks and managing their impact. Financial risk is often perceived as the risk that a company may default on its debt payments. The issue of the debt, default or prosperity of the company are presented in the article as one of the ways of the risk management. A prediction of corporate default is an inseparable element of the risk management. Mainly the consequences of risk are the engine of research and development of methods and models, which enable to predict economic and financial situation in specific conditions of global economies.
 Purpose of the article: The main aim of the presented article is to assess financial risks of Slovak entities, realized by the identification of significant factors and determinants affecting the prosperity of Slovak companies.
 Methods: To conduct the research we have used the data of Slovak enterprises, obtained from annual financial reports covering the year 2015 and the calculated financial ratios of profitability, activity, liquidity and indebtedness that may affect the financial health of the company were applied in the regression analysis. Realizing the multiple regression analysis, the statistically significant determinants that affect the future financial development of the company are identified, as well as the regression model of the bankruptcy prediction.
 Findings & Value added: In the research aimed at the management of financial risks in Slovak enterprises, we focused on the revelation of significant economic risk factors using multiple regression. The results suggest that the most significant predictors are net return on capital, cash ratio, quick ratio, current ratio, net working capital, RE/TA ratio, current debt ratio, financial debt ratio and current assets turnover based on which the decision about the future company default can be made. These factors are significant enough to manage financial risks and to affect the profitability and prosperity of the company.

Financial Performance Analysis of Corn-based Ethanol Enterprises in the U.S.

The objective of this study is to examine the state of financial conditions of the corn-based ethanol enterprises in the U.S. from 2009 to 2014. Ethanol enterprises are categorized as small, those producing up to 50 million gallons per year (MGY) and large producing between 50 and 100 MGY. Panel data from the annual financial reports submitted to the Securities and Exchange Commission (SEC) are used to calculate the financial ratios of profitability, asset turnover, leverage, liquidity and operating margin. Results show that the corn-ethanol enterprise is moving into the direction of positive returns of investment. Associated factors for the profitability are found to be operating margin ratio, liquidity, leverage ratio, and subsidy. Findings of this study have an implication to the development of the cellulosic ethanol enterprise, which suggests the utilization and valuation of its co-products for revenue generation to improve economic financial success.

Entrepreneurship and business survival in times of crisis: The case of Barcelona

Objeto: El trabajo que se presenta en este articulo es la primera parte de un estudio sobre las estrategias llevadas a cabo por las empresas en epocas de crisis. Este primer articulo analiza las caracteristicas financieras de las empresas creadas en Barcelona en los inicios de la crisis y que han sobrevivido durante la misma. Este estudio pretende contrastar las caracteristicas financieras de las empresas analizadas con las medidas llevadas a cabo para mantener su rentabilidad en epocas de crisis y determinar si existen patrones de comportamiento distintos entre empresas creadas en sectores industriales y no industriales. Diseno/metodologia: Analisis estadistico-descriptivo de las medias y variaciones de los principales indicadores financieros y de recursos humanos que se relacionan con las medidas tomadas por las empresas en epoca de crisis. La base de datos utilizada ha sido el SABI y el periodo de referencia 2008-2013. Aportaciones y resultados: Las empresas creadas en Barcelona en los inicios de la crisis y que han sobrevivido presentan algunos rasgos comunes: muestran un EBITDA positivo, los recursos propios constituyen una fuente relevante de financiacion, tienden a reducir su nivel de endeudamiento o se disminuye inversion. Los ratios de la rentabilidad financiera son muy bajos ya que el patrimonio neto de la empresa es alto y la deuda es baja. Referente a los indicadores de recursos humanos, nos indican la importancia de las empresas de nueva creacion en la generacion de empleo y sus tasas de productividad son altas. Valor anadido: Determinar las caracteristicas financieras de las empresas creadas en los inicios de la crisis y que sobreviven en Barcelona en epoca de crisis para determinar si siguen medidas para mantener su rentabilidad. La existencia de un conjunto de medidas estadisticamente significativas puede servir de guia a los emprendedores del futuro asi como de las politicas publicas de apoyo a los emprendedores.

DEFAULT RISK OF THE CONSTRUCTION COMPANIES IN RELATION TO THEIR FINANCIAL CONDITION

The construction industry is highly sensitive on economic cycle. So, construction companies have experienced hard times in the crisis period. The aim of the article is to identify, compare and evaluate financial position of companies with different payment habits in the Czech construction industry in the period 2008 – 2012 using individual data and suitable statistical methods (Kolmogorov-Smirnov test at the significance level of α = 0.05). The article also focuses on evaluation of the default risk coming from construction companies. The overall financial condition is analyzed through prediction models IN05 and Altman’s Z Score for emerging markets. Financial ratios of profitability, productivity, liquidity, indebtedness and turnover evaluate separately each area of financial situation. Based on the sample of 3 438 construction companies, the results show that payment habits increase with higher profitability (short-term and long-term), higher liquidity, lower debt ratio and higher liability turnover. Payment habits of construction companies could be better. Frequency analysis shows that 84.12 % of construction companies have proper, above-average or average payment habits with no later than 30 days delay in settlement of debt after maturity. However, 11 % of solvent companies have poor payments habits. Such companies are risky for their suppliers with respect to the secondary insolvency phenomenon.

ANALISIS PENGARUH RASIO KEUANGAN RENTABILITAS TERHADAP PENDAPATAN MARGIN MURABAHAH BANK SYARIAH (Studi Kasus pada PT. Bank Mega Syariah Periode 2005-2012)

This research is aimed to examine the affect of financial profitability ratios to ward murabahah margin revenue especially in PT. Bank Mega Syariah during 2005-2012. Financial profitability ratios consist of Return On Asset (ROA), Return On Equity (ROE), Net Core Operational Margin (NCOM), and Operational Efficiency Ratio (OER). The data analysis technique uses multiple linier regression with the method of Ordinary Least Square (OLS). The hipothesys testing in this research uses t test for individual parameter and F-test for collective parameter with the significance level 5%. In addition, to meet the assumptions of OLS in performing multiple linear regression, also included normality test, autocorrelation test, heteroskedasticity test, and multikolinearity test. The results show that simultanously, financial profitability ratio significantly affect the murabahah margin revenue, but individually the Operational Efficiency Ratio (OER) does not make any affection. Overall, the regression model is good enough, because the predictive ability of financial profitability ratios toward murabahah margin revenue is 70%, and 30% are affected by some factors that are not included in this model of research.

The Relationship between Financial Performance and Total Factor Productivity: Evidence from the Czech Agricultural Sector

Agriculture is an important sector of the economy which is often monitored by the government and which is often subject of international disputes. Given the importance of this sector, it is necessary to measure its performance. In this article, we calculated and compared the development of two measures of performance of the agricultural sector of the Czech Republic: the total factor productivity measured by the Fisher index of productivity, and the financial performance measured by three profitability ratios: return on equity, return on assets and return on sales. It is considered that productivity and financial performance do not necessarily move in the same direction. However, we observed a connection between these measures and suggested that this dependence is due to the data interrelatedness. We suggest that total factor productivity, when measured by monetary aggregates such as value added, will be positively correlated to the financial profitability ratios when measured on the basis of the same data. However, for the Czech sector, data are not available due to the transition from the centrally-planned economy to the market economy in 1989 and a turbulent development since that time

Shareholder Benefits and Firm Performance: An Empirical Analysis of International Acquisitions by Firms from a Developing Economy

Previous research on international mergers and acquisitions has not looked at the valuation consequences of international acquisitions by firms from a developing economy. This study examines the announcement effect and the post-acquisition long-term performance of 96 Indian international acquisitions of U.S. firms made in the period 1999-2005. The study also explores the impact of the Indian acquiring firms' U.S. acquisitions on their underlying operating variables, and risk diversification. We find that while the international acquisition announcements by Indian firms create significant short-term shareholders' wealth, in the long-run international acquisitions have a negative impact on the shareholders' wealth. We also find a significant decrease in the acquiring firms' financial profitability ratios, though there is an evidence of risk-reduction due to global diversification.

An integrated DSS for financing firms by an industrial development bank in Greece

This paper presents an integrated DSS for the analysis and financing of firms by an industrial development bank in Greece. Firstly, the system evaluates the financial performance of firms (financial ratios of profitability, managerial performance, solvency) during a 5-year period and allows inferences about their development tendencies. Furthermore, multivariate statistical techniques (discriminant analysis, principal components analysis) are available to aid in the identification of the most significant financial ratios and in the grouping of the firms in coherent categories. Finally, a multi-criteria method is used, which ranks the firms from the most dynamic to the bankrupt and in this way dynamic to the bank to select the less risky for financing. The capabilities of the system are illustrated with actual data provided by the bank.