Operating Income Research Articles

Building Resilient Financial Performance: a Case Study of Indonesian Islamic Banks in The Perspective of SDGs

Research Aims: This study examines the impact of financial indicators—Non-Performing Financing (NPF), Financing to Deposit Ratio (FDR), Capital Adequacy Ratio (CAR), and Operating Expenses to Operating Income (BOPO)—on the Return on Assets (ROA) of Indonesian Islamic banks, aiming to contribute to SDG 8 by enhancing understanding of financial performance factors. Methodology: A quantitative approach is applied using secondary data from Indonesia's Financial Services Authority (OJK) covering 2018–2022. Multiple linear regression analysis identifies significant factors influencing ROA. Research Findings: The study finds that NPF, FDR, CAR, and BOPO all significantly affect ROA. Specifically, while NPF has a positive but insignificant impact, FDR, CAR, and BOPO exhibit negative and significant effects on ROA, suggesting that Islamic banks should focus on credit quality, capital adequacy, and operational efficiency. Theoretical Contribution: This research provides novel insights by exploring the financial ratios' influence on ROA within Indonesian Islamic banks, contributing to the limited literature in this specific area and offering implications for the sector's sustainability in line with SDG 8. Research limitation and implication: The study is limited to secondary data from nine banks over five years. Future research could expand to more banks or explore other performance measures. The findings offer practical implications for improving the financial stability and growth strategies of Islamic banks.

Research on Transformation and Upgrading of Equipment Manufacturing Industry and Optimization of Tax Policy Discrepancy: Case of Hebei Province

Operating income of Hebei equipment manufacturing industry exceeded one trillion yuan. In order to further promote the transformation and upgrading, in recent years, the Hebei Provincial Tax Bureau of the State Administration of Taxation has implemented and continued a series of national tax support policies and achieved phased results. However, due to some objective and realistic factors, Hebei equipment manufacturing industry is still lacking. This research takes different stages of enterprise operation as nodes, and gradually sorts out, studies and analyzes the current tax policies according to the links. The results highlight the effectiveness mechanism of the current tax policies for the development of equipment manufacturing industry based on the research. Moreover, based on a variety of real data found in this paper, the data of Hebei equipment manufacturing industry is compared in multiple dimensions to objectively present problems and shortcomings. This paper focuses on the transformation and upgrading of Hebei equipment manufacturing industry and tax policy in a small-cut view and makes policy optimization suggestions based on the tax policy gap, in order to provide reference for the better development of Hebei equipment manufacturing industry.

The Influence of Loan to Deposit Ratio (LDR) and Operating Costs on Operating Income (BOPO) on Return on Assets (ROA)

This study examines the influence of LDR and BOPO on ROA at a bank in Bandung. Return on Assets (ROA) highlights the Company's ability to produce revenue from its operations by efficiently using its assets. Factors affecting Return on Assets (ROA) encompass the Loan to Deposit Ratio (LDR) and the Operating Expenses to Operating Income Ratio (BOPO), all of which impact ROA. The study's population consisted of four years of financial records from a bank in Bandung, encompassing all four quarters. The sample was selected using the time series approach, consisting of 16 financial reports from 2018 to 2021. The applied data testing method was multiple linear regression, utilizing a significance level of 5% alpha. The findings indicated that LDR did not exert a significant influence on ROA. Despite LDR exhibiting a positive coefficient, the significance value is above the conventional threshold, suggesting that the impact of LDR on ROA is minimal and statistically insignificant. Conversely, BOPO substantially impacts ROA, with a negative coefficient and a minimal significance value. The rise in BOPO, signifying diminished operational efficiency, adversely affects ROA, suggesting that elevated operating costs diminish the bank's profitability. Subsequent research indicated that the regression model accounts for most of the variation in ROA, demonstrating a robust association between LDR and BOPO with ROA. It is advised that the Company's management concentrate on optimizing operating cost management to enhance ROA. Implementable strategies encompass conducting frequent audits to identify and mitigate waste and enhancing the efficiency of operational procedures. Despite LDR not demonstrating a significant impact, it is crucial to monitor this ratio to ensure the bank's liquidity and financial stability. This study also advocates for additional research to investigate other variables that may influence ROA, along with a comprehensive examination of operational elements to enhance profitability.

The Influence of DPK, CAR, NPF, FDR, and BOPO on the Profitability of Sharia Banks Listed on the Indonesia Stock Exchange in 2018-2022

In the modern era, the banking industry is one of the key sectors that make a significant contribution to the economy of a country, including Indonesia. With the enactment of Law No. 10 of 1998 on banking which was later updated into Law No. 21 of 2008 on Islamic banking, the Indonesian banking industry has received a positive response. This study aims to examine the contribution of several factors to the financial performance of banks. These factors are Third Party Deposits (DPK), Capital Adequacy Ratio (CAR), Non-Performing Financing (NPF), Financing to Deposit Ratio (FDR), and Operating Expenses Operating Income (BOPO). The descriptive statistical analysis method is used in this study, involving the incorporation of each variable with the average value, minimum value, maximum, and standard deviation. The results of the analysis show that deposits have a negative impact on profitability, CAR has a positive and significant impact on profitability, NPF has a positive and significant impact on profitability, FDR has a negative and significant impact on profitability, and BOPO has a negative and significant impact on profitability. Using Signal Theory, this study highlights the importance of management actions in conveying information to investors to reduce information inequality between management and external parties. This study has limitations such as the use of secondary data that has been published with time series data for only five years (2018-2022), and only involves five independent variables.

Is digital technology innovation a panacea for carbon reduction?

This paper analyses the impact of digital technological innovation on the carbon emission intensity of enterprises and conducts an empirical test based on the data of listed enterprises in China from 2009 to 2021. The study finds that (1) digital technological innovation can significantly reduce carbon emission intensity. (2) Enterprises’ digital attention and investment can significantly increase their operating income but not reduce carbon emissions. Digital technology patents can significantly reduce carbon emissions in the short term. In the long run, even new digital technologies will have a carbon rebound effect once they are deployed on a large scale. Therefore, digital technology innovation is still challenging in the long run to realize the synergy effect of “increasing production and reducing carbon.” (3) Mechanism tests show that digital technology innovation can reduce carbon intensity by improving operational efficiency, promoting cleaner production, and improving human capital. (4) If the government pays moderate attention to digital development, digital technological innovation by enterprises can significantly reduce carbon intensity. Meanwhile, this effect is more significant in regions with higher levels of intellectual property protection. Digital technology innovation can significantly reduce carbon intensity for mature, high-tech, and technology-intensive enterprises.

Analisis Pengaruh Rasio-Rasio Keuangan Terhadap Rasio Beban Operasional-Pendapatan Operasional (BOPO) pada Bank Umum Syariah di Indonesia

This research aims to determine the influence of Islamic banking financial ratios in the form of Return on Assets (ROA) Ratio, Non Performing Financing (NPF) Ratio, Financing to Deposit Ratio (FDR) and Total Asset Turnover (TATO) on the Operational Cost-Operational Income Ratio (BOPO) at Sharia Commercial Banks in Indonesia. This research uses a quantitative approach with sample data totaling 7 (seven) sharia commercial banks out of 13 (thirteen) sharia commercial bank populations registered with the Financial Services Authority. Research data uses secondary data for the annual period in the period 2010 - 2023. By using the ARDL (Autoreggressive Distributed Lag) panel model using the PMG (Pooled Mean Group) method, the research results show that in the panel, it turns out that the Leading Indicator is the effectiveness of the variable in controlling the BOPO Ratio at Sharia Commercial Banks in Indonesia is Return on Assets (ROA), where ROA significantly influences the BOPO Ratio at Bank Muamalat Indonesia, Bank Aceh Syariah, Bank Riau Kepri Syariah, Bank Jabar Banten Syariah, Bank Mega Syariah, and Bank NTB Syariah, with stable positions in the short and long term. Of the 7 (seven) Sharia Commercial Banks that are the objects of research, there are 4 (four) banks that are leading indicators of the effectiveness of sharia banking in influencing the stability of the BOPO ratio, namely: Bank Aceh Syariah, Bank Riau Kepri Syariah, Bank Jabar Banten Syariah, and Bank Mega Syariah through ROA, NPF, FDR, and TATO. Financing to Deposit Ratio (FDR) is also capable of being a Leading Indicator of variable effectiveness to influence the BOPO Ratio at Bank Muamalat Indonesia, Bank Aceh Syariah, Bank Riau Kepri Syariah, Bank BCA Syariah, Bank Jabar Banten Syariah, Bank Mega Syariah, and Bank NTB Syariah, However, its position is unstable in the short and long term.

ANALISIS RETURN ON ASSETS (ROA), LOAN TO DEPOSITS RATIO (LDR) DAN BEBAN OPERASIONAL PENDAPATAN OPERASIONAL (BOPO) UNTUK MENILAI KINERJA PERBANKAN PADA PT BANK RAKYAT INDONESIA (PERSERO) Tbk

This study aims to analyze the financial performance of PT Bank Rakyat Indonesia (Persero) Tbk during the 2016-2020 period using Return on Assets (ROA), Loan to Deposit Ratio (LDR), and Operating Expenses to Operating Income (BOPO) as the main indicators. The data used is the annual financial reports of BRI, which are processed using a descriptive quantitative approach. The results show that BRI's ROA declined from 2.67% in 2016 to 1.29% in 2020, but remained above the minimum bank health threshold. The LDR fluctuated during this period, with the highest ratio at 89.5% in 2018, but it did not meet the healthy bank ratio standard. BOPO also decreased, yet it did not reach the expected efficiency level as per Bank Indonesia's standard. Overall, BRI demonstrated healthy asset productivity performance but requires operational efficiency and fund utilization improvements. This study recommends enhancing liquidity and operational efficiency to improve the bank's overall financial performance. Keywords: Financial Performance; Return On Assets, Loan to Deposit Ratio; Beban Operasional Pendapatan Operasional

Analisis Efisiensi dan Produktivitas Bank Pembiayaan Rakyat Syariah di Jabodetabek Periode 2019-2023

This research aims to analyze the efficiency and productivity of BPRS in Jabodetabek, totaling 17 BPRS during the 2019-2023 observation period. This research uses the BCC or VRS model as a basic model in analyzing bank efficiency and productivity using Data Envelopment Analysis and the Malmquist Productivity Index. This research uses input variables, namely third party funds and operational expenses, as well as output variables, namely operational income and financing. The results obtained from efficiency analysis using DEA show that there are still many BPRS in Jabodetabek that have not achieved maximum efficiency. The average Jabodetabek BPRS efficiency score fluctuates from year to year during the period 2019 to 2023, with an overall average efficiency of 0.716648. Meanwhile, the average productivity of BPRS in Jabodetabek is 1,102. In 2020 there was a decline in the efficiency and productivity of BPRS due to the Covid-19 pandemic. But Back shows recovery in 2021 to 2023.

Analisis Non Performing Loan, Biaya Operasional Pendapatan Operasional, dan Free Cash Flow Terhadap Nilai Perusahaan

The research was aimed at determining the influence of Non Performing Loan, operating expenses to operating income, and free cash flow on firm value conducted in the banking sektor listed on the Indonesian Stock Exchange periode 2018-2022. The object of the research were Non Performing Loan (X1), Operating Expenses to Operating Income (X3), free cash flow (X3), and Firm Value (Y). the research used descriptive and associative methods with quantitative approach. The technique of sampling deployed in the research was non probability sampling approach, namely the purposive sampling technique. The techniques of analysing data applied were test of coefficient of multiple correlation and coefficient of determination, multiple linear regression test, partial test (t-test), and simultaneous test (f test). Based on the result of the research show that there is a relationship of Non Performing Loan, operating expenses to operating income, and free cash flow toward firm value which is aggregated to 0,659, indicating that the relationship of Non Performing Loan, operating expenses to operating income, and free cash flow toward firm value is included to a strong relationship criteria. Moreover, the result of partial test show that Non Performing Loan negative and significant influence toward firm value, operating expenses to operating income negative and significant influence toward firm value, and free cash flow has positive and insignificant influence toward firm value.

Does managerial market timing with stock repurchases exist in stock market?: Evidence from Thailand

This study examines the presence of managerial market timing with stock repurchases in the Stock Exchange of Thailand (SET) from 2008 to 2017. We find that managerial market timing with stock repurchases does not exist in an emerging market (namely, Thailand) supporting the theory of pseudo market timing, as the probability of stock repurchases is not related to undervalued stocks. However, there are other motivations for conducting stock repurchases rather than managerial market timing including the distribution of excessive cash flow due to high operating income and no good future investment opportunity, and the change of capital structure because of underleverage. Our findings are supportive to the free cash flow, capital market allocation, and trade-off theories. In addition, we also find that timing firms tend to suffer from the deterioration of Tobin q ratio, market value added (MVA) and economic value added (EVA), and they do not rebalance their capital structure after this event.

President’s Column: SPE Finances

_ Editor’s Note: The November edition is a written column only, with the vodcast set to resume next month. _ SPE finances are not the most interesting or exciting topic for most members, and you will be forgiven if you pass this column. You may not be interested at all if you only want to know what SPE does. However, you may be interested in this column to understand how SPE functions financially. SPE is not a commercial business, but it has an events business that de facto finances most of its other services to members—direct membership fees are a relatively small part of SPE’s revenue. In the current model, if the events business fails, SPE collapses. Finances are always important, but they have become critical in the current context, including the 2015 downturn and the 2020 COVID-19 pandemic, especially the latter, which have brought an existential threat to our Society. As shown in Fig. 1, between 2014 and 2023, we lost 65% of our revenue, 200% of our profit (Net Operating Income), and 50% of our net assets. Even last year, 3 years after the pandemic, we still had an operational deficit of $3.6 million, and this was expected to be a “good year” with Offshore Europe and two Offshore Technology Conference events. Operationally, we are still hemorrhaging money. SPE’s finances are public, but I thought it would be good to present this information in plain English and with illustrative graphs to explain how we operate financially and how SPE can prevail while its traditional business model is being challenged. I have occasionally heard and read severe statements about SPE’s financial management, allusions to staff being oversized and overpaid, our lack of willingness to adapt, etc. So, it is also a good opportunity to clear up some of these misunderstandings. Conventions and Definitions Until 2024, SPE’s fiscal year (FY) started in April and ended in March. For example, FY24 started on 1 April 2023 and ended on 31 March 2024. This has recently changed and will be explained below. The numbers presented in this document are consolidated in USD (SPE has several offices handling different currencies) and corrected for US inflation using factors listed in Fig. 2. The reference is the USD from the middle of FY24, i.e., October 2023. One important result to gauge our operational results is our Net Operating Income (NOI), which would be equivalent to profit if SPE were a commercial venture.

Self-Owned or Outsourced? The Impact of Farm Machinery Adoption Decisions on Chinese Farm Households’ Operating Income

Using farm machinery plays a significant role in easing the issue of slowing growth of operating income among farm households in China. Drawing data from CFPS2018, this study adopts a multinomial endogenous switching regression (MESR) to analyze the factors influencing farm households’ choices regarding self-owned farm machinery and outsourced machinery services, as well as their subsequent impact on operating income. The results of the study show that the characteristics of the head of household, family, village, and region have a significant impact on the farm households’ selection of whether to use self-owned machinery or outsourced services. Furthermore, the exclusive use of self-owned farm machinery and the combined use of both self-owned and outsourced machinery substantially enhance farm households’ operating income. An additional analysis indicates that these two types of machinery are complementary, and their combined use generates a superimposed effect that further boosts income. These findings suggest that the combined use of self-owned and outsourced machinery is optimal for farm households who wish to expand their operating income.

Pengaruh Kecukupan Modal dan Inefisiensi terhadap Profitabilitas Bank Pembangunan Daerah di Indonesia

The purpose of this study is to examine whether capital adequacy and inefficiency affect the profitability of regional development banks in Indonesia for the period 2015-2022. The data analysis technique uses panel data regression. The population used is 26 Regional Development Banks listed in the Regional Development Bank Association. The sample consisted of 24 BPD banks with 192 observation data, which were carried out by purposive sampling. In this study, capital adequacy is measured using Capital Adequacy Ratio (CAR), Inefficiency is measured by Operating Expenses Operating Income (BOPO) and profitability is measured using Return On Asset (ROA). The results showed that capital adequacy has a significant positive effect on profitability, and inefficiency has a significant negative effect on profitability

Village Organization and Sustainable Growth of Farmers’ Income: An Empirical Study Based on Dynamic Survey Data of the Labor Force in China

Common prosperity is the core goal of rural revitalization, and the sustainable growth of farmers’ income is an inevitable requirement. This study uses CLDS2014-2018 village- and family-level questionnaire data to reveal how the degree of village organization affects the sustainable growth of farmers’ income, thus providing a reference for local government decision-making to promote the increase in farmers’ income and narrow the income gap at the village level. The results show that the degree of village organization can significantly affect farmers’ income, and the analysis results of the degree of formal organization are consistent with this. Specifically, for every 1% increase in the degree of village organization, the per capita household income will increase by 0.324%, among which, the wage income will increase by 0.226%, the operational income will increase by 5%, the property income will increase by 0.008%, and the transfer income will increase by 0.042%. The estimation results obtained by using instrumental variables are consistent, and the results are robust. At the same time, improving the degree of village organization can also significantly increase the proportion of farmers’ non-agricultural income and narrow the income gap among farmers. On the impact of heterogeneity, it was found that the geographical distance between villages and county and township governments, as well as the political identity and education level of farmers, will affect the role of the degree of organization. The results of the mechanism analysis show that improving the degree of village organization is mainly achieved by promoting the circulation of agricultural land, socializing the service of agricultural machinery, and providing industrial and commercial capital to the countryside to increase farmers’ income. The research revealed that the modernization of rural governance should be accelerated and the degree of village organization should be improved, especially the degree of formal organization, so as to build benign trust and a cooperative relationship between village committees and villagers and implement policies and measures that improve the income of farmers according to local conditions. At the same time, this will strengthen the publicity and education of party members to improve the proportion of rural party members and the education level of farmers.

Risk-based regulation and supervision of second-tier banks: experience of EU countries

The aim of the study was to determine the impact of increased capital adequacy standards of second-tier banks on their performance. The study is based on second-tier banks of EU member states, as these countries are the first to implement the Basel Committee recommendations, so their experience should be studied and taken into account when building risk-based regulation of second-tier banks of Ukraine and Kazakhstan. The study covers the period of 2009–2022, as the Basel III regulations were adopted after 2008, and they began to operate for the second-tier banks of EU member states in 2013. The study was conducted using econometric modelling with an analysis of the dependence of banking indicators on the capital structure established by Basel III. Functional interrelationships of the dependence of Net Interest Income, Profit, Return on Assets, Return on Equity, Risk Costs to Operating Income were tested. The impact of capital adequacy requirements on the performance of second-tier banks was determined: capital adequacy requirements have a positive impact on net interest income and profit of second-tier banks. The obtained results can be used to substantiate increasing capital adequacy requirements to increase the reliability of the banking system as an element in the system of factors of economic growth of the national economy.

Samosa Kulit Buah Naga dan Saus Buah Naga Pada Perusahaan Kebun Naga Poernama Garut

This research is motivated by the lack of creativity in samosa processing, the author uses dragon fruit peel filling with the aim of utilizing commonly wasted materials, and introducing to the public that dragon fruit peel can also be processed not only the meat that can be eaten, which of course is no less high nutrition with dragon fruit meat. The method used in this research is research and development, by conducting a series of experiments and development using a secoring scale hedonic test involving 25 panelists. The results of the study determine the standard recipe, namely dragon fruit skin 200 g, chicken 100 g, onion 50 g, paprika 50 g, salt 3 g, flavoring 2 g, curry powder 5 g. The results of the main test calculation of the organoleptic test of Samosa filled with dragon fruit skin and dragon fruit sauce have an average value of 88.8%. . The results of the calculation of business analysis of samosa filled with dragon fruit peel and dragon fruit sauce are Cost of goods per portion of Rp 9,760, Total variable cost of Rp 10,340 Selling price per portion of Rp 25,000, Fixed cost of Rp 1,625,000, BEP 111 units / month, Target Operating income of Rp 4,000,000 will be achieved if sales reach 111 servings / month or with sales of 13 servings / day. Suggestions in this study, namely, in the drying process it is recommended until the water content in the dragon fruit skin comes out a lot so that when cooking it is not watery.

Innovation as a Foundation of Competitiveness of Smes on the Colombo-Venezuelan Frontier

Objective: This article is the result of a research carried out in a group of SMEs with the objective of analyzing innovation in this business commercial segment. Innovation has become a determining factor for the success of modern organizations due to their ability to generate products and services that satisfy customer needs. Theoretical Framework: Several authors with extensive research experience were consulted in order to add a theoretical construct to the research regarding innovation in organizations. Method: The methodology adopted for this research was executed under a quantitative, descriptive and analytical approach, with a field, non-experimental and transactional design. The information was obtained directly with the application of a structured instrument to an intentional sample applied to ten managers of SMEs on the Colombian-Venezuelan frontier. Results and Discussion: It was established that these do not receive adequate attention from management since all the evaluated indicators were located at a medium and low level in an instrument designed with a Likert scale. Research Implications: It can be inferred that the managers in question do not make significant implementations or changes in the products or services they market, failing to generate economic value due to the non-implementation of strategies that lead to an increase in operational income within the managed organizations. Originality/Value: The research carried out under the positivist paradigm due to its quantitative approach based on the rigorous application of the scientific method, is characterized by the possibility of generalization, which allows based on particular results to proceed to make generalizations that can be applied in similar circumstances.

Pengaruh Non Performing Loan, Loan To Deposit Ratio Dan Biaya Operasional Pendapatan Operasional (BOPO) Terhadap Return On Asset Pada Sektor Perbankan Yang Terdaftar Di Otoritas Jasa Keuangan (OJK) Periode 2017-2021

The purpose of this research is to identify the impact of non-performing loans (NPL), loan to deposit ratio (LDR), and operational income operating costs (BOPO) on return on assets (ROA) in corporate banking. This research was conducted on banking sector corporations registered with the Financial Services Authority (OJK) in the 2017-2021 period. Purposive sampling was used as a sampling method involving 64 sample issuers. Quantitative data and secondary data used in research. Observation and documentation studies are used as collection techniques. Multiple linear regression analysis was used as a data analysis technique. The research results indicate that simultaneously, return on assets (ROA) is significantly influenced by non-performing loans (NPL), loan to deposit ratio (LDR) and operational income operating costs (BOPO). Partially, return on assets (ROA) is significantly negatively affected by non-performing loans (NPL) and operating income operating costs (BOPO), on the other hand, return on assets (ROA) is significantly influenced positively by the loan to deposit ratio (LDR).

The Influence Of Capital Adequacy Ratio (CAR), Non-Performing Loan (NPL), Loan To Deposit Ratio (LDR), And Operational Costs To Operating Income (BOPO) On Return On Asset (ROA) In Banks Listed On The Indonesia Stock Exchange

The objective of this research is to determine the effect of the Capital Adequacy Ratio (CAR), Non-Performing Loan (NPL), Loan to Deposit Ratio (LDR), and Operational Costs to Operating Income (BOPO) on Return on Assets (ROA) in banks listed on the Indonesia Stock Exchange. The sample was selected using purposive sampling, with a total of 32 banks. The research data were tested using multiple regression analysis. The results of the study show that the Capital Adequacy Ratio (CAR) has no effect on Return on Assets (ROA), while Non-Performing Loan (NPL), Loan to Deposit Ratio (LDR), and Operational Costs to Operating Income (BOPO) have a negative and significant effect on Return on Assets (ROA). y.

Joint Planning Method of Shared Energy Storage and Multi-Energy Microgrids Based on Dynamic Game with Perfect Information

Under the background of the Energy Internet and the shared economy, it is of great significance to explore the collaborative planning strategies of multi-energy microgrids (MEMGs) and a shared energy storage operator (SESO) supported by shared energy storage resources. In this context, a joint planning method of SESO and MEMG alliances based on a dynamic game with perfect information is proposed in this paper. First, an upper-level model for energy storage capacity configuration and pricing strategy planning of SESO is proposed to maximize the total planning and operational income of SESO. Then, a lower-level model for the optimal configuration of MEMGs’ alliance considering SES is proposed to minimize the total planning and operational costs of the MEMG alliance. On this basis, a solving algorithm based on the dynamic game theory with perfect information and the backward induction method is proposed to obtain the Nash equilibrium solution of the proposed bi-level optimization models. Finally, a case study with one SESO and an alliance consisting of five MEMGs is conducted, and the simulation results show that the proposed bi-level optimization method can increase SESO’s net income by 1.47%, reduce the average planning costs for each MEMG at least by 1.7%, and reduce model solving time by 62.9% compared with other counterpart planning methods.