Key Financial Indicators Research Articles

Highlighting Asymmetries: Re-Examining the Firm-Level Impacts of Pro-Market Reforms in Latin America

Impacts of pro-market reforms on profitability have been investigated for more than two decades, but accumulated results still prove inconclusive. While there seems to be consensus highlighting why pro-market reforms would lead to higher profitability, findings remain mixed. We refine past research by 1) employing causal analysis methods (specifically, vector autoregression and impulse response functions) that improve upon previous techniques 2) using more appropriate sampling of countries and of firms (specifically, multiple countries that are comparable and that illustrate opposing directions of reforms), and 3) including additional key financial indicators as dependent variables to parse out the complex impacts of the reforms . Using firm-level data from 1,248 publicly listed firms from seven Latin American countries (2000-2016), our results offer novel insights. Interestingly, our results do not demonstrate a statistically significant result for the impact of pro-market reforms on profitability (return on sales). However, our findings do indicate a positive relationship between pro-market reforms and operational efficiency (reduction in administrative and selling expenses) as well as between pro-market reforms and financial leverage (corporate indebtedness and interest expenses). Understanding these asymmetric effects, while also considering pro-market reversals, offers a more finely variegated lens to extant literature.

Реализация сценарного подхода в бизнес-планировании нефтяной компании

The article considers the conceptual provisions of business planning on the example of oil industry companies as a modern effective tool for corporate financial management. In the conditions of high volatility and non-linearity of the macroeconomic environment of oil industry companies, a business plan allows you to determine the acceptable range of changes in key financial indicators for the coming years in order to quickly respond to the company's management and ensure planned strategic goals and strategies. On the example of the oil production business block, the main indicators that should be taken into account when drawing up a business plan are systematized, and a financial plan has been developed taking into account scenarios for changing macroeconomic parameters and deflators.

THE PROBLEM OF COMPARING FINANCIAL REPORTING INDICATORS IN INTERNATIONAL RATING SYSTEMS FOR ENTERPRISES

The article considers the problem of comparing financial indicators of international companies in the ratings formed by well-known analytical institutions. In practice, the methodology for evaluating and selecting data depends on market expectations and takes into account the requirements of the general public rather than industry professionals, so the question arises as for choosing the optimal system for evaluating the performance of multinational enterprises from different countries due to various managerial approaches, tax and accounting standards. The article aims to review the most common indicators and ratios used in international financial comparisons, and to prove (on the example of a global rating approach) that only the complex business analysis, even at a prior level, should be used for the reliable estimation of a company’s stability in the market. The study uses a database of key financial indicators of 2,000 companies included in the Forbes rating, such as sales, profit, asset and market value. Based on these indicators, the financial ratios were calculated and the characteristics of groups of enterprises were given by the methods of descriptive statistics. Net profit is emphasised as a key performance indicator, and it has been proven that the companies with the highest asset value do not have excessive financial ratios. The latest Forbes ranking covers companies from 61 countries, the leaders in headquartering the companies are the United States, China and Japan. It has been found that most companies have assets of up to $500 billion, while the market value of assets (calculated on the value of placed securities) is on average twice as low. The ranking also includes unprofitable enterprises (about 15% of the total), which indicates the lack of effective mechanisms for assessing the effectiveness of management of multinational enterprises and possible errors in investment decisions, as the focus is more on working capital and market coverage (sales) than the ability of management to develop strategic decisions. In the most stable companies, the ratio of net profit to sales does not exceed 20%, which proves the assumption of the advantage of moderate development and financial management. There is almost no correlation between profit/sales and asset value, while it is the strongest between asset value and market value of the company, and profit and market value. The companies with the largest assets have lower absolute and relative financial indicators than the average in the total sample of 2000 enterprises (with some exceptions). The practical significance of the article is the creation of a new sustainable international rating system of enterprises

A Twitter-Based Economic Policy Uncertainty Index: Expert Opinion and Financial Market Dynamics in an Emerging Market Economy

In this paper, we construct a Twitter-based high-frequency Economic Policy Uncertainty (TEPU) index built on a select set of Twitter user accounts whose tweets are considered to reflect expert opinion on the topic. We study the relationship between the TEPU index and a set of key financial indicators for tracking financial developments in Turkey over the sample period 2013–2021. Based on the results from a vector autoregressive analysis, we find evidence that changes in expert opinion described by fluctuations in the TEPU index interact with fluctuations in financial indicators such as the exchange rate and the stock market index to capture information about high frequency events during our sample period. Second, fluctuations in the TEPU index emerge as a key indicator that helps to predict the country risk premium measured by the CDS spread. We also find evidence that the conditional volatility of the different series reflects salient events that occurred over our sample period.

The concept and essence of financial reporting as the main source of information on the results of the enterprise’s business activities

Against the background of the development of economic relations in Russia, the requirements for the financial statements of the organization are currently increasing. The reporting information provides an overview of the financial position and results of the organization in order to improve the efficiency of business decisions. The directions of further development of the accounting and reporting system are disclosed in the concept of the development of accounting and reporting in the Russian Federation for the medium term. In many ways, the quality of accounting and reporting information is determined by principles that not only form the theoretical basis, but also provide practical guidance for action. Key financial indicators depend on their use; they serve as a basis for creating reliable information that is as clear as possible to a wide range of users.

Role of Social Capital and Financial Wellbeing in Reaching Successful Entrepreneurial Financial Performance: A Moderated-Mediated Model of Financial Intelligence.

Financial wellbeing is an emerging variable in business psychology that is expected to measure overall financial status and future financial trajectories. Financial intelligence and wellbeing have been key determining factors for the financial performance of entrepreneurs. The present study aimed to examine the crucial financial determinants (financial wellbeing and financial intelligence) and social capital factors for the entrepreneurial intentions and their financial performances among the 326 entrepreneurs in China. The study's findings showed that the key financial indicators and social capital are significantly related to entrepreneurial intentions, which considerably predict the entrepreneurial financial performance. The mediating relationships also reported that entrepreneurial intentions and financial intelligence significantly mediate the relationship among social capital, financial wellbeing, and entrepreneurial financial performance. The present study has highlighted the implications for potential entrepreneurs for improving their financial performance through sustainable social capital, financial wellbeing, and financial intelligence. This study will also help the strategists in screening the individuals registering as entrepreneurs based on their financial intelligence quotient. The present study enriches the literature by offering an integrated model on financial wellbeing and entrepreneurial financial performance.

Оценка привлекательности российских и западноевропейских зеленых облигаций

More and more companies in Western markets provide potential investors with an instrument to attract debt financing called “green bonds”. In recent years, a significant rise in demand for this type of securities is observed in Western stock markets; Russian investors also demonstrate interest in them, which makes issues of evaluating green bonds and comparing their investment attractiveness with the attractiveness of traditional bonds topical ones. The paper gives the assessment of attractiveness of green bonds both of Russian and Western European issuers and compares green and traditional corporate bonds from the point of view of a potential investor. The authors analyzed key financial performance indicators of green bonds: a coupon size, yield to maturity, and duration; assessed alternative costs of holding green bonds (bank deposit for the period of more than one year is considered an alternative variant of investment). Based on the results of the work, the authors conclude that, in general, non-green bonds today are more attractive for an investor; however, green bonds have an advantage in view of nominal coupon profitability. High duration is a distinctive feature of green bonds: the average due date of return of investments of green bonds is close to the maturity date, while traditional bonds have the duration much less than the term to their maturity. Therefore, one can note the heightened risks of inability to perform green bonds payments. In the Russian Federation, it is possible to partially eliminate specified risks through the government support of green projects.

The impact of IFRS convergence on key financial indicators of Public Sector Undertakings listed in NSE, India

The impact of IFRS convergence on key financial indicators of Public Sector Undertakings listed in NSE, India

The impact of IFRS convergence on key financial indicators of Public Sector Undertakings listed on NSE, India

The study investigates the impact of International Financial Reporting Standards convergence (IFRS) on the key financial ratios and balance sheet figures of public sector units listed in India (adopted IFRS first time in 2016-2017). The study used purposive sampling and selected 18 Public Sector Undertakings (PSUs) grouped under the first phase of mandatory adoption in 2016-2017. The study employed the paired T-test and Wilcoxon signed-rank test to test the significant median differences. The analysis is done in three parts; first, key ratios are compared to identify the significant difference between Indian (GAAP) and Indian (AS). Second, absolute figures from the financial statements were also compared, and lastly compared both outcomes to detect the differences. The findings revealed that a statistically significant impact of convergence to Ind AS is on Total Assets, Total Liabilities, and Tangibles. In contrast, in the case of all the other absolute figures like PAT, TCI, and, more importantly, Equity, the impact of convergence is not statistically significant. The originality of the paper lies in measuring the impact of mandatory adoption of Ind AS on PSUs in India.

FH&P RATING MODEL AND ITS APPLICATION WITHIN THE SLOVAK SPA ENTERPRISES

The aim of the paper is to propose a suitable structure of the newly designed Financial Health & Prediction (FH&P) rating model, and by putting it into practice in Slovak spa enterprises, to contribute to the development of financial management concepts for spa facilities operating in the field of tourism. The quantification of individual dimensions of the FH&P rating model was based on the calculation of selected ten key financial ratio indicators and prediction models. The values (in different units of measure) were converted to points using compiled transformation tables which formed the final score of the FH&P rating model and subsequently the proposed A-FX rating. Based on the results, Kúpele Bojnice, Inc. (SE03), Špecializovaný liečebný ústav Marína, s.e. (SE21) and Kúpele Nimnica, Inc. (SE07) received the best rating. This innovative model provides financial managers actual, simple and understandable overview of the financial health of a spa company and its future financial perspective. With a several adjustments, the FH&P rating model is easily applicable in any economic sector of Slovakia.

Examining the interaction of sustainable innovation activity and the life cycle of small high‐tech enterprises

AbstractThe direction of this study was engineered by the need to increase the innovation activity of high‐tech enterprises (primarily small enterprise) and to test the hypothesis that the innovation activity of such enterprises depends on the stage of their life cycle. At the first stage, we formulated the assumptions and prerequisites for the formation of a sample for the study: 106 small enterprises of the electric power industry of the Chelyabinsk region of Russia Federation. At the second stage, we developed a method to determine an enterprise's life cycle stage, taking into account the specifics of small industrial enterprises. Our method involves the sequential implementation of two steps. In the first, we use the traditional indicator of age of the enterprise, and in the second, we assess the degree of stability of key financial indicators of enterprise activities. At the third stage, based on the proposed method, the sample was divided into three groups: growing, mature, and long‐lived enterprises, for each of which an assessment of innovation activity was carried out. As a result, we determined that small Russian enterprises in the high‐tech industry demonstrate an increase in innovation activity at the stage of maturity, as a rule. However, even at this stage, only one in three enterprises shows such activity. This can be explained by the low demand for small businesses in the Russian national innovation system, as well as the lack of highly qualified personnel and the prevailing stereotypes of attitudes toward small businesses. As captured in the Sustainable Development Goals (SDGs) 9 (industry, innovation, and infrastructure), the proposed approach can be applied in the development of regional support programs and strategies for the development of small high‐tech enterprises.

FINANCIAL SECURITY OF THE ENTERPRISE: AN ALTERNATIVE APPROACH TO EVALUATION AND MANAGEMENT

Purpose – The main purpose of the article is to justify an alternative approach to assessing the level of financial security of the enterprises based on use the model of modified and adjusted financial statements. Research methodology – The following methods of general theoretical and empirical research were used in the writing of the article: abstract-logical (when systematizing scientific publications on the problems of financial security management of enterprises), comparisons and grouping (when developing and validating a model of modified financial statements), coefficient (when considering and using models for adjusting modified financial statements), grouping (when clustering enterprises depending on the results of the analysis), formalization (when developing a matrix for diagnosing the level of financial security of enterprises), generalization (when formulating research findings). Findings – Based on an established sample from nine of sunflower oil production enterprises of Ukraine their modified financial statements have been developed, it was adjusted to the consumer price index, key financial indicators of the model have been identified and the level of their financial security over the past 7 years have been assessed. The research identified a direct relationship between the level of financial security of enterprises and key financial indicators: financial stability, solvency and financial risk. Also, the proposed methodological approach can be not only an important tool for diagnosing the level of financial security of enterprises, but also its forecasting. Research limitations – The research limitation is associated with sampling size and geographical scope. Also, the diagnostic results may differ depending on the chosen adjustment base, determination of adjustment method and selection of inflation measurement method for the modification financial statements. Practical implications – Practical use of the proposed model proves that it is a convenient, simple, understandable and effective tool for diagnosing the financial security level of enterprises in terms of the main components: financial stability, solvency, and risk. The use of the proposed approach to the assessment of the financial security of the enterprise can serve as an indicator of the overall efficiency of its management at sunflower oil production enterprises and as an informative tool for factor analysis. Originality/Value – Consideration of a significantly different, alternative approach that allows enterprises to quickly and easily diagnose the level of their financial security; to manage it effectively during the current period, and can also become the basis for the formation of strategic directions of financial development and forecasting of the level of financial security for prospective period.

Practical aspects of forecasting the company’s financial performance

Financial planning and forecasting are important functions of financial managers, analysts and are important in making management decisions. Long-term growth and strengthening of the company’s position in the market are impossible without high-quality financial planning. Improving the quality of forecasting requires a thorough analysis of the application of various methods and techniques. The article considers the methodological problems of forecasting key financial indicators related to forecasting the final results of the company. The algorithm for creating refined factor predictive models of financial indicators has been presented and tested. Based on the combined application of various economic and mathematical methods, the forecasting method has been improved, which makes it possible to reduce the forecast error, which in turn allows us making more accurate financial decisions.

HR Analytics: Predicting and Enhancing Financial Performance through Human Resource Data

The aim of this research is to investigate the predictive capabilities of HR Analytics in enhancing organizational financial performance. Employing a comprehensive literature review, this study examines the correlation between various HR metrics and key financial indicators, such as revenue growth and profitability. Methodologically, longitudinal analysis of HR practices and financial performance data is conducted to assess the predictive power of HR Analytics. The findings reveal significant correlations between HR metrics such as employee engagement, talent management practices, and training investments, and organizational financial outcomes. Specifically, organizations with engaged workforces and effective talent management strategies exhibit higher levels of profitability and innovation. Strategic investments in employee development, as evidenced by training investments, yield tangible benefits in terms of productivity and financial performance over time. These results underscore the importance of leveraging HR data to inform strategic decision-making processes and optimize HR strategies to align with broader business objectives. Moving forward, organizations are encouraged to adopt a holistic approach to HR management, integrating HR practices with emerging technologies and fostering cross-functional collaboration to drive sustainable growth and competitiveness.

DIRECTIONS FOR STRENGTHENING THE FINANCIAL AND ECONOMIC SECURITY OF UKRAINE IN THE CONTEXT OF THE COVID-19 PANDEMIC

The financial and economic system of Ukraine is at the stage of formation and transformation into a relatively effective market-oriented model of economic development. However, given the financial and socio-economic crises of recent years, political instability and military conflicts in the east of the country, the level of financial and economic security of Ukraine is declining. Another factor influencing the level of financial and economic security of Ukraine is the spread of the global pandemic COVID-19. The urgency of the issue confirms the goal set in the article to improve the theoretical, scientific, methodological, and applied provisions for strengthening the financial and economic security of Ukraine in the context of the global pandemic COVID-19. To achieve this goal, the authors of the study considered the impact of the COVID-19 pandemic on global financial and economic development, in particular, analyzed key financial and economic indicators in the world, which revealed the volatility of stock indices and interest rates. The main negative changes in the level of unemployment in the world and real GDP under the influence of the COVID-19 pandemic was also analyzed and identified. The authors studied the world experience in combating the spread of the COVID-19 pandemic and developed a set of measures to improve the financial and economic security of Ukraine in the context of the COVID-19 pandemic. The priority is to preserve economic potential, social capital and create on their basis the preconditions for further economic growth. As the COVID-19 pandemic is one of the main problems of financial and economic security management in Ukraine, the authors identify a set of urgent crisis measures that can be implemented in the field of NBU policy, monetary policy, government structural policy, and public fiscal policy to support the economic growth of the country. It is emphasized that public authorities need to implement certain measures to accelerate innovation in the financial sector. Characterizing the prospects of strengthening the financial and economic security of Ukraine in the context of the COVID-19 pandemic, the main emphasis is on innovative areas of digitalization of the economy.

Financial Performance Analysis of Motilal Oswal Financial Services Ltd (MOFSL)

Purpose: Over the last two decades, globalization and technology advancements in financial markets have resulted in a surge of individual investors, granting them improved access to the financial markets. However, the large range of investment avenues available makes the investors’ decision-making process more complex. To make investors’ lives easier, a stockbroker functions as a liaison between the investor and the stock exchange, allowing them to make more precise investment decisions that are more advantageous for them. Motilal Oswal Financial Services Ltd (MOFSL) is the leading stockbroker firm that offers a wide range of financial services and is the popular choice among Indian investors. To attract new clients and retain the trust of existing customers, the firm needs to maintain a good financial track record. The investment advisor’s financial performance helps to a large measure in determining the firm’s overall financial health. This paper attempts to analyze the financial performance of Motilal Oswal Financial Services Ltd, for the past three fiscal years i.e., 2018-19, 2019-20, and 2020-21. Design/Methodology/Approach: The technique of ratio analysis has been adopted to assess the financial performance of MOFSL using secondary data. Also, the correlation between profitability and efficiency of MOFSL was examined using Pearson correlation. Moreover, SWOC analysis is performed to gain a better understanding of the company’s strategic position. Findings/Result: The interpretation of the ratios calculated, given a favorable impression of the financial status of the company and the tested hypothesis of correlation significance has discoursed that there is no significant correlation between profitability and efficiency of MOFSL. Further, the result of the SWOC investigation has offered new insights into the business. It can be concluded from the study that in the FY 2020-21, the company has outperformed in terms of profitability, liquidity, solvency, and efficiency ratios. Originality/Value: To acknowledge MOFSL’s growing popularity in the financial services industry, research was conducted in which the company’s financial performance was evaluated using four key financial indicators: profitability, liquidity, solvency, and efficiency ratios. Paper Type: A case study analysis based on empirical data.

Financial Performance Analysis of Motilal Oswal Financial Services Ltd (MOFSL)

Purpose: Over the last two decades, globalization and technology advancements in financial markets have resulted in a surge of individual investors, granting them improved access to the financial markets. However, the large range of investment avenues available makes the investors’ decision-making process more complex. To make investors’ lives easier, a stockbroker functions as a liaison between the investor and the stock exchange, allowing them to make more precise investment decisions that are more advantageous for them. Motilal Oswal Financial Services Ltd (MOFSL) is the leading stockbroker firm that offers a wide range of financial services and is the popular choice among Indian investors. To attract new clients and retain the trust of existing customers, the firm needs to maintain a good financial track record. The investment advisor’s financial performance helps to a large measure in determining the firm’s overall financial health. This paper attempts to analyze the financial performance of Motilal Oswal Financial Services Ltd, for the past three fiscal years i.e., 2018- 19, 2019-20, and 2020-21. Design/Methodology/Approach: The technique of ratio analysis has been adopted to assess the financial performance of MOFSL using secondary data. Also, the correlation between profitability and efficiency of MOFSL was examined using Pearson correlation. Moreover, SWOC analysis is performed to gain a better understanding of the company’s strategic position. Findings/Result: The interpretation of the ratios calculated, given a favorable impression of the financial status of the company and the tested hypothesis of correlation significance has discoursed that there is no significant correlation between profitability and efficiency of MOFSL. Further, the result of the SWOC investigation has offered new insights into the business. It can be concluded from the study that in the FY 2020-21, the company has outperformed in terms of profitability, liquidity, solvency, and efficiency ratios. Originality/Value: To acknowledge MOFSL’s growing popularity in the financial services industry, research was conducted in which the company’s financial performance was evaluated using four key financial indicators: profitability, liquidity, solvency, and efficiency ratios. Paper Type: A case study analysis based on empirical data.

Advancing the multifactor model of Stochastic Frontier Analysis

The concept of efficiency is important in economic science; at present, its role in every sector of the economy is growing. Evaluating an enterprise’s efficiency makes it possible to implement a correct and profitable strategy of resource allocation, which shows its potential level Given an annual increase in the number of bankrupt enterprises, the issue of estimating the efficiency of enterprises is relevant for both their owners and managers, as well as for creditors. There are various methods and models for estimating the performance of enterprises. This work has assessed the efficiency of enterprises in the industrial sector over the period of 2017‒2018. Stochastic Frontier Analysis is based on the stochastic model of production function. The classic SFA method is based on the production function of the company, which relates the volume of output to the volume of resources consumed. At the same time, the SFA model uses several inputs (volumes of resources consumed) and only one output parameter ‒ the volume of production. In order to achieve more precise results, a given model has been modified. The model allows several key financial indicators to be taken into consideration as outputs at the same time, based on which the financial activities of the studied economic entities are assessed. The result of the work involving open sources has revealed how the efficiency of different enterprises in the same industry changes over several years. It is shown that the modified Stochastic Frontier Analysis model could be used to assess financial stability and predict bankruptcy.

Key Financial Indicators by the Size of the Construction Company - Czech Study

Abstract Statistical data on the values of financial indicators in individual fields in the Czech Republic are provided by the Ministry of Industry and Trade. Updated values are issued quarterly. However, within the statistical samples, there are on average 34 companies focusing on construction. Moreover, no document specifies the size of the companies. Although the scientific literature provides basic financial rules, this research has confirmed that companies of different sizes show different values of financial indicators. For this reason, one of the aims of the research described in the article was to verify the hypothesis that companies of different sizes have different approaches to financial management and the other aims was to focus on correlating data on key financial indicators of individual sizes of companies with statistics provided by the Ministry of Industry and Trade. Basic methods of financial analysis (vertical analysis), selected ratios and basic statistical methods, which include correlation analysis, were used. The analysis was performed on 30 samples of construction companies, which were divided by size into small, medium and large. The outputs of the research will be further used for the follow-up research.

Red flags in financial reporting - empirical studies in the AeRO market

Abstract Understanding the factors that cause fraud and properly defining key areas of conduct is one of the most effective ways to detect potential irregularities, where the auditor’s professional judgment and skepticism are essential. In this respect, it is necessary to study some key financial indicators, but also to use various procedures to identify and detect fraud and possible manipulation in the financial reporting process. The objectives are aimed at identifying and highlighting possible red flags in companies whose shares are traded on the Bucharest Stock Exchange. The sample considered sensitive to fraudulent financial reporting is composed of four distinct categories of companies, namely: companies recently admitted to trading on the AeRO market administered by the Bucharest Stock Exchange (21), companies that obtained a zero Vektor score in 2020 (9), companies that obtained a low score in the White Letter publication (5), and companies in insolvency (4).