Long-term Obligations Research Articles

Impact of Debt Composition and Accounting Conservatism on Financial Distress in Emerging Markets

Aims: This study investigates the impact of debt composition, specifically short-term and long-term debt, on corporate financial distress, focusing on the moderating role of accounting conservatism. It aims to understand how firms in emerging markets, particularly Kenya, can achieve financial stability through prudent debt structuring and conservative accounting practices. Study Design: The research adopted an explanatory research design. Place and Duration of Study: The study utilized financial data from firms listed on the Kenyan Securities Exchange between 2008 and 2021. Methodology: The study analyzed a sample of 45 firms trading at the Nairobi Stock Exchange over 14 years from 2008 to 2021. The study used panel logistic regression, a statistical method for analyzing data with multiple observations over time, to test its hypotheses. Results: The results show that both short-term and long-term debt increase the likelihood of financial distress, with accounting conservatism further intensifying the risk for firms heavily reliant on short-term debt while mitigating it for those with long-term debt. This suggests that conservative accounting practices, which promote early recognition of losses, may exacerbate financial distress for firms heavily reliant on short-term debt. In contrast, for long-term debt, accounting conservatism has a mitigating effect helping firms manage their debt obligations more effectively over time. This highlights a nuanced role of accounting conservatism, where it increases the pressure on firms with short-term debt while providing stability for those with long-term obligations. Conclusion: The findings suggest that corporate managers in emerging markets should carefully balance short- and long-term debt to minimize financial distress risks. Additionally, adopting conservative accounting practices can serve as a safeguard, providing early warning signals for financial trouble and enhancing corporate stability. Managers should therefore carefully balance short-term and long-term debt to reduce financial distress while adopting conservative accounting practices to enhance financial transparency and risk management. Policymakers can support firms by promoting responsible debt management and offering incentives for conservative financial reporting to strengthen overall financial stability.

Management Mechanisms of Rehabilitation Hospitals in Bulgaria. Short Communication

In a market economy and financial crisis, the head of any medical institution has to make adequate decisions regarding the cost-effective functioning of the hospital. Along with reducing costs, the main task is to maintain a high level of medical care. In this paper, the economic efficiency of medical activities in three specialized hospitals for rehabilitation (previously called sanatoriums) in the cities of Hisar, Varna and Bankia in Bulgaria was studied. The competitiveness of the presented rehabilitation institutions lies in their ability to design, produce and offer rehabilitation services that are more attractive to patients in terms of price and quality characteristics and more fully meet their needs compared to the rehabilitation services of competitors. Based on the analysis, it was found that in rehabilitation hospitals, through long-term obligations, the purchase of short-term assets necessary for the implementation of activities is financed, and operating income is invested in long-term assets. This fact determines the increase in liabilities to the company by further minimizing free cash flows, which involve financing current activities, but are invested in non-current assets. At the same time, rehabilitation hospitals — budgetary organizations strictly comply with capital expenditures, which must be specified in the appropriate paragraph, with an approved budget according to the appropriate indicator, which proves strict compliance with budgetary discipline and control over the flow of funds.

A Financial Analysis and Valuation of Home Depot

This study aims to research and analyze the firm’s valuation of Home Depot by exploring the company’s background and recent events, evaluating company performance, forecasting future development, and discovering the firm’s strategy and risk. The performance evaluation uses liquidity, solvency, and profitability to assess the firm operations and use of resources. The additional valuation adopts current and next year’s forecast financial data to measure the company’s EPS and revenue growth rate, P/E, PEG, and GP/A ratios. The results show that Home Depot has high liquidity, high profitability, and low solvency from its operational performance, as well as a high long-term valuation forecast in the home improvement retail industry. This consequence implies that Home Depot may have efficient business management and sound financial health by effectively meeting short-term obligations and using assets to generate revenue. Meanwhile, the company may also pose several risks, including an unstable economic environment, difficulty meeting long-term obligations, the continued decline in annual gross margins and ROIC, and potential stock overvaluation for investors.

Analisis Kinerja Perusahaan Berdasarkan Rasio Keuangan Pada Laporan Keuangan PT Gozco Plantations Tbk Periode 2020-2022

This study aims to analyze the financial performance of PT Gozco Plantations Tbk for the period 2020-2022. This analysis uses the financial ratio method to evaluate a company's performance, which covers the ratio of liquidity, solvency, and profitability. The information used comes from the annual reports published by the company. The research results showed that PT Gozco Plantations Tbk experienced performance changes during the period. In 2020, the company's profitability experienced a significant decline due to the impact of the COVID-19 pandemic, but by 2021 and 2022, most economic indicators have improved. A stable ratio of liquidity and solvency shows the company's ability to meet its short- and long-term obligations. This research provides an overview of the factors that influence financial performance and its impact on stakeholders of PT Gozco Plantations Tbk.

Penilaian Tingkat Kesehatan Keuangan Berdasarkan Rasio Likuiditas, Solvabilitas, dan Profitabilitas Pada PT. Wilmar Cahaya Indonesia

The aim of this research is to assess the financial condition of PT. Wilmar Cahaya Indonesia in the 2019-2023 period based on liquidity, solvency and profitability ratios. The methodology used is quantitative descriptive analysis using secondary data from the company's financial reports. The research results show that although the company's liquidity is said to be liquid, a turnover ratio of more than 500% is considered too high. This indicates inadequate capital utilization. The solvency ratio shows a company's healthy financial position, identifying the company as being able to fulfill its long-term obligations. However, the profitability ratio shows poor financial health with the ratio far below standard, tends to decline, and has low ROA and ROE values. The company's inability to use resources efficiently to generate profits is the cause of this decline. Overall, even though PT Wilmar Cahaya Indonesia is liquid and solvable, its financial health for the 2019-2023 period still needs to be improved, especially in terms of profitability. The analysis shows that to increase profitability, companies must improve the effectiveness of current asset management and maximize resource utilization. This study provides an overview of the company's financial situation and can be used as a reference for future management.

DETERMINANTS OF CAPITAL STRUCTURE IN INDONESIAN COMPANIES FROM 2011 – 2022

<p>The purpose of this study is to examine the variables influencing capital structure in Indonesian businesses. The dependent factors in this case are the debt to asset ratio (DAR) and the debt-to-equity ratio (DER), while the independent variables are profitability, growth potential, size, dividend policy, liquidity, and business risk. All industries in Indonesia are represented in the research sample, except for the banking industry. The panel regression analytical method is used. Furthermore, Random Forest's variable importance analysis is used in this work. The outcome demonstrated that dividends, tangibility, profitability, and liquidity are important components of both DAR and DER models. Strong tangible assets raise both DAR and DER, but favorable profitability and liquidity typically lower them. Additionally, businesses that pay out larger dividends typically have smaller debt loads. Therefore, businesses should concentrate on sustaining strong profitability as it is closely related to sales. To guarantee continuous liquidity, which enables businesses to fulfill both short- and long-term obligations, care must be taken while paying out dividends.</p>

Effect of Firm Size and Profitability on Long Term Debt of Firms Listed at the Nairobi Securities Exchange, Kenya

Organization expenses result from a company’s utilization of long-term debt in its capital structure. One can also characterize a firm’s size by looking at its assets. In order for a company to draw in investors, its worth increases with its size. The profitability of a business may be enhanced by including long-term obligations in its structure of capital since the interest paid on such debts is deduction for taxes. Therefore, this study aimed at examining the effect of firm size and profitability on long term debt of listed firms at the Nairobi Securities Exchange. The study was based on trade off theory and pecking order theory. Secondary data was obtained from the firms from 2007-2011. Panel data was used to analyze data observations. The result indicates that firm size had insignificant effect on long term debt of firms. Profitability had significant effect long term debt. The study recommends that larger firms should leverage their greater access to capital markets to secure long term debts financing at favorable terms, balancing the benefits of debt against potential risks. Firms also with high profitability should encourage internal financing sources to reduce reliance on external debt and minimize financial cost.

SOLVABILITY RATIO ANALYSIS TO ASSESS THE FINANCIAL PERFORMANCE OF PT KARYA TANTRI ABADI

The aim of this research is to use the solvency ratio to test the financial performance of PT Karya Tantri Abadi. Descriptive research using a qualitative approach is the type of research used in this research. Based on research results, the financial performance of PT Karya Tantri Abadi during the period 2020 to 2022 illustrates extraordinary achievements in terms of profitability, efficient use of assets and debt management. The research results show that PT Karya Tantri Abadi has a fairly good level of solvency with relatively low DAR and DER values compared to industry standards. The company shows a tendency to increase the use of debt in its operations in 2021, but has taken steps to reduce its debt or increase its equity in 2022. In conclusion, PT Karya Tantri Abadi has good solvency and is able to meet its long-term obligations. However, companies need to continue to monitor and manage their debt carefully to maintain optimal levels of solvency.

ANALISIS KINERJA KEUANGAN DENGAN RASIO LIKUIDITAS, RASIO SOLVABILITAS, RASIO AKTIVITAS, RASIO PROFITABILITAS DAN RASIO PASAR PT. ASTRA INTERNASIONAL Tbk PERIODE 2017-2021

In analyzing the financial reports at PT Astra International, Tbk. using descriptive analysis methods and data collection techniques using library research. Based on data from the financial position report and profit and loss report, changes in capital and balance sheet at PT. Astra International, Tbk from 2017 to 2021, shows that the financial condition of this company is generally very good. The level of activity of this company is very good in managing its trade receivables. The level of solvency of this company in the first year is not able to manage its long-term obligations. The level of profitability. This company is very good, it can be seen from the company's ability to generate net profit and the level of market value ratio. This company can be seen very well from the company's ability to increase the value of its share price.

СПОСОБИ І ПРИЙОМИ БАЛАНСУВАННЯ ФОРМУВАННЯ ТА ПРИРОЩЕННЯ ФІНАНСОВОГО ПОТЕНЦІАЛУ В БУДІВЕЛЬНИХ ОРГАНІЗАЦІЯХ

The functioning of the financial potential of construction organizations is accompanied by complex processes of its formation and growth, which become possible only with an optimal structure of financial resources and associated capabilities of the economic entity to meet its short-term and long-term obligations (formed within the framework of future and current liquidity and solvency) and achieve an acceptable level of profit for each hryvnia of invested equity (formed within the framework of the profitability of equity). Therefore, the purpose of the article is to identify methods and techniques for balancing the process of forming and increasing the financial potential in construction organizations. The study highlights the fact that the systematic approach to managing the financial potential of construction organizations focuses on achieving its high level, which entails establishing the right balance between financial resources, created opportunities, and factors involved. It is argued that the format of the balance is determined by various approaches to management implementation, including: goal-oriented approach; process approach; systemic approach; situational approach; structural approach; functional approach; market approach; production approach; value-based approach. It is noted that it is important to choose approaches to financial potential management that allow for the implementation of the principles of modern effective management. The study of the characteristics of balancing the formation and growth of financial potential has led to the observation that these processes require an optimal structure of financial resources and associated capabilities of construction organizations to meet their obligations and ensure an acceptable level of profit. It has been demonstrated that it is important to establish a set of interconnected methods and techniques for balancing the formation and growth of financial potential, taking into account the differences arising from the variety of approaches to implementing the concept of effective management. The prospects for further research lie in identifying specific areas and rules for balancing components that direct and ensure the proper flow of processes in forming and increasing financial potential.

ANALISIS KINERJA KEUANGAN PADA PERUSAHAAN PROPERTI DAN REAL ESTATE PERIODE 2017-2021

The purpose of this study is to determine the financial performance of PT. Plaza Indonesia Realty Tbk, PT. Roda Vivatex Tbk, and PT Urban Jakarta Propertindo Tbk from 2017 to 2021 using liquidity, solvency, activity and profitability ratios. This study uses secondary data obtained from the company's annual financial reports at IDN financials and on the company's website itself. This study uses a quantitative descriptive method. The results of this study indicate that the company's liquidity when viewed from the current ratio and quick ratio is running quite well, but the cash ratio is not running well, which means the company is less current in its short-term obligations. Then in terms of company solvency, seen from the Debt Asset to Ratio, all companies are in a fairly good category and the Debt to Equity Ratio is only PT Plaza Indonesia Realty Tbk, which is not good, this shows that the company is increasingly finding it difficult to pay long-term obligations. Then, in the company's activities, it can be seen from the inventory turnover of PT Urban Jakarta Propertindo, which is not going well and the asset turnover ratio of the three companies is also not doing well, which means that the company gets less income per dollar of assets. While seen from the profitability using the net profit margin ratio only PT. Urban Jakarta Propertindo Tbk which is above the industry standard so that it shows the company is running quite well in terms of net profit after tax so that the company is able to reduce its operational costs in certain periods while the Return on Assets and Return on Equity ratios of the three companies are below standard industry so that it shows the size of a company is not good for the profitability of the company itself which shows the effectiveness of management in using assets to earn income every year.

Analysis of The Financial Performance of PT. Adhi Karya (Persero) Tbk Listed on The Indonesia Stock Exchange

The purpose of this study is to measure the company's financial performance based on the financial statements of a company using analysis of liquidity, solvency, and profitability ratios. The report used is every account in the balance sheet and income statement. The financial statements discussed are the financial statements of PT Adhi Karya (Persero) Tbk for the 2019-2020 period. The results of this study show that PT Adhi Karya (Persero) Tbk for the 2019-2020 period has poor financial performance. This is due to the company's lack of ability to meet short-term obligations and long-term obligations as well as the company's lack of ability to earn profits for 1 (four) period from 2019-2020. With this, the company is expected to be able to increase profits and be able to streamline the costs incurred in the company

The Interplay between U.S. Economic Indicators and Insurance Firm Financial Health

This study examined the relationship between U.S. economic indicators and the financial health of insurance firms over a decade, from 2010 to 2020. Utilizing a quantitative research approach, data was collected from top insurance companies, juxtaposed against macroeconomic indicators like GDP growth, inflation rate, interest rate, and unemployment rate. Through regression analysis, the study revealed significant correlations between these macroeconomic variables and insurance firms' profitability, solvency, and liquidity metrics. The results indicated that GDP growth was positively correlated with insurance firms' profitability, suggesting that in periods of economic expansion, insurance firms tend to be more profitable. In contrast, inflation rate showed a negative relationship with solvency ratios, pointing to the strain of rising costs on the firms' ability to meet long-term obligations. Interest rates were found to significantly affect the liquidity of insurance firms, where higher rates led to decreased liquidity, likely due to increased costs of borrowing and alterations in the value of rate-sensitive assets and liabilities. Lastly, unemployment rates were negatively correlated with insurance firms' premium collections, implying lower policy underwriting during times of higher joblessness. Moreover, while the interrelationships were evident, the degree of sensitivity varied across firms, with larger insurance providers appearing to be more resilient to macroeconomic fluctuations than their smaller counterparts. The study concluded that while insurance companies are inherently influenced by broader economic trends, the extent of their vulnerability or resilience is also determined by firm-specific factors like size, asset management strategies, and product diversification. The findings underscore the need for proactive management strategies for insurance firms in navigating the ever-shifting economic landscape. Keywords: U.S. Economic Indicators, Insurance Firm Profitability, Macroeconomic Fluctuations, Financial Health, Solvency Ratios

COVID-19: How did the pandemic impacted the economic-financial results of the healthcare companies included in B3?

This study aims to verify the influence of the pandemic on the economic and financial results of the companies included in the health sub-sectors of B3. The sample consisted of 22 companies with data treated by test Wilcoxon and panel regression. The results indicate that the firms were able to meet their short- and long-term obligations. The medical services subsector (hospitals, analysis, and diagnostics) showing the worst results with significant increase in third-party capital and a reduction in net margin and profitability. This study expands on the scarce literature on the health sector, which is critical to the well-being and economy of Brazilians and evidence to stakeholders that economic-financial results differs between subsectors.

ДЕРЖАВНО-ПРИВАТНЕ ПАРТНЕРСТВО ЯК СТРАТЕГІЧНИЙ ІНСТРУМЕНТ РОЗВИТКУ ТРАНСПОРТНОГО КОМПЛЕКСУ УКРАЇНИ

In this work there the objective prerequisites for the development of PPP in the transport complex of Ukraine are systematized, its strategic importance for the national economy, the integration of transport and infrastructure components, the extensiveness of the transport network, the scale of implemented investment projects, significant amounts of budget and corporate financing, the need for close cooperation between the state and private partners in part of tariff regulation, compliance with security issues, etc. The requirements for ensuring the transparency of the implementation of PPP projects, in particular by maintaining the Register of long-term obligations within the framework of the PPP, as well as for the financing of projects in the transport complex at the expense of special funds as part of the State Budget of Ukraine, have been determined, and the sources of their formation and use have been determined. The strategic goal of the PPP as a tool for the development of the transport complex of Ukraine based on the institutionalization of forms of investment activity in the form of concession agreements, life cycle contracts, and the creation of joint ventures is substantiated. Proposals for the implementation of PPP projects in certain sectors of the transport complex have been developed. It is shown that concession contracts were the most widespread in it, and the experience of their implementation in the field of highway construction and operation, as well as in port operations, is summarized. It is proposed to extend the experience gained to the concession of airports, railway stations and stations, individual sections of the railway track. The organizational and methodological support for the development of PPP projects in the transport complex has been assessed. Obligations of state partners with regard to annual reporting on the implementation of contracts are defined. A matrix of SWOT analysis of the implementation of PPP projects in the transport complex of Ukraine was built. It was concluded that the strengths and opportunities outweigh the weaknesses and threats provided that martial law ends, the investment climate improves, foreign investors attract funds, administrative barriers are simplified, corruption risks are reduced, and property rights are strengthened.

Analysis of Financial Statements in Assessing Company Financial Performance in the Automotive Sector Registered on the IDX (PT. Astra Internasional Tbk)

The purpose of this study was to determine the financial performance of one of the companies in the automotive sector, namely PT. Astra International Tbk. The company's financial performance was analyzed using the ratio quantitative method on secondary data from the 2017 to 2021 annual financial statements. The ratio analysis used included profitability ratios, liquidity ratios, solvency ratios and activity ratios. The results of the ratio analysis of the financial statements of PT. Astra International Tbk in 2017-2021 shows that the company's financial performance in profitability, liquidity and activity has not reached the industry standard ratio for the last 5 (five) years due to a decline in sales figures, further strategies are needed in an effort to increase sales figures. Solvency of PT. Astra International Tbk is considered good because the ratio is greater than the industry standard ratio. The financial performance in fulfilling the company's long-term obligations was carried out well.

Liquidity and Solvency PT Electronic City Indonesia Tbk for the Period of 2016-2019

This study aims to determine the company's financial performance in fulfilling short-term and long-term obligations of the company PT Electronic City Indonesia Tbk. The analytical technique used in this research is quantitative analysis. The data used in this study is in the form of the financial statements of the company PT Electronic City Indonesia Tbk for the period 2016-2019 which is measured using the liquidity ratio and solvency ratio. The results of the analysis on the level of liquidity in terms of the Current Ratio, the ratio is above the industry standard so the company is in good condition. Judging from Quick Ratio, the ratio has increased from below the industry standard to above the industry standard. Judging from the Cash Ratio, the ratio numbers have increased and decreased, so that at a certain period the company was in a bad condition, namely in 2018 the cash owned by the company decreased. Judging from the cash turnover ratio, the ratio is below the industry standard, so the company's financial performance is in good condition because the smaller the ratio, the better for the company. in terms of Inventory to Net Working, the ratio is above the industry standard, although it decreases every period. The results of the analysis on the level of solvency in terms of the Dept. To Equity Ratio, the ratio is below the industry standard, which indicates that the condition of the company is in good condition, because the smaller the ratio, the better for the company. Judging from the Dept. To Asset Ratio, the ratio is below the industry standard, which means the company is in good condition. Judging from Long Term to Equity Ratio, the ratio is below the industry standard, which means the company is in good condition. Judging from the Tangible Assets Debt Coverage, it shows that the company's condition is in good condition because the total long-term debt can be repaid with intangible fixed assets owned by the company, based on the results of effective solvency, the company's financial performance can be said to be good.

The effect of the independent board of commissioners and motivation on financial distress

Financial distress is carried out before real bankruptcy occurs in an industry. Problems in the finances of an industry are often faced because there are irregularities in it, the company does not have the ability to pay its long-term obligations to the total assets it has, while the margin obtained is not in line with the amount of assets that have been issued. The purpose of this study was to analyze the factors that influence financial distress with independent commissioners and motivation as the independent variables. The population used is the transportation company on the IDX (Indonesian Stock Exchange) for the 2019-2020 period with the purposive sampling method. The analysis technique used multiple linear regression using SPSS 25. The results obtained: motivation has a positive and significant effect on the financial distress variable and the independent board of commissioners has no significant effect on the financial distress variable. This study provides input to enrich the theory of the relationship between the Board of Independent Commissioners and Motivation towards Financial Distress.

ANALYSIS OF LIQUIDITY AND SOLVENCY RATIOS ON THE BALANCE SHEET OF THE REGIONAL GOVERNMENT OF TEMANGGUNG IN 2014-2015


 The purpose of this study is to determine the ratio of liquidity and solvency on the balance sheet of the Temanggung Regional Government. The object of research used is the balance sheet of the Temanggung Regional Government for the period of 2014-2015. The method used is descriptive qualitative method. The results of this study indicate that the Temanggung district government has sufficient assets to pay off its debts and can pay debts quickly and with a high level of liquidity. Hence, it can be concluded that the Temanggung district government has financial adequacy to carry out government operational activities, and able to fulfill all its obligations, both short-term and long-term obligations, as well as the Temanggung district government has the opportunity to attract investors and creditors to channel their funds for the development of the Temanggung government.

Economic Policy Uncertainty, National Culture, and Corporate Debt Financing

Financial innovation vis-à-vis economic policy uncertainty (EPU) without due regards being given to debt financing. This paper fills this gap and unveils the dynamic role of national culture in defining debt financing via EPU. We use a sample of 3831 non-financial firms of Asian economies and employ the System Generalized Method of Moments to estimate the regression coefficients. Our findings reveal an inverse relationship between the EPU and debt financing, which suggests that debt finance mitigation strategies are successfully executed in the region. The potential reasons for this include the policies by businesses to reduce business activities and avoid the unfavorable rising financing cost through EPU. On the supply side, the rising EPU induces the banks to accelerate their interest rate due to increased default risk. Similarly, we observe that high uncertainty avoidance (UND) has a negative and significant link with debt financing due to an unpleasant behavior of corporate managers towards debt when they have an alternate source of financing instruments instead of accepting long-term obligations. However, we find that the UND and EPU interaction has a significantly positive impact on debt financing due to the rigid behavior of managers, which forces them to consider cultural traits and converts their risk-averse attitude into risk-friendly behavior. This implies that corporate managers should reflect the sensitivity of the national culture while considering debt financing.