Operating Margin Ratio Research Articles

Impact of the COVID-19 pandemic on the financial performance of hospitals according to hospital characteristics in Korea: An observational study.

The coronavirus disease-19 (COVID-19) pandemic had a profound effect on society and various industries. Moreover, hospitals experienced huge financial losses owing to COVID-19 prevention efforts. This study aims not only to comprehensively inspect the financial impact of the pandemic on Korean hospitals but also to consider financial performance by hospital characteristics. Data were collected from 255 general hospitals that uploaded their income statements on the website, and 1530 data points were collected from 2016 to 2021. We used the paired t-test, linear mixed-effects (LME) model in R software (Ver. 4.3.2). We then selected operating margin ratio (OMR) and total margin ratio (TMR) to measure financial performance and used location, type of hospital, and ownership as hospital characteristics. We found that OMR and TMR worsened after COVID-19 breakout, and the labor and management cost ratios increased. According to the LME model with hospital characteristics, the OMR of hospitals located in the capital area worsened more than that of hospitals in noncapital areas (β5 = -6.3, P < .01). Regarding type of hospitals, tertiary general hospitals maintained a surplus and recorded a better OMR than general hospitals during the pandemic (β6 = 9.5, P < .01). The OMR of public hospitals worsened more than that of private hospitals during the pandemic (β7 = -25.4, P < .01), but the TMR of public hospitals increased compared to that of private hospitals (β7 = 3.9, P < .01). We confirmed that the COVID-19 pandemic had a negative impact on the financial status of hospitals. Considering hospital characteristics, the impact of the pandemic on hospital financial performance differed based on location, type of hospital, and ownership. As the contributions of this study, the government could establish support policies such as government subsidies based on hospital characteristics and hospital administrators could set a contingency plan to mitigate national disasters.

Advancing financial analytics: Integrating XGBoost, LSTM, and Random Forest Algorithms for precision forecasting of corporate financial distress

This study thoroughly examined the use of different machine learning models to predict financial distress in Indonesian companies by utilizing the Financial Ratio dataset collected from the Indonesia Stock Exchange (IDX), which includes financial indicators from various companies across multiple industries spanning a decade. By partitioning the data into training and test sets and utilizing SMOTE and RUS approaches, the issue of class imbalances was effectively managed, guaranteeing the dependability and impartiality of the model’s training and assessment. Creating first models was crucial in establishing a benchmark for performance measurements. Various models, including Decision Trees, XGBoost, Random Forest, LSTM, and Support Vector Machine (SVM) were assessed. The ensemble models, including XGBoost and Random Forest, showed better performance when combined with SMOTE. The findings of this research validate the efficacy of ensemble methods in forecasting financial distress. Specifically, the XGBClassifier and Random Forest Classifier demonstrate dependable and resilient performance. The feature importance analysis revealed the significance of financial indicators. Interest_coverage and operating_margin, for instance, were crucial for the predictive capabilities of the models. Both companies and regulators can utilize the findings of this investigation. To forecast financial distress, the XGB classifier and the Random Forest classifier could be employed. In addition, it is important for them to take into account the interest coverage ratio and operating margin ratio, as these finansial ratios play a critical role in assessing their performance. The findings of this research confirm the effectiveness of ensemble methods in financial distress prediction. The XGBClassifier and RandomForestClassifier demonstrate reliable and robust performance. Feature importance analysis highlights the significance of financial indicators, such as interest coverage ratio and operating margin ratio, which are crucial to the predictive ability of the models. These findings can be utilized by companies and regulators to predict financial distress.

Performance analysis of hospitals before and during the COVID-19 in Iran: A cross-sectional study.

The COVID-19 pandemic placed considerable pressure on the health care systems and caused many disruptions to the care hospital system around the globe. This study aimed to analyze the performance of hospitals affiliated with the University of Medical Sciences and Health Services of South Khorasan Province before and during COVID-19. This cross-sectional study tracked the financial performance (FP) and service performance (SP) of 12 hospitals affiliated with South Khorasan University of Medical Sciences and Health Services using the Farabar system and Hospital Information System (HIS). Our study covered two time periods: from February 2018 to February 2020 (pre-COVID-19) and from February 2020 to February 2021 (during COVID-19). SP analysis of hospitals was performed by examining the trend of monthly changes before and during the COVID-19 pandemic and analyzed using SPSS software version 22 and Paired Sample T-Test. FP of hospitals was analyzed through relevant ratios and analyzed using Microsoft Office Excel. Most SP indicators decreased considerably in all hospitals during COVID-19. FP ratios (e.g., activity and leverage ratios) increased during either or both pre-COVID or COVID periods. Compared to before COVID-19, the operating margin ratio and operating expenses coverage from operating income increased from -0.50 and 66.55 to -1.42 and 41.32, respectively, during COVID-19. Moreover, the net profit margin ratio and Return On Assets (ROA) ratio were increased during COVID-19. COVID-19 has decreased the FP and SP of hospitals due to limitations in providing services to patients since the beginning of COVID-19. Measures such as providing various financing resources and improving the financial resilience of hospitals are essential. Funds should be disbursed to offset hospitals' losses due to reduced elective and outpatient revenue. Policymakers should come up with holistic policies to tackle the adverse impact of such crises in the future, support hospitals financially, and consider allocating additional funding to them during emergencies.

Determination of shareholders’ welfare with financing quality as a moderating variable

The purpose of this study was to analyze the factors that might affect the shareholder welfare ratio (ROE). These factors include independent variables consisting of financing distribution ratio (FDR), low-cost funds ratio (CASA), net operating margin ratio (NOM), expense-based income ratio (FIR), and Financing Quality ratio (NPF). Furthermore, to determine the relationship of Islamic bank performance indicators on shareholder welfare with the ROE ratio indicator, NPF is a moderate variable. The method used to analyze the holder's welfare ratio (ROE) is moderate regression analysis with the error error model (ECM). The research sample used is the entire research population, namely monthly data from the Islamic banking industry for the period 2012-2020 (consisting of 14 Islamic commercial banks and 20 Islamic business units). The results of this study note that in the long run: FDR has a positive and significant effect on the ROE ratio, the NOM ratio has a negative and significant effect on the ROE ratio. While the variables of CASA ratio, FIR ratio and NPF have no effect on the ROE ratio. Furthermore, the NPF Moderating Variable strengthens the relationship of all direct and significant variables with the Shareholder Welfare Ratio (ROE), namely NPF moderates the negative and significant effect of FDR on the ROE ratio, NPF moderates the positive and significant effect of the ratio. on the ROE ratio. Furthermore, other variables NPF Moderating Casa and FIR have no effect on the ROE ratio. For the short term: FIR has a positive and significant effect on the ROE ratio, the NOM ratio has a negative and significant effect on the ROE ratio. While the FDR ratio, CASA ratio and NPF ratio variables have no effect on the ROE ratio. Furthermore, the NPF variable strengthens the relationship of all variables directly and significantly to the Shareholder Welfare Ratio (ROE), namely NPF moderates the negative and significant effect of FIR on the roe ratio, NPF moderates the positive and significant effect of the ratio. on the ROE ratio. While other variables, moderate NPF, FDR and CASA, have no effect on the ROE ratio. The implication of this study is to measure the welfare of shareholders, in this case the performance of Islamic banks with the ROE ratio approach. Why is the welfare ratio of all shareholders (ROE) important, because in accordance with the existence of Islamic banks it aims to provide benefits (maslahah) for the ummah. Islamic banks in carrying out their mandate have a commitment to be able to provide expectations from shareholders in the company and be able to develop products that are in accordance with the wishes and needs of customers. So from this study it can be said that of the 5 variables that affect the price. financing distribution ratio (FDR), low cost funds ratio (CASA), net operating margin ratio (NOM), cost-based income ratio (FIR) and Financing Quality ratio (NPF).

The Influence of Liquidity and Solvency on Performance within the Healthcare Industry: Evidence from Publicly Listed Companies

Any lucrative economic activity implies aiming at obtaining a profit, including companies in the healthcare industry. The present study analyzes the extent to which financial liquidity and financial solvency influenced the performance of 34 healthcare companies that are publicly traded on the New York Stock Exchange. The period of analysis spanned from Q4 2005 to Q4 2020. The research methodology favored a complex approach by running econometric models with two-stage least squares (2SLS) panel and panel generalized method of moments (GMM). Empirical evidence showed that the financial indicators current liquidity ratio, quick liquidity ratio, and debt to equity ratio significantly influenced company performance measured by return on assets, gross margin ratio, operating margin ratio, earnings before interest, tax, depreciation, and amortization. Strategies intended to improve business performance based on liquidity and solvency insights are also addressed.

Karakteristik Auditee Sebagai Penentu Opini Audit Pada Perusahaan Manufaktur Yang Terdaftar Di Bursa Efek Indonesia Tahun 2016-2017

Abstract— Research objectives are to determine the effect of operating margin ratio to total assets on qualified audit opinions. Secondly, To determine the effect of net profit to sales on qualified audit opinions. Thirth, to determine the effect of current asset to current liabilities on qualified audit opinions. And fourth, to determine the effect of operating margin to total assets, net profit to sales and current asset to current liabilities simultaneously to qualified audit opinions. The research population is manufacturing companies listed on the Indonesia Stock Exchange in 2016 – 2017. This type of research is quantitative research. Data collection techniques use documentation. The analysis technique uses linear regression, t test and F test. The results in this study indicate, there is a positive and significant influence between operating margin to total assets and qualified audit reports on Manufacturing Companies listed on the Indonesia Stock Exchange. Scondly, there is a positive and significant influence between net profit and qualified audit reports on Manufacturing Companies Listed on the Indonesia Stock Exchange. Thirth, there is a positive and significant influence between current asset to current liabilities and qualified audit reports on Manufacturing Companies Listed on the Indonesia Stock Exchange. Fourth, there is a simultaneous effect of operating margin to total assets, net profit and current asset to current liabilities against qualified audit reports on Manufacturing Companies listed on the Indonesia Stock Exchange. Keywords—: operating margin to total assets; net profit; current asset to current liabilities; and qualified audit report.

Performance of Kotak Mahindra Bank after Merger

The paper is an attempt to analyse the performance of Kotak Mahindra bank for pre and post-period. The approach is Based on comparison of ratios in pre and post period. The period taken for pre-merger is two years and post-merger is three years. Performance is evaluated on the basis of, current ratio, quick ratio, Credit Deposit Ratio, debt equity ratio, Investment Deposit Ratio, Cash Deposit Ratio, Financial Charges Coverage, Capital Adequacy Ratio, Net Profit Margin Ratio, Return on Long Term Fund Ratio, Return on Net Worth Ratio, Operating margin Ratio, Gross profit margin Ratio, Adjusted cash margin Ratio for pre and post merger period. The final conclusion is that Merger is a useful strategy for Banks to expand their operations, serve larger customer base, increases profitability, liquidity and efficiency but the overall growth and financial illness of the bank can't be solved from mergers.

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

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

Testing the violation of conservatism accounting principle. Case study on Romanian listed entities

Abstract From the beginning of the debates regarding the conservatism principle, the concept experienced a significant development. As it is one of the most controversial and violated accounting principle, we started to seek how can we help one of the auditor’s challenge in the audit mission: to identify and evaluate the risks from the financial statement level. The most affected accounting principle in Romania is the conservatism principle. After a long time of debates, it was stated that the conservatism principle, considered to be complementary to the “fair view” concept, which means that financial reports shall be required to submit information so impartial and in such a manner as to enable the reader to understand them clearly. Considered as a risk that should be identified, this study demonstrates a relationship between the violation of the conservatism principle and the analysis of the financial indicators, such as: Long-Term-Debt-to-Equity Ratio; Debt-to-Equity Ratio; Global Solvency Ratio; Operating Margin Ratio; Current Finance Ratio; Period of Activity Indicator and Auditor Indicator. Based on a quantitative method, this analyze was realized through three econometric model performed on annual financial statements of the companies from Bucharest Stock Exchange. After validating the sample and analyzing the factorial variables, we selected the best model: the probit model. In conclusion, as can be seen in the paper, the econometric function is efficient, reliable and can be applied to assess the risk likelihood for violating the conservatism principle by a Romanian company.

The excessive profits of defense contractors: Evidence and determinants

A long controversial issue that divides academics, government officials, elected representatives, and the U.S. defense industry is whether defense contractors earn abnormal or excessive profits at the expense of taxpayers. Using an innovative industry-year-size matched measure of excessive profit, we demonstrate three findings. First, when compared with their industry peers, defense contractors earn excessive profits. This result is evident when profit is measured by Return on Assets (ROA), Return on Common Equity (ROCE), and Profit Margin Ratio (PMR). The evidence of excessive profit is less consistent if profit is measured by Operating Margin Ratio (OMR). Secondly, defense contractorsʼ excessive profit is more pronounced after 1992, consistent with the conjecture that the post-1992 significant industry consolidation enabled superior profitability due to both the improved bargaining power and increased political influence of the newly combined firms. Finally, defense contractorsʼ excessive profitability increases with poorer corporate governance, as measured by the duality of the Chief Executive Officer (CEO) and the Chairman of the Board.

Analisa Rasio Keuangan untuk Memprediksi Perubahan Laba pada Perusahaan Telekomunikasi Indonesia

This study was conducted to test the variable Current Ratio (CR), Net Profit Margin (NPM), Operating Margin Ratio (OMR), Return On Equity (ROE), Return on Assets (ROA) and Total Asset Turn Over (tattoo) to changing profit. Data obtained by the method of purposive sampling criteria (1) Telecommunications Companies listed on the Indonesia Stock Exchange (IDX) and consistently throughout the study period (2003 to 2010) and Telecommunication Company that provides the data of financial statements during the study period (2003 to 2010). The analysis showed that the data used in this study have been normally distributed and satisfy the classical assumptions, which include: there is no autocorrelation, no symptoms of multicollinearity, and no symptoms hetereskedasitas. From the results of regression analysis showed that the variables Net Profit Margin (NPM) and Operating Margin Ratio (OMR) partially significant effect on change in earnings. While the variable Current Ratio (CR), Return on Equity (ROE), Return on Assets (ROA) and Total Asset Turn Over (TATTOO) no significant effect on changes in earnings. The six variables used in the study jointly affect changes in earnings. Predictive capability of the six variables simultaneously is equal to 36.4%.

All-Payer Rate-Setting and the Provision of Hospital Care to the Uninsured: The New Jersey Experience

The New Jersey all-payer prospective payment system compensates hospitals for charity care and bad debts. This study examines its impact on the provision of care to self-pay patients. Self-pay patients include two types of uninsured individuals: (1) patients who cannot afford to pay their bill and (2) more affluent patients who can afford to pay but who evade collection. Using data for the period 1979-85, the study employed a sample of seventy-nine New Jersey hospitals that entered the all-payer system during the years 1980-82. A regression equation, which included independent variables to control for the community's pool of uninsured residents and the hospital's share of this pool, was estimated for the number of self-pay discharges. The results indicate that the volume of care provided to self-pay patients increased when the New Jersey all-payer system was introduced. The results also show that teaching hospitals and facilities in urban areas discharge a disproportionately large number of self-pay patients. Analysis of the operating margin ratio suggests that the all-payer system helped to restore the financial viability of hospitals that tend to provide larger amounts of services to the uninsured.