Poor Financial Performance Research Articles

The other ISL: analysing the finances of the Indian Super League (football) and its franchisees

ABSTRACT Rationale: This paper conducts a holistic performance analysis of the Indian Super League (ISL) football competition and its member franchisees between 2014–2015 and 2019–2020 with a particular focus on financial and sporting performance metrics. Methodology: The study utilises the PAM for professional football teams which consists of eight financial indicators and three sporting indicators. The data for this research were obtained by dissecting the annual accounts of ten ISL franchisees between 2014–2015 and 2019–2020 season. Findings: The results (at both franchisee and league level) show financial problems that have, in some ways, stunted growth of the ISL. Many franchisees have reported poor financial performance for the period of the study and there are problems with debt and profitability. As a result, our findings show that for this study, there is also no statistical evidence that having better financial health leads to superior sporting performance in the ISL to date. Practical implications: The ISL face challenges at governance level due to its peculiar structure and arrangements between the league, franchisees, and broadcasters. Financial performance has been an issue since the inception of the league and franchisees have cost control issues that have been commonplace in other major sporting leagues around the globe. Despite being in its infancy stage, the warning signs can lead to stagnation and regression of the league in the future, if not addressed properly.

Government Intervention and Debt Financing Costs: Evidence from Government-Guided Funds

ABSTRACT Few studies examine how government intervention influences debt financing costs. We use firm ownership by government-guided funds (“GG funds” or “GGFs”) as a proxy for government intervention and explore whether and how GG funds influence debt financing costs. Using a 2009–2020 sample of A-share listed firms in China, we find that GG funds significantly increase debt financing costs, mainly because firms held by GGFs signal more information regarding their poor financial situation and performance to debt providers, which thus charge higher interest rates for loans. Moreover, this effect is stronger for firms located in the eastern region, for firms with a higher market index and for non-SOEs (vs. SOEs). Overall, we provide evidence that the government plays an important monitoring role in debt financing costs through GGF ownership.

Impact of analyst report on the behavior of retail investors: a study during COVID-19 in India

PurposeOne of the adverse effects of COVID-19 is on poor economic and financial performance. Such economic underperformance, less demand from the consumer side and supply chain disruption is leading to stock market volatility. In such a backdrop, this paper aims to find the impact of COVID-19 on the Indian stock market by analyzing the analyst’s report.Design/methodology/approachThe sample includes a cross-sectional data set on selected Indian firms that are indexed in BSE 100. The authors calculate the score of disclosure tone by using a textual analysis tool based on the analyst report of selected BSE 100 firms' approach in tackling COVID-19’s impact. The relationship between the tone of the analyst report and stock market performance is examined. This empirical model also survives robustness analysis to establish the consistency of the findings. This study uses both frequentist statistics and Bayesian statistics approach.FindingsThe empirical result shows that tone has negative and significant influence on stock market performance. This study indicates that either analysts are not providing value-relevant and incremental information, which can reduce the stock market volatility during this pandemic situation or investors are not able to recognize the optimism of the information.Practical implicationsThis study provides an interesting insight regarding retail investors' stock purchasing behavior during the crisis period. Hence, this study also lays out crucial managerial implications that can be followed by preparers while preparing corporate disclosure.Originality/valueIn the concern on pandemic and its impact on the stock market, this study sheds light on investors' preferences during the crisis period. This study uniquely focuses on analyst reports and investors' preference which has not been studied widely. To the best of the authors’ knowledge, this is the first study in the Indian context, which aims to understand retail investors’ investment preferences during a pandemic.

Applying Integrated QFD-MCDM Approach to Strengthen Supply Chain Agility for Mitigating Sustainable Risks

As the global economy develops and the complexity of supply chains increases, the effective mitigation of sustainable supply chain risks in electronics manufacturing has become important. While quality function deployment (QFD) has been successfully applied to many fields of multicriteria decision-making (MCDM), there is a lack of research on constructing a house-of-quality model that can be combined with MCDM for connecting supply chain agility with sustainable supply chain risks, especially in the field of electronics manufacturing. The objective of this study was to develop an integrated framework of QFD and MCDM and to devise an effective method to mitigate sustainable supply chain risks by improving supply chain agility. Such a method can help the multinational electronics manufacturing industry to develop stable and sustainable supply chains. In a multinational electronic manufacturing enterprise as an example, the results showed that the case enterprise work should focus on improving agility ‘production and sales capability’, ‘quick decision-making/strategic flexibility’, ‘electronic shiapment of finished products to control shipment operations’, ‘supplier on-time delivery rates’ and ‘cost minimization’. Improving agility would help enhance the ‘credibility and competence of operators and leaders’ and ‘product safety and quality’ and reduce ‘goods disruption or delay due to inadequate supply mobility and poor financial performance’, ‘information system instability’, the ‘long product lead time’ and other key sustainable supply chain risks. The proposed framework can not only be effectively used by other electronics manufacturers to develop agile strategies to mitigate sustainable supply chain risks, but also provides a reference for risk management for manufacturers in other fields.

The Impact of CEO Duality and Financial Performance on CSR Disclosure: Empirical Evidence from State-Owned Enterprises in China

This paper studies the effects of a firm’s financial performance (FP) and chief executive officer’s (CEO) duality on the quality of corporate social responsibility (CSR) disclosure in the context of state-owned enterprises (SOEs) among Chinese A-share-registered companies. The results depict a negative relationship between CEO duality and CSR disclosure. Our results demonstrate that better-performing firms disclose CSR information more frequently and of higher quality compared with firms with poor financial performance. This role of financial performance in the quality of CSR disclosure is generally valuable in public enterprises; however, it is relatively sluggish in state-owned enterprises the outcomes indicate that the dual leadership structure reduces assessments and renders CEOs less liable to their stakeholders. Therefore, this study offers valuable information and details for regulators to improve corporate governance and CSR from the perspective of stakeholder theory.

Financial Decisions and Profitability of Large-scale Retail Supermarkets in Kenya: Application of Dividend Decisions

Financial decisions ensure that supermarket managers invest in viable projects, stipulate optimum capital structure and adequately compensate shareholders. For the last two decades, large-scale retail stores have been facing poor financial performance leading to the closure of some of their branches. This study aimed at assessing the effect of financial decisions on the profitability of large-scale retail supermarkets in Kenya. The specific objective of the study was to examine the effects of dividend decisions on the profitability of large-scale retail stores in Kenya. The study was guided by pecking order theory. The target population was nine largescale retail supermarkets in Kenya. Census sampling technique was adopted therefore all the large-scale retail supermarkets were used in the study. Data was collected from audited financial statements. Panel Data was analyzed using descriptive and inferential statistics. Descriptive statistics comprised of mean, minimum value, maximum value, and standard deviation. Inferential statistics consisted of random effects model. Positive and statistically significant effect was found to exist between dividend decisions and profitability; this was supported by regression coefficient of 0.4180 and p-value of 0.016 less than 0.05 level of significant. The study therefore concluded that increased retained earnings would lead to improved profitability. The study recommends that the management of large-scale retail supermarkets should formulate ideal dividend policies that will properly compensate shareholders while ploughing back enough profits for future investments.

Effects of Debt Financing on Financial Performance of Small and Medium-Sized Enterprises in Homa Bay Town, Kenya

The SMEs in Kenya account for 98% of businesses and create about 30% of jobs annually. Many SMEs face challenges of a stable financing cycle, and are unable to adjust to sales cycles that are available in the market, hence affecting their financial performance. Although SMEs have numerous accesses to debt financing in Kenya, they still struggle to remain into operation due to poor financial performance. Further, studies also have emphasized that despite the fact that debt financing is readily available in Kenya, most SMEs cannot access them due to lack of collateral and ignorance of the various financing options available in the country. Therefore, this study sought to establish the effect of debt financing on financial performance of small and medium-sized enterprises (SMEs) in Homa Bay Town, Kenya. Specifically, the study sought to identify the effect of long term financing on financial performance of SMEs in Homa Bay Town, identify the effect of trade credit on financial performance of SMEs and examine the effect of short term financing on performance of SMEs in Homa Bay Town. The target population was made up of 825 retail SMEs in Homa Bay Town. The study adopted Yamane’s formula to derive the sample size of 296 SMEs. Primary data was obtained from the sampled SMEs using structured and semi structured questionnaires. The study concluded that there is a great effect of debt financing on the financial performance of SMEs in Homa Bay Town, with long term and short term financing having the highest effect and trade credit ranked lowest in terms of statistical significance.

Determinants of Government Characteristics and Audit Findings on Local Government Financial Performance

This study is based on the low success of local governments' financial performance in West Java Province, as evidenced by the fact that financial reports of local governments that receive unqualified opinions are still being found. The detection of numerous frauds in local governments is responsible for the majority of incidents of poor financial performance in local governments. Local government financial performance is related to local government size, dependence on central government, local spending, and audit findings. The purpose of this study was to examine the influence of local government characteristics and audit findings on the financial performance of local governments. Techniques analyzing data used regression model selection test with STATA version 16. This study builds on agency theory to develop a conceptual framework that connects local government size, dependence on central government, local expenditure, audit findings, and financial performance. The results of this study show that the size of local government, local spending has a significant effect on local government financial performance based on independence ratio and operating expenditure activity ratio, local government financial performance is unaffected by the dependence of central government or audit findings. Contributions to the West Java Provincial Government are required to be taken into account when making decisions and policies for the improved financial performance of local government.

Financial Ratio Analysis for PT XL AXIATA Tbk

This study aims to determine the performance of financial statements and health level PT XL Axiata Tbk. This study also investigates based on the ratio of profitability, liquidity, activity and solvency from the 2015-2020 period. The company's soundness assessment method uses the Altman Z-Score method. The results of the study of profitability ratios indicate that the performance of financial statements is not very good because it is not optimal in generating profits. The liquidity ratio shows that the performance of the financial statements is not very good in meeting its current liabilities. The activity ratio shows that the company's financial statement performance is less effective in utilizing the asset turnover ratio and its working capital but has been maximized in collecting receivables from customers. The solvency ratio shows poor financial statement performance because the company's financial risk is very large but the company is able to pay interest expense when it matures. The results of the analysis of the Altman Z-Score method show that the company's health level is in a vulnerable state and has a high risk of bankruptcy

ANALISIS KINERJA KEUANGAN BERDASARKAN RASIO ARUS KAS PADA PT PRIMARINDO ASIA INFRASTRUCTURE, TBK. TAHUN 2015 – 2019 YANG TERDAFTAR DI BURSA EFEK INDONESIA

This study aims to determine how the financial performance based on the cash flow ratio at PT Primarindo Asia Infrastructure, Tbk. 2015 – 2019 Listed on the Indonesia Stock Exchange. The research method used is a quantitative method where after all the required data has been collected, the next step is to analyze the collected data to be understood and processed in the form of explanations. After analyzing and discussing the problem, the authors conclude that the cash flow ratio shows poor financial performance, because the average ratio decreases and is below 1. There are only 2 ratios that are considered good, namely the operating cash flow ratio to interest and cash flow ratio operations to capital expenditures.

Barriers to product innovation among the manufacturing micro, small and medium enterprises in Malawi

Most micro, small, medium enterprises in Malawi struggle to grow and survive despite their critical role in the socio-economic development of the country. One major contributing factor is their inability to innovate. This study was therefore aimed at investigating the innovation barriers affecting the manufacturing MSMEs. The study was conducted among the 45 manufacturing MSMEs operating in the Malawi’s commercial city of Blantyre. The study adopted a case study approach and employed both quantitative and descriptive approaches. Empirical data was collected using a semi-structured questionnaire and one- on- one interview. The results of the study revealed that factors such as market competition, difficulty in accessing loans, inadequate government support, labour laws, taxes and regulations in the external environment, and inadequate financial resources, lack of qualified personnel, and poor financial performance within the enterprises hamper innovation activities within the MSMEs. Results of the study also revealed that despite government efforts to promote MSMEs innovativeness, most MSMEs do not participate in such government interventions and worse still some are not even aware of the existence of such interventions. The study therefore recommends that government should intensify its efforts to provide financial support in form of soft loans, entrepreneurial training to MSMEs and promote innovation in MSMEs through relevant policies. Key words: Micro small medium enterprises (MSMEs), innovation, barriers, manufacturing.

First Year of Skilled Nursing Facility Value-based Purchasing Program Penalizes Facilities With Poorer Financial Performance.

The Skilled Nursing Facility Value-based Purchasing Program (SNF-VBP) incentivizes facilities to coordinate care, improve quality, and lower hospital readmissions. However, SNF-VBP may unintentionally punish facilities with lower profit margins struggling to invest resources to lower readmissions. The objective of this study was to estimate the SNF-VBP penalty amounts by skilled nursing facility (SNF) profit margin quintiles and examine whether facilities with lower profit margins are more likely to be penalized by SNF-VBP. We combined the first round of SNF-VBP performance data with SNF profit margins and characteristics data. Our outcome variables included estimated penalty amount and a binary measure for whether facilities were penalized by the SNF-VBP. We categorized SNFs into 5 profit margin quintiles and examined the relationship between profit margins and SNF-VBP performance using descriptive and regression analysis. The average profit margins for SNFs in the lowest profit margin quintile was -14.4% compared with the average profit margin of 11.1% for SNFs in the highest profit margin quintile. In adjusted regressions, SNFs in the lowest profit margin quintile had 17% higher odds of being penalized under SNF-VBP compared with facilities in the highest profit margin quintile. The average penalty for SNFs in the lowest profit margin quintile was $22,312. SNFs in the lowest profit margins are more likely to be penalized by the SNF-VBP, and these losses can exacerbate quality problems in SNFs with lower quality. Alternative approaches to measuring and rewarding SNFs under SNF-VBP or programs to assist struggling SNFs is warranted, particularly considering the coronavirus disease 2019 pandemic, which requires resources for prevention and management.

Comment Letters on Annual Reports: Evidence from an Emerging Market

SYNOPSIS This paper examines comment letters on firms' annual reports in an emerging market. The literature primarily focuses on comment letters issued by the U.S. Securities and Exchange Commission (SEC), although many other market regulators also use SEC-style comment letters. Comment letters can potentially be very impactful in emerging markets due to weak institutions and low disclosure quality in these markets. Using comment letters in China from 2015 to 2019, I find that the market response to the receipt of comment letters is significantly negative and associated with the severity of the comment letters. The receipt (severity) of comment letters is associated with adverse regulatory consequences, CEO turnover, corrective actions to remedy financial reporting, and poor future financial performance in the propensity score matched sample (recipient sample). Overall disclosure quality in the post-review year does not increase, but some comment letter topics prompt topic-specific financial reporting changes.

Effect of Accounts Receivable Management on Financial Performance of Chartered Public Universities in Kenya

Accounts receivable refer to the payments expected by an organization in the foreseeable future. Accounts receivable management plays an integral part in the financial performance of higher learning institutions. With several public universities experiencing no or delayed payments from the respective receivable accounts, such institutions have been characterized with financial constraints, struggling to meet their immediate obligations. From reduced government capitation, lack of the module two students (Self-Sponsored), and students' non-compliance on fee payment policy, public universities in Kenya continue to experience poor financial performance due to inefficiency of their accounts receivable management. This study sought to examine the effect of accounts receivable management on the financial performance of chartered public universities in Kenya. The general and specific objective was to determine the effect of accounts receivable management on the financial performance of chartered public universities in Kenya. The study used the Cash Conversion Cycle (CCC) theory. Descriptive and inferential research designs were applied to analyze data. The target population was all the 31 chartered public universities in Kenya, and as such, the census survey method was adopted to collect data. Secondary panel data was extracted from the respective institutions’ audited annual reports for 2017, 2018, and 2019. The SPSS Version 25 was applied to analyze descriptive and inferential statistics. The study found that accounts receivable management had an indirect and significant effect on the financial performance of chartered public universities in Kenya (p= 0.000, β= -0.875). The study concluded that accounts receivable management has a substantial effect on the financial performance of chartered public universities in Kenya. The study recommended that in line with the IFRS 5 and IAS 1, respective university managements should develop optimal debts management frameworks to guide their financial management operations to realize sustainable financial performance both in the short and long runs.

Working capital management impacts on small-scale coffee wet mills' financial performance in eastern Kenya

The manufacturing sector is critical in the realization of the economic pillar of the Kenyan Vision 2030. Over the last decade, the sector has experienced declining growth, mainly attributed to the agro-processing industry's poor financial performance. The Kenyan government has initiated stringent financial reforms across agro-based sectors, including coffee processing firms, to improve performance and increase farmers' returns. However, limited studies have investigated the impacts of working capital management (WCM) on small-scale coffee wet mills' financial performance. We assessed the effect of working capital management on financial performance in small-scale coffee wet mills. We collected the data from 41 small-scale coffee wet mills in Embu County, Eastern Kenya. We adopted a multivariate regression analysis approach on panel data (2014–2018) to analyze working capital management's impact on small-scale coffee wet mills' financial performance. Our findings showed that the current ratio and average payment period negatively affected the return on small-scale coffee wet mills' assets. Thus, the wet mill processors could lower their payables period and current ratio to improve return on assets. The study revealed that the firm's Size and age also had a positive and negative effect, respectively, on return on assets of small-scale coffee wet mills. Both average payment period and current ratio had a positive effect on return to farmers. We conclude that working capital management, that is, average payment period and current ratio, negatively influences ROA while positively influencing farmers. Therefore, the management of the coffee wet mills should increase the current ratio and lengthen the average payment period to enhance return payable to farmers.

PENGARUH PENERAPAN SISTEM AKUNTANSI KEUANGAN DESA DAN KUALITAS APARATUR DESA TERHADAP KINERJA KEUANGAN DESA KECAMATAN PULAU RAKYAT KABUPATEN ASAHAN

The government accounting system is a systematic series of procedures, operators, equipment, and other elements to realize the accounting function from transaction analysis to financial reporting within government organizations. Quality is defined as the whole of a product, person and process or system that can meet expectations (expectations) or meet the desired satisfaction. Quality human resources are supported by educational backgrounds, often attend education and training and have experience in finance. The performance of village financial management determines whether or not village goals are achieved. Poor financial management performance which is characterized by inconsistent and standardized recording and reporting can make the process of evaluating the use of funds difficult to do. About village financial management implies the importance of applying the principles of transparency, accountability, participatory in the preparation of village finances. Village financial system. In addition to the need for adequate competence and understanding of accounting from each individual, adequate supervision is also needed in managing the village financial system. The management of village finances is still lacking in supervision and lack of tightening of the use of the budget. This study aims to determine the village financial accounting system and the quality of the village apparatus on village financial performance in Pulau Rakyat Subdistrict, Asahan Regency and find out whether the village financial accounting system and the quality of the village apparatus on village financial performance are in accordance with the theory and techniques of the accounting system carried out in this study. by distributing questionnaires.

Corporate and Functional-level Performance Feedback in New Product Development

In this study, we add new insights in the performance feedback theory by arguing that although organizations give primacy to feedback regarding corporate-level financial goals, they also have to attend to a variety of functional-level performance signals to identify more suitable solutions and better adjust their behavior. However, due to the multiplicity of functional goals, we build on Gestalt theory to suggest that firms may use two key properties of functional performance feedback (i.e., simplicity and predictability) to guide their problemistic search and effectively select behavioral responses. In a longitudinal sample of 97 global incumbent pharmaceutical firms, we find that a simpler and more predictable set of functional performance signals strengthens the relationship between poor financial performance and the number of new products that firms initiate.

Corporate- and Functional-level Performance Feedback in New Product Development

In this study, we add new insights in the performance feedback theory by arguing that although organizations give primacy to feedback regarding corporate-level financial goals, they also have to attend to a variety of functional-level performance signals to identify more suitable solutions and better adjust their behavior. However, due to the multiplicity of functional goals, we build on Gestalt theory to suggest that firms may use two key properties of functional performance feedback (i.e., simplicity and predictability) to guide their problemistic search and effectively select behavioral responses. In a longitudinal sample of 97 global incumbent pharmaceutical firms, we find that a simpler and more predictable set of functional performance signals strengthens the relationship between poor financial performance and the number of new products that firms initiate.

Effect of Internal Control Systems on Financial Performance of Public Universities in Kenya

Most public Universities across the world have reported suboptimal financial performance compared to private universities. The poor financial performance can be attributed to financial management practices. The sound financial management practices require the institutions to have robust internal control systems. However, there are limited empirical research findings regarding the relationship between the internal control systems and financial performance in public universities in Kenya. The general objective of the study was to establish the effect of internal control systems on financial performance of public universities in Kenya. The study specific objective was to investigate the effect of detective controls on the financial performance of public universities in Kenya. The study was anchored on agency theory, stewardship theory, systems theory and attribution theory. The study adopted a causal research design. The target population of respondents were the deputy vice chancellors finance, registrar finance and administration, ICT personnel, finance officers and internal auditors in the 37 public universities in Kenya. The target population was 185 respondents. The study worked with a sample of 34 public universities through stratified random sampling, and the other three were used for pilot testing. Primary data was collected from sample population using semi-structured questionnaires. Secondary data was collected through evaluation of reports, organizational journals, publications and review of information from the organizations website. Quantitative data was analyzed using Statistical Package for Social Sciences (SPSS). All the questionnaires received were referenced and items in the questionnaire coded to facilitate data entry. After data cleaning which entailed checking for errors in entry, descriptive statistics and frequencies were estimated for all the variables and information presented inform of tables, graphs and pie charts. Descriptive statistics and inferential statistics were used because they enabled the researcher to meaningfully describe distribution of scores or measurements using a few indices. Inferential data analysis was done using Pearson Correlation coefficient and regression analysis. Regression analysis was conducted to empirically determine whether detective controls were significant in determining the financial performance of public universities in Kenya. Regression results indicated the goodness of fit for the regression between detective controls and financial performance was strong. From the regression model, detective controls and financial performance to a constant zero, financial performance would be 3.132. It was established that a unit increase in detective controls would cause an improvement in financial performance by a factor of 0.237. This clearly showed that there was a positive relationship between detective controls and financial performance. P-value was less than 0.05, which showed that variables covered in the study on detective controls were statistically significant to influence financial performance. The study concluded that detective controls had a positive and significant influence on the financial performance of public universities in Kenya. Keywords: Internal control Systems, Detective Controls, Financial Performance DOI: 10.7176/RJFA/12-16-09 Publication date: August 31 st 2021

Moving Towards a Stakeholder Orientation: Evidence from the Analyses of Chief Executive Dismissal

In the recent two decades, U.S. business has been increasingly taking a stakeholder orientation, which poses an ideological challenge to the shareholder value logic. However, little is known about how this challenge affected the way corporations are governed. We study the historical evolution of the determinants of chief executive officer (CEO) dismissal in large U.S. firms during 1980-2015. Using event history models, we test for changes over time in the role prior engagement in shareholder-oriented practices (such as business refocusing and workforce downsizing) or corporate social responsibility (CSR) plays in the relationship between poor financial performance and CEO dismissal. We find that, in the late 1980s and 1990s, CEOs were less heavily penalized for poor performance when refocusing and downsizing the corporation and more heavily penalized for CSR activity. In the post-Enron era, CEOs were less heavily penalized for CSR activity, and were not rewarded for refocusing and downsizing. We provide evidence of the evolution of U.S. corporations from a shareholder primacy model towards a more stakeholder-oriented one. We discuss implications for the literatures on institutional theory, performativity, and corporate governance.