Asset Profitability Research Articles

The profitability of online loans: A competing risks analysis on default and prepayment

Traditional credit scoring models help lenders to make informed decisions in identifying those borrowers most likely to default. We analyse over one million online loans and find that the rates for both default and prepayment are relatively high compared to traditional bank loans. A preliminary nonparametric life-table estimate shows that loans with different terms exhibit varying patterns of hazards. We use a proportional hazard model with competing risks to predict the time to default and prepayment, and parameterise those covariates affecting the time to both events. Two dimensions of predictive performance, the discriminant power and the probability calibration, are then examined. To further support the primacy of profit-driven decisions, we propose a framework based on competing risks survival analysis to estimate the profitability of loans and the return of loan portfolios. Profitability forecasts incorporating both the time to default and prepayment are compared to the profitability of real assets, and finally a penalty is suggested to compensate for those losses incurred by prepayment.

Operating ecology and financial risk analysis of the real estate industry——Empirical analysis based on SWOT-PEST analysis and the F-Probit model

In the context of "no speculation" in China, the survival environment of real estate developers is increasingly complex, and the real estate industry has been declining. Based on this, this paper uses SWOT-PEST analysis to study the business ecology of China's real estate industry, and it uses the F score model to analyze the financial risk of 9 real estate enterprises, and finally uses the Probit regression model and stability test to analyze the influencing factors of profits and total assets of the real estate industry. After studying, the conclusions are as follows: (1) China's real estate industry is still not over despite the downturn. (2) the financial risk of most real estate enterprises is increasing year by year. Although there is no bankruptcy crisis, it should not be underestimated. (3) the liquidity level and cumulative profitability of enterprise assets are important factors affecting the assets and profits of enterprises.

Bank Credit Structure Model Based on Big Data Financial Technology Innovation

The credit business is the primary source of income for commercial banks, and the quality of credit business directly affects the operating efficiency and sustainable development of commercial banks. Constructing an evaluation model that can accurately measure the credit quality of commercial banks and then systematically analyze the distribution and evolution of credit quality is of great significance for judging the operating situation and pattern of credit assets of commercial banks in our country. This paper analyzes the credit asset quality of our country’s commercial banks from five aspects: credit asset scale, profitability, risk security, liquidity, and expansion capability, and uses computer extensive data analysis and structural equation model to analyze the 20 representative banks in our country. An empirical analysis is conducted in a commercial bank.

Analysis of the Profitability of the Banking Sector of the Russian Federation

The profitability of the banking system is of great importance for its sustainability and development, as the 2007–2009 crisis has shown. The research on bank profitability and the factors influencing profitability started relatively recently, about thirty years ago. The results of this research have been contradictory, for many reasons. This paper provides a statistical analysis of the profitability of the Russian banking system over the period 2016–2020. The entire banking sample is characterized by a significant impact on banks’ profitability by the size of capital and a significant variability in the profitability of assets. This was the basis for dividing the banking population into four clusters based on the capital size criterion. The statistical analysis of the significance of standard bank determinants across clusters showed that cost and income management are important for all banks, but the significance of other determinants varies across clusters: the importance of loan shares, the ability to use modern technology, etc. differs for banks of different sizes. Nevertheless, the operating mechanisms of all banks in Russia in terms of ensuring profitability of assets remain in working order and from these points of view banks of different size are in roughly the same conditions.

Asset Profitability in the Electricity Sector: An Iterative Approach in a Linear Optimization Model

In a competitive electricity market, generation capacities can exactly cover their full costs. However, the real market deviates from this ideal in some aspects. One is the concern of non-existent or insufficient scarcity prices. We present an iterative method in a linear optimization model to investigate the profitability of assets in the absence of scarcity prices and how the system changes when this risk is incorporated into investors’ expectations. Therefore, we use a two-step optimization of capacity planning and unit commitment. Iteratively, mark-ups at the height of uncovered costs are added to investment costs. This typically leads to a system with better investment profitability while keeping the system cost increase low. The methodology is applied to a simplified brownfield generation system, targeting CO2-free power generation within 25 years. In a model with annual foresight of actors, iterations result in a generation system with significantly lower (or even no) uncovered costs for new investments within ten or fewer iterations. Our example case with full foresight shows that early-added gas (combined cycle) and wind onshore capacities are able to recover their full costs over a lifetime, even without scarcity prices. However, the contribution margin gap remains high, especially for storage and biomass.

The Influence of Asset Growth, Profitability, and Firm Size on the Capital Structure of Islamic Banking in the World Period 2011-2020

This study aimed to know the influence of asset growth, profitability, and firm size on the capital structure of Islamic banking in the world. This study is quantitive with an explanatory approach. The population in this study consisted of 187 members of IFSB period 2022, and by using a purposive sampling technique there was 18 Islamic banks that used as a samples. The data used was secondary and the data collection method was done by accessing the annually published financial reports on the official website of each Islamic banks from 2011 until 2020. The data analysis used panel data regression with Eviews10. The results show that partially asset growth and firm size have a significant positive effect on the capital structure of Islamic banking in the world, yet profitability has a significant negative effect on capital structure of Islamic banking in the world. Meanwhile, simultaneously asset growth, profitability, and firm size have a significant effect on capital structure of Islamic banking in the world.

Rural Financial Decision Support System Based on Database and Genetic Algorithm

With the development of society and economy, the rural financial institution system mainly includes cooperatives and political and commercial rural financial institutions, and they are supplemented by agricultural insurance, guarantee, securities and other nonfinancial organizations to improve their own functions. Rural credit cooperatives have higher investment and operation risks than other financial institutions. New-type rural financial institutions are more sensitive to the market environment, asset quality and profitability, and risk-taking ability. Internal and external risks continue to accumulate, and their potential is low. These risks pose serious obstacles to the development and growth of financial institutions such as rural banks and microfinance companies, and pose major challenges to the security and stability of rural areas and agriculture. Using database and genetic algorithm to study rural credit risk, profitability, and liquidity, in order to track the impact of each explanatory variable in the system on the explained variable, the impulse response function is used to analyze the impact of nonperforming loan ratio on asset profitability. The data are all close to 0, indicating that the influence between the two is more obvious. The intelligent decision-making system support system evaluates the market risk, credit risk, liquidity risk, and risk management and risk acceptance of rural financial institutions and explores effective countermeasures for their sustainable development.

How Do Fintechs Impact Banks’ Profitability?—An Empirical Study Based on Banks in China

The rapid development of Fintechs has brought opportunities and challenges to the profitability of banks. In this paper, we theoretically expound how Fintechs impact on banks’ profitability, then we establish the Error Correction Model (ECM) and combine this with the Granger causal relation test based on the data of the Industrial and Commercial Bank of China (ICBC) in 2011–2020. The research results show the following findings: (1) banks’ profitability (ROE) has a cooperative relationship with the development of Fintechs (FTI), banks’ assets (TA), the profitability of interest-bearing assets (NIM), credit risks (NPL) and cost control (CTI). (2) Fintechs have a “U”-shaped impact on the banks’ profitability. In the initial stages, Fintechs impact the business of banks, which reduces the profitability of banks; the advantages of Fintechs gradually increase in the middle and later stages, and the profitability gradually increases. (3) The assets of banks (TA) and the profitability of interest-bearing assets (NIM) change in the same direction as banks’ profitability (ROE), while credit risks (NPL) and cost control (CTI) change in the opposite direction from ROE. (4) The level of bank profitability and the development of Fintechs are Granger causes of each other, the size of the bank’s assets is the Grange reason for the increase in profitability and the increase in profitability is the Granger cause for the improvement of NIM and the decline in NPL.

Empirical Analysis of Motives for Intra-Group Lending in Russian Business Groups

This study examines the factors behind the companies’ financial roles on the internal capital markets of Russian business groups. The main goal is to determine the driving motives for intra-group lending in Russia. To find relevant answers, we use logit- and ordered logit-models based on 2018–2020 panel data for 239 Russian joint stock companies representing 21 business groups. Considering the findings of prior studies on debt financing in business groups, we analyze the influence of company size and age, asset tangibility and profitability, leverage, liquidity, sales growth, and the cash-flow rights of controlling shareholders on the probability of a company being a provider (receiver) of intra-group loans.
 The novelty of our findings is ensured by the use of data from the State Information Resource of Financial Accounts that were made publicly available in 2020, enabling us to significantly expand the set of companies under examination. The results of this empirical analysis reveal that internal capital markets of Russian business groups serve as a tool for fund reallocation from older and larger, but less capital-intensive and leveraged companies to smaller, more capital-intensive and leveraged members of the group. The findings demonstrate that the financing advantage motive for intra-group lending is currently predominant in the leading Russian business groups. Thus, Russian business groups use their internal capital markets asan alternative source of funds that alleviates the financing constraints of group members. In the context of continuing anti-Russian sanctions, the limited depth of the Russian financial market and a lack of “long” money in the economy, the research results can be useful for financial managers and policymakers seeking ways to enhance the financial security of group-affiliated companies.

Methodology of financial risks management at the enterprises of forest industrial complex

The essence of financial risk is considered, the sources of uncertainty are singled out, and the definition of financial risk is established. The theoretical aspects of the financial risk management system and the mechanism of their implementation are characterized. The types of financial risks are defined. The main goal of the financial risk system is highlighted; it is the maintenance of the stability of the enterprise in the process of its development, the minimization of losses in economic operations. Therefore, it should solve the following tasks: identifying the most significant threats and identifying weaknesses in the company’s activities. It is outlined that the monitoring of financial risks is a set of information-analytical and control measures for managing financial risks, the content of which is to collect and process the necessary information about changes in relevant indicators, as well as providing results for the analysis of deviations and the assessment of their impact on the FIC. A number of methods and mathematical models for diagnosing the probability of bankruptcy of commercial organizations was considered. It is summarized that the simplest bankruptcy diagnostic method is a two-factor mathematical model, during the construction of which only two indicators are taken into account: the ratio of current liquidity and the specific weight of these funds in liabilities. Different ways of adapting ‘imported’ models (‘five-factor model’ by E. Altman, two-factor mathematical model) to domestic economic conditions are considered, and later Altman developed a similar, but more accurate model, which makes it possible to predict bankruptcy for the next five years with accuracy up to 70%. W. Beaver proposed a five-factor system for assessing the financial condition of an enterprise in order to diagnose bankruptcy. It consists of the following indicators: profitability of assets, specific weight of borrowed funds in liabilities, current liquidity ratio, share of net working capital in assets, Beaver ratio = (net profit + depreciation) / borrowed funds. It was determined that on the basis of statistical data processing, it is possible to apply a system of anti-crisis diagnostics techniques. Scientists equate diagnostics with a tool of anti-crisis policy. Keywords: risks, financial risks, bankruptcy, anti-crisis management, industry, forest industry, forest industry complex (FIC).

FAKTOR-FAKTOR YANG MEMPENGARUHI PENGUNGKAPAN ASET BIOLOGIS PADA PERUSAHAAN PERKEBUNAN DI INDONESIA DAN MALAYSIA

The purpose of this research is to evaluate and assess the impact of biological asset intensity, company size, KAP type, and profitability on the disclosure of biological assets by plantation companies listed on the Indonesian Stock Exchange and Malaysia Stockbiz between 2016 and 2018. The method used in this study is the method of documentation observation of the sample determined using purposive sampling method. The total samples of this study were 15 samples Indonesian plantation companies and 25 samples Malaysian plantation companies. Hypothesis testing is carried out by using multiple linear regression analysis techniques with the statistical test instrument by using SPSS 25. The results show that biological asset intensity and profitability have an effect on the disclosure of biological assets. Meanwhile, company size and type of KAP have no effect on the disclosure of biological assets in Indonesian plantation companies. Furthermore, in Malaysian plantation companies show that biological asset intensity affects the disclosure of biological assets. Meanwhile, company size, type of KAP and profitability have no effect on disclosure of biological assets.

Effects of a development bank on the profitability of commercial banks: Evidence for Brazil

This article aims to investigate the effects of the National Bank for Economic and Social Development (BNDES) on the profitability of assets and equity of Brazilian commercial banks. We use data from state-owned and private commercial banks for the period from 2000 to 2019. The results indicate that an increase in the asset holdings of the BNDES negatively affects the profitability of private banks but does not affect the profitability of state-owned banks. Furthermore, the lines of income from credit operations and services of private banks are negatively affected by an expansion of the BNDES, while trading revenues are positively affected. As for expenses, the larger the BNDES, the higher the financial intermediation expenses for state-owned banks and the lower the operating expenses of private banks.

Determinants of the capital structure and accrual-based earnings management

Purpose: The main purpose of the paper is to examine the relationship between the value of discretionary accruals and the legal and economic determinants of capital structure, which are taken into account in static trade-off theory and pecking order theory. Methodology/approach: Discretionary accruals were extracted using the Jones model and the Kang-Sivaramakrishnana model. The empirical research is based on regression analyses, variable distribution statistics, and Spearman's rank correlation coefficient analyses, among others. The study covered 72 public industrial enterprises listed on the Warsaw Stock Ex-change. Findings: In the studied sample, there are statistically significant relationships be-tween discretionary accruals and variables such as effective tax rate, non-debt tax shield, operating risk, enterprise size, and the operating profitability of assets. Research limitations/implications: Due to the limited sample, the research results cannot be generalized to all industrial enterprises. Moreover, the indicators of good-ness-of-fit of the regression models to the empirical data are low, which indicates the need to further explore this field of research. Originality/value: The presented research methodology is innovative in relation to the Polish capital market. Previous empirical research on this issue is limited to showing the relationship between financial leverage and discretionary accruals.

The Impact of Covid-19 on Financial Performance and Share Price on Cigarette Companies Listed on Indonesia Stock Exchange (IDX)

This study aims to determine and analyze differences in financial performance and stock prices before and after Covid-19 incigarette companies. Financial performance in this study is measured using three ratios namely Return on Asset (ROA), OperatingProfit Margin (OPM) and Net Profit Margin (NPM). The data used in this study is secondary data from the type of financialstatements of Cigarette Companies from the Indonesia Stock Exchange (IDX) website and the official website of cigarettecompanies, and the sampling method used is sampling census because the samples used in this study are the financial statements ofthe entire population of Cigarette Companies registered with the IDX in the third quarter of 2019 to the fourth quarter of 2020. Theanalysis method in this study is the wilcoxon test using SPSS 26. Based on the results of research obtained show Return on Assets(ROA), Operating Profit Margin (OPM) and stock price showed no significant differences before and after Covid-19. Net ProfitMargin (NPM) shows significant differences before and after Covid-19. To find out and analyze the state of cigarette companies inthe Covid-19 pandemic and also as a consideration for investors and business people in policy making

Intensity, Profitability and Disclosure of Biological Assets of Agricultural Companies

The agricultural sector is a sector that plays an important role ini the Indonesian economy because Indonesia is an agriculture country. In agriculture companies, biological asset are part of the company’s assets. This study examines the effect of biological asset intensity and profitability on the disclosure of biological assets of agriculture companies. This study was tested using multiple regression analysis. The sample used in this study is agricultural companies listed on the Indonesia Stock Exchange in 2018-2020. The data in this study is obtained from secondary source i.e. www.idx.com. The results of this study show the intensity of biological assets has a positive effect on the disclosure of biological assets and profitability does not have a positive effect on the disclosure of biological assets.

THE EFFECT OF R&D EXPENDITURES ON PROFITABILITY PERFORMANCE OF THE COMPANY AN APPLICATION FOR BIST TECHNOLOGY COMPANIES

Research and development expenditures have become an important activity that determines and creates a difference for companies in terms of increasing product and service quality, providing competitive advantage and using technology effectively. Companies need to attach great importance to R&D expenditures in order not to fall behind the competitors by catching the needs of today's world and to realize the main goal of profit maximization. The aim of this study is to analyze the effect of R&D investments, which are increasingly important for companies, on the profitability performance of companies. For this purpose, the data of 20 companies operating in BIST technology company, which constantly included R&D expenditures in their footnotes between 2010-2019, were researched by panel data analysis. A total of two models were created to represent firm performance. According to the results of the analysis, it has been determined that R&D expenditures negatively affect the profitability of sales and the profitability of assets in companies, and there is a significant relationship between them.

Is COVID-19 anticipating the future? Evidence from investors’ sustainable orientation

In this paper, we discuss the attractiveness of green and sustainable assets, from an investor perspective. Inspired by the current state of the art, with researchers positively (re)considering the added value of stocks associated with the fulfilment of sustainable development goals, we analyze whether such stocks demonstrated: (1) a different and (2) an outperforming dynamic during various stages of the COVID-19 pandemic. In particular, we examine sustainable-indexed assets and companies with a fully bio-based production system, against a counterfactual group of non-indexed activities operating in the same sectors. Asset connectivity is investigated by means of a correlation network, and portfolio optimization is applied to measure profitability. The results show: (1) fewer connections between bio-based assets and the “rest of the world,” suggesting that, given their potential long-term resilience, investors might consider them capable of mitigating COVID-19 systemic risk, and therefore a valid investment to hold; and (2) the effectiveness and profitability of bio-based assets in portfolios. Considering the latter finding, we document a switching effect after the hard lockdown phase, during which rational investors (seeking an optimal mean–variance) may have inferred the efficacy of capital re-allocation from simply sustainable assets to bio-based companies. Here, we discuss the potential role of the pandemic as an accelerator of the sustainable green transition, considering the welfare implications in terms of socio-economic wellbeing and reduction of negative environmental externalities deriving from the conversion of the traditional production and management system. The profitability of the returns investments might increase the attractiveness of sustainable management organizations, causing the diffusion of these virtuous systems to increase further.

Региональные факторы эффективности стратегии предприятий и организаций

The purpose of the work was to assess the influence of regional factors on the ef-fectiveness of strategies of enterprises and organizations in the regions. The assessment of the correlation between the profitability of assets of enterprises and the organization, including enterprises of the extractive and manufacturing industries, with indicators characterizing the economy of the regions of Russia is carried out. The data of Rosstat were used. It was found that regional factors have little impact on the effectiveness of the strategy of enterprises and organizations. The influence of regional factors is contradictory. First of all, new fixed assets and inequality of income distribution, productivity and capital-labor ratio can have a positive impact on the profitability of assets of enterprises and organizations. The negative impact on the profitability of assets of enterprises and organizations, first of all, can be caused by the innovative activity of organizations and the export of machinery and equipment. The results obtained suggest that in the context of the continuing dominance of the industrial technological order in the Russian economy, machines and equipment can be offered for export, the competitiveness of which is ensured by low prices. It is possible that the statistics of innovation activity does not reflect the essence of innovations, which can be essentially innovations of in-dustrial technological structures.

Debt maturity structure and investment decisions: Evidence of listed companies on Vietnam’s stock market

The article analyzes the impact of debt maturity structure and other factors on investment decisions of enterprises listed on the Vietnam’s stock market from 2010 to 2019. Data used in this study are acquired from the financial statements of 558 enterprises listed on both the Ho Chi Minh and Hanoi stock exchanges in the period 2010–2019, from the FiinPro database. S-GMM regression method is utilised to analyze the influence of debt maturity structure and other factors on investment decisions of listed companies. The analysis results shows that the debt maturity structure has a positive impact on the investment decision of the enterprises. Besides, the profitability of total assets and the fixed assets turnover also have a positive impact on the investment decision of the enterprise, while liquidity and cash flow have a negative impact on investment decisions. Based on empirical results, the study proposes some recommendations to help the managers of listed companies to build a reasonable debt maturity structure in the direction of using more long-term debts to increase investment efficiency. At the same time, the study recommends some policy implications for the Government in managing macroeconomic policies in order to create favourable conditions for businesses to access many long-term capital sources.

The effect of asset quality, profit and loss sharing on Sharia Banking Liquidity in Indonesia

This study aims to determine the effect of asset quality variables (Non-Performing Financing), Profit and Loss Sharing (profit-loss sharing investment and profit-sharing investment account), capital adequacy ratio, bank size, return on assets, and gross domestic product on Islamic banking liquidity in Indonesia. The analysis was conducted using a sample of 7 Islamic commercial banks from the period March 2015 to December 2019. This study uses 2 multiple regression models of panel data with the results showing that Non-Performing Financing, profit-loss sharing investment, bank size, gross domestic product affect the liquidity of Islamic banks. , then for-profit sharing investment account, capital adequacy ratio, return on assets, does not affect the liquidity of Islamic banks.