Profitability Policy Research Articles

El presupuesto maestro y los indicadores de control en el plan estratégico

El presente trabajo de investigación pretende analizar críticamente los enfoques y matices documentados en un intercambio dialógico con diferentes autores acerca de lautilidad del presupuesto maestro como herramienta para la asignación de fondos, pues éste establece dimensionesy medidas de manera anticipada al tener no solamente unenfoque contable, sino administrativo y financiero a la vez.Se entiende que los mecanismos de control administrativo son a su vez sistemas retroalimentadores para laplaneación y el control. Por el contrario, el presupuestomaestro es una herramienta que cumple los requisitos como indicador; que mide los procesos de la empresa. Puedealimentar cualitativa y cuantitativamente el proceso deasignación de fondos al acompañar, complementar y racionalizarla decisión de desembolso de capital. Indicar dondeexisten debilidades y fortalezas operativas, marcar eficiencias o anticipar ahorros en costos de manera que se asigneel efectivo disponible a las inversiones que cumplan con la política de rentabilidad y con productividad y eficiencia en el uso y aplicación de recursos. Por tanto, el presupuesto maestro es una herramienta útil en relación al diseño de estrategias y los sistemas de control, los objetivos inductores y el proceso de asignación de recursos.

PROFITABLITY AND LIQUIDITY ON CORPORATE VALUE THROUGH DIVIDEND POLICY AS INTERVENING VARIABEL: EMPIRICAL STUDY ON ISLAMIC CAPITAL MARKET

The purpose of this study is to examine the effect of profitability and liquidity on dividend policy and firm value. It also examines the role of dividend policy as an intervening variable between profitability and liquidity on firm value. Firm value is measured by Tobin's Q, dividend policy is measured by dividend payout ratio (DPR), profitability is measured by return on assets (ROA) and liquidity is measured by current ratio (CR). The population of this study is companies registered in List of Sharia Securities consisting of more than 300 companies. Samples were taken as many as 100 companies with a purposive sampling method. The observation period is 3 years (2016-2018). To test hypotheses using multiple regression analysis. The result shows that profitability is significant and positively effect on dividend policy, while liquidity does not affect on dividend policy. Profitability and dividend policy have a positive and significant effect on firm value, while liquidity has no effect on firm value. Another result of dividend policy is able to be as an intervening effect on profitability of firm value but not as an intervening liquidity relationship to firm value.

Unexpected Health Insurance Profits and the COVID-19 Crisis.

Unexpected Health Insurance Profits and the COVID-19 Crisis.

The Indirect Impact of Profitability on Firm Value: Evidence Dividend Policy as Moderators and Capital Structure as Mediator

Firm value is a basis for investors in deciding whether or not to invest in a firm. Therefore, a study on issuer’s strategies to maximize firm value requires special attention, especially in dealing with the Islamic capital market which is growing rapidly from time to time. A particular study is important to be conducted to look at the factors that have a direct or indirect effect on a firm's value, which includes; profitability, capital structure, and dividend policy. The path analysis approach is employed in the current study to reveal the effect of profitability on firm value, both directly and indirectly, with the intermediaries of capital structure and dividend policy. The results of the analysis indicate that profitability has a direct positive and significant effect on firm value and a negative and significant effect on capital structure, while the capital structure has a negative and insignificant effect on firm value. Indirectly, dividend policy moderates and strengthens the effect of profitability on firm value, but on the other hand, the capital structure does not mediate the effect of profitability on firm value. The absence of capital structure role in mediating the relationship between profitability and the firm value indicates that investors can determine the value of the firm directly by simply looking at the level of profitability, regardless of management’s strategy in arranging the capital structure.

FAKTOR INTERNAL DAN FAKTOR MAKROEKONOMI YANG MEMPENGARUHI PROFITABILITAS ASURANSI SYARIAH DI INDONESIA PERIODE 2016-2018

This research aims to examine the company's internal factors and macroeconomic factors partially and simultaneously on the profitability of islamic insurance companies in Indonesia with proxied by Return On Assets. This study uses a quantitative approach with panel data regression analysis techniques. The population of this study is sharia insurance companies in Indonesia during the period 2015-2018. The purposive sampling method is used to determine the sample used and obtained 36 Islamic insurance companies, which consist of Islamic general insurance companies and Islamic life insurance companies. The estimation results of the Fixed Effect Model with the Weighted Least Square (WLS) method show that company size, contribution growth, retakaful, leverage, investment returns, GDP and inflation simultaneously affect the profitability of islamic insurance companies in Indonesia. Partially, contributions growth and investment returns have positive and significant effect on the profitability of Islamic insurance companies in Indonesia. The variabel Company size and GDP have positive and not significant effect on the profitability of Islamic insurance in Indonesia. While the variabel leverage, retakaful, and inflation have a negative and not significant effect on the profitability of Islamic insurance companies in Indonesia. Keywords: Profitability, Islamic Insurance, Company Size, Contribution Growth, Retakaful, Leverage, Investment Results, GDP, Inflation

Does boardroom nationality affect the performance of UK insurers?

Drawing on the board capital literature, we use a panel data design to investigate the effect of boardroom nationality on the profitability and solvency of property-casualty insurers operating in the United Kingdom (UK). We find that boardroom nationality influences corporate outcomes depending on the financial aspects being measured. For example, North American directors are linked with profitable outcomes, while European directors tend to be associated with better solvency. This reflects differences between the shareholder value corporate culture in North America and stakeholder approaches more common in Europe. Our results could help insurers, regulators, and others (e.g., investors) to better understand the potential performance implications of the appointment of directors of different nationality.

COVID-19, insurer board utility, and capital regulation

This paper develops a down-and-out call option model by introducing a structural break in volatility to capture the coronavirus (COVID-19) outbreak. The life insurer's equity and its board's utility are evaluated at the optimal guaranteed rate in the equity maximization. Results suggest that the seriousness degree of the COVID-19 outbreak and capital regulation enhance the optimal guaranteed rate and the board's utility. Increased the board's utility by increasing liabilities costs insurer profitability. Conflicts of incentives can arise during the COVID-19 outbreak.

Borrower capital, shadow insurance, and life insurer performance

ABSTRACT The paper develops a ‘capped’ call option model by calibrating Briys and de Varenne (1994) with integrating Dermine and Lajeri (2001) that the borrowing-firm credit risk is introduced to the lending function of the insurer. Results show that shadow banking entrusted loans enhance policyholder protection and help the insurer from the standpoint of survival at the cost of insurer profitability. We also suggest that shadow insurance and lending to high-quality borrowing firms captured by low leverage might increase policyholder protection and insurer survival, thereby contributing to insurance stability.

Ecotourism development and the heterogeneity of tourists

Ecotourism is potentially capable of making biodiversity conservation and ecosystem management economically feasible. Here, we propose a simple model for ecotourism development considering the heterogeneity of tourists, motivated by the case of Jeju Island, South Korea. We analyze the optimal investment in accommodation capacity (i.e., hotels, restaurants, and transportation) and in improving the quality of the environment (i.e., biodiversity, landscape, and cultural activities). “General tourists” are abundant but will not return to the focal site, and their future number is unpredictable, while “loyal tourists” may return to the site if they are attracted by its environmental and/or cultural assets. The analysis shows that the economically profitable policy is either the one with a large investment in accommodation capacity targeting general tourists or the one with a large investment to environmental quality targeting loyal tourists, but an intermediate mixture of these extremes cannot be the optimal. We also discuss “zoning,” in which a site is separated to two areas, and many visitors stay in the first area and visit the second area to enjoy the high-quality environment.

The Effect of Cash Holding Policy, Dividend Policy and Profitability on Stock Prices


 
 
 Increased non-resident ownership makes the capital market vulnerable to declining stability and the global economy that can affect the condition of the financial sector as indicated. These factors will affect the company's stock price is the company's cash holding policy, dividend policy and profitability performance. This study aims to determine the effect of cash holding policy, dividend policy and profitability on the company's stock price. Cash holding policy variables are measured by a cash to asset ratio, dividend policy is measured by a dividend payout ratio, profitability is measured by return on equity (ROE) and stock prices are measured by a price to book ratio. This research is a quantitative study using multiple regression analysis methods. The data used are secondary data from the annual report and the stock market performance reports of financial sector companies listed on the Indonesia Stock Exchange. The sampling method uses purposive sampling with an observation period of 2011 - 2017 and there are 14 companies that meet the criteria. The results showed that cash holding and profitability policies had a significant effect on stock prices dividend policy had no significant effect on stock prices.
 
 

Financial data reporting analysis of the factors influencing on profitability for insurance companies

In this article the econometric analysis of panel data for insurance companies of the Republic of Kazakhstan from with a research objective of financial figure for profitability and influencing of factors defining profitability was performed. The article reveals the indicators that affect the profitability of insurance companies in order to further forecast. Independent variables were calculated using information on insurance companies of the Republic of Kazakhstan available in the public domains, mainly data from financial statements. The author reaches to prove that the data on insurance companies’ obligations exert special influence on the evaluation of the profitability of the insurance company. The article suggests a methodical approach to measuring financial indicators of insurance companies based on panel data models, taking into account industry and individual differences. The research is carried out using the Gretl software package. Panel data models with fixed effects, panel data models with random effects were applied, and the most effective model was selected by the Hausman Test. As a result, it is proved that the profitability of the insurance company is affected by three indicators, two of which are calculated on the financial statements, including the financial leverage. This allows us to use these indicators in further forecasting the profitability and financial stability of insurance companies. Correctness of the assessment of profitability and forecasts are influenced by the correctness of data in the financial statements. The quality of models is limited by the quality of the financial statements of companies analyzed in this article.

Corporate Profitability and Economic Policy During Argentina’s Great Depression, 1929–1934

An analysis of corporate profitability leads to a reevaluation of economic policy during Argentina’s Great Depression. While the overall profit rate collapsed, some sectors were more affected than others: Commerce, insurance, and agriculture were worst hit, followed by transportation, industry, and finally banking, which was a beneficiary of economic policy, especially the decision not to default on or renegotiate the external public debt. Had a different economic policy been pursued, it is likely that the international crisis would not have affected Argentina so severely. Most importantly, it would have been possible to further devalue the peso, which would have benefitted both agriculture and industry. Moreover, interest rates would have been lower, and continued government borrowing would not have crowded out investment in the private sector. An analysis of corporate profitability thus leads to a less positive view of economic policy during Argentina’s Great Depression than is often found in the existing literature.

Study of Financial Management Policy on Company Value (Study of the Textile and Garment Industry on the Indonesia Stock Exchange Period 2013-2017)

The purpose of this study was to determine the effect of financial management policies which include investment policy, debt policy, profit policy) on the value of the company in the textile and garment industry companies that are listed on the Indonesia Stock Exchange (IDX) for the period 2013-2017. The research method used was purposive sampling and obtained sample of 6 companies from population of 17 textile and garment industry companies that were listed on the Indonesia Stock Exchange (IDX) for the period 2013-2017. The analysis technique used is multiple linear regression analysis. Based on the results of the study show that investment policies partially have no significant effect on firm value, debt policy partially has a significant effect on firm value, earnings policy has a significant effect on firm value, then based on the coefficient of determination (r2) of 66.9% explained by independent variables namely: investment policy, debt policy, profit policy. While the remaining 33.1% is explained by other variables not examined in this study, for example, macroeconomic conditions, capital structure, company growth.
 Keywords: Investment policy; debt policy; profit policy; firm value

Effect of Market Share and Firm Size on Efficiency and its Implications to Profitability of Sharia Insurance in Indonesia

Since Indonesia as a developing country which consists of 87.2% of Muslim citizens, sharia insurance plays an important role. However, this presence of sharia insurance does not show significant growth compared to Malaysia. This study aims to determine whether efficiency may serve as an intermediary variable in linking market share and company size to the profitability of Islamic insurance in Indonesia. It employs secondary data to collect data by involving 11 sharia insurance companies with 4 years ranging from the year 2014 to 2017. The collected data were analyzed through Path analysis and Sobel test with the DEA VRS as an indicator of efficiency. In analyzing the collected data, the Path equation has passed the classic assumption test. The findings reveal that the market share and company size have respectively significant positive and negative influences on efficiency. It indicates that market share is a variable that shows a significant positive effect on profitability compared to the other two variables. Whereas, the results of Sobel tests show that efficiency cannot serve as an intermediary in this research model

The Influence Of Profitability And Structure Of Ownership On Company Value With Dividend Policy As An Intervening Variable

The established entity has the aim to increase the value of the company. the company's stock price can be a reference for valuing a company. This study aims to test and prove empirically the effect of profitability and ownership structure on firm value with dividend policy as an intervening variable. The research data is in the form of annual company report data listed on the Indonesia Stock Exchange from 2011 to 2016. Data analysis was performed using path analysis. The results showed that profitability and dividend policy had a significant positive effect on dividend policy, while the ownership structure had no effect on dividend policy. Profitability and dividend policy variables proved to have a significant effect on firm value, while ownership structure did not affect company value.

Pengaruh Struktur Modal, Capital Expenditure, Profitabilitas Dan Kebijakan Dividen Terhadap Nilai Perusahaan Pada Perusahaan BUMN Indonesia.

Some previous studies also show different results (research gap) about the factors that influence the value of the company. This study is to find out how the influence of capital structure, capital expenditure, profitability and dividend policy on corporate value in Indonesian BUMN companies partially and simultaneously. The population in this study is Indonesian BUMN companies that went public during 2015 - 2018 with selected samples based on purposive sampling criteria. The results of this study indicate that capital structure has no effect on the value of Indonesian BUMN companies in the 2015-2018 period, while capital expenditure and dividend policy have a positive effect on firm value and profitability has a negative effect on firm value. This indicates the existence of investment opportunities that attract new investors so they will get high returns.
 
 Keywords: BUMN companies, capital structure, capital expenditure, company value, dividend policy, profitability.

The Determinants of Profitability of Insurance Companies in Palestine

This study aimed to examine the factors that affect the profitability of insurance companies in Palestine. Unbalanced panel data was utilized from seven insurance companies operating in Palestine from 2006 to 2018 to estimate a linear model between determinants theoretically expected to affect performance and the profitability of insurance firms. Findings revealed that size, growth and liquidity significantly positively affect the insurance firm’s profitability while motor claims, on the other hand, have a significant negative effect on the insurance company’s profitability. Other factors including claims ratio and leverage ratio have no significant effect on profitability of insurance firms. The main implications of these results are that Palestinian insurance companies should diversify their insurance portfolio away from motor insurance and keep higher liquidity levels to enhance profitability. Further, some insurance companies are recommended to merge with other companies to increase size and to gain economies of scale.

Comparative Profitability Analysis and Policy Options for Sustaining Integrated Pest Management Practices on Cucumber (Cucumis sativus L.) Production

This study examined the comparative profitability of cucumber (Cucumis sativus L.) production between Integrated Pest Management (IPM) and non-Integrated Pest Management (non-IPM) farmers and tried to find out the policy recommendations for sustaining this practice in vegetable production. A total of 80 farmers (40 from each group) were purposively selected from Tangail district of Bangladesh through the interview schedule. To fulfill the objectives of this study, farmers’ attitude index, profitability and partial budget analysis were used. Hence, to know the complete picture of cucumber production using both IPM and non-IPM technology, the socioeconomic profile of farmers was examined and compared and found that IPM farmers were in better-off condition than that of non-IPM farmers. The result of the farmers’ attitude measured by Likert Scale showed that the majority of the farmers had a moderately favorable attitude towards IPM technology. According to the profitability analysis, the benefit-cost ratio of cucumber production was 1.9 for IPM farmers, while for non-IPM farmers, it was estimated at 1.6. It is evident from the partial budget analysis that per hectare net benefit was USD 1069.23 for cucumber production using IPM technology. Cucumber production was profitable for both IPM and non-IPM farmers, but IPM farmers were more beneficial than that of non-IPM. The researcher identified a weak socioeconomic profile of the farmers, inadequate training facilities, few NGOs participation and poor IPM disseminating staff and farmers’ ratio as the challenges of sustaining IPM technology in the study areas. Therefore, government attention needs to be increased on collaboration between different groups, including national and international organizations, social scientists and farmers for sustaining IPM practices.

Satisfaction Level of Health Insured and Financial Profitability of Health Insurance Companies from Health Insurance Product

The research is focused on finding whether the insurance companies are providing health insurance to their clients are enough to meet their expectations or the employees are bound to pay the premium for availing the employer-based health insurance. Another part of the study is focused on finding the financial profitability of health insurance companies particularly, from the health insurance product they are offering to their clients. The premium these companies charging are enough to generate the profitability of health insurance companies or there is not any significant impact on their profitability from this product. It is obvious that a sick employee would be less interested in his or her work and the ratio of absenteeism will increase. The main purpose is to evaluate if providing health insurance is a profitable activity for both sides. This research was conducted through primary data; the data has been collected with the help of adopted questionnaire and a sample size is of 70 respondents. It is found from the research that employees are moderately satisfied with employer-based insurance facility and there is not any significant difference between premium paid and utilized. So, insurance companies are earning less from health insurance product.

Determinants of profitability of life and non-life insurance companies: evidence from Ecuador

Purpose The purpose of this paper is is to identify the main determinants of insurance profitability on life and non-life segments to obtain which variables affect in each market of the Ecuadorian insurance sector. Design/methodology/approach The authors use a large panel data set with financial information from 2001 to 2017 and estimate the determinants through a panel corrected standard errors regression. Findings The authors found that net premiums, technical reserves, capital ratio and score efficiency are micro-determinants in the life insurance sector, whereas in the non-life sector, the micro-determinants include also claim level and liquidity ratio; moreover, the authors found that HHI is a determinant of profitability only in the life insurance. Among the macro determinants set, the authors found that the interest rate has also a significant impact both in the life and non-life insurance. Originality/value The authors analyze a dollarized emerging country, which is the first time in this kind of studies. The authors also include the structure-conduct-performance and relative market power paradigm as well as the ES hypothesis, calculated through the data envelopment analysis, as determinants of insurance profitability. Finally, this is the first research to examine the determinants of profitability in Latin American and Caribbean insurers.