Return On Assets Research Articles

Analysis of the Impact of the Covid-19 Pandemic on Financial Performance

This study aims to analyze financial performance during and after the covid-19 pandemic in information technology companies in ASEAN countries. Financial performance variables are proxied by profitability ratios using Return On Asset (ROA), liquidity ratios using Current Ratio (CR), activity ratios using Total Asset Turnover (TATO), and solvency ratios using Debt To Equity Ratio (DER). Using company financial data with a cross-country population in countries that are members of the ASEAN countries including Indonesia, Malaysia, Singapore, Philippines, and Thailand. The total number of samples used was 84 information technology companies. This research is a quantitative research with analysis method using Wilcoxon Signed Ranks Test comparative analysis. The results showed significant differences in Indonesia in CR and DER, and in Thailand in TATO. This study also shows from the five countries that Indonesia has the best financial performance because it experiences a significant average increase. compared to other countries that tend to experience an average decrease even though it is not significant. The decline can be seen in Malaysia and Thailand which experienced an average decline, while in Singapore and the Philippines although there was a decrease but there was also an increase.

The effect of political connections on the distribution of firm performance

Political connections have the potential to redistribute rents toward connected firms, and away from non-connected ones. In this paper, we show that this is indeed the case for Chinese listed firms during 2008–2015. Connected firms (as proxied by college ties between senior management and local leaders) have higher Return on Assets (ROA) and more government subsidies, while non-connected firms experience a significant decline in both ROA and subsidy when executive turnover or political rotation leads to the creation of connected firms in the city. The differential effects on non-connected firms within the same industry versus those in different industries suggest that non-connected firms outside the industry are more adversely affected due to leaders' attempts to mask favoritism with broad industrial policy.

The Impact Of Working Capital Management On Profitability In Micro And Small Processed Food Enterprises In Indonesia

Effective management of working capital is essential for the profitability and long-term sustainability of micro and small-scale processed food businesses. However, at present, the business has not yet developed strong competency in managing working capital efficiently. This can certainly increase the potential for business bankruptcy, especially in the processed food business. This research examines the impact of working capital management, liquidity, and solvency ratios on the profitability of 1,563 micro and 241 small processed food enterprises in Indonesia. Multiple linear regression is used to assess the relationship between working capital management and profitability. The independent variables include the payable deferral period, inventory conversion period, current ratio, and debt-to-asset ratio, while profitability, as the dependent variable, is measured by return on assets (ROA). The findings indicate that both the payable deferral period and debt-to-asset ratio significantly affect the profitability of micro and small businesses, with the current ratio having a particular effect on the profitability of small businesses. These findings suggest that improving financial management practices, such as daily sales optimization and enhanced cash flow monitoring, could significantly enhance profitability in the micro and small processed food sector.

ESG systems and financial performance in industries with significant environmental impact: a comprehensive analysis

Research background and significanceAs China's economy continues its rapid expansion, the issue of environmental degradation has escalated, particularly within industries with significant environmental impact, such as steel, chemical, pharmaceutical sectors. These sectors are confronted with profound environmental and social responsibility challenges. The development of robust Environmental, Social, and Governance (ESG) systems has therefore become essential for improving environmental performance, meeting social responsibilities, and optimizing corporate governance structures. This study investigates the impact of ESG system implementation on the financial performance of enterprises within these environmentally impactful industries, offering a scientific foundation and practical guidance for corporate leaders and policymakers to facilitate green transformation and sustainable development.Methods and dataThis research integrates empirical analysis with case studies, employing a dataset of 2,376 observations from 792 listed companies within industries with significant environmental impact, spanning the period from 2019 to 2021. The data, sourced from the Wind database, were analyzed using multiple regression techniques. The findings reveal a significant positive relationship between overall ESG scores and corporate performance, measured by Return on Equity (ROE) and Return on Assets (ROA). All three ESG dimensions—environmental (E), social (S), and governance (G)—exhibit positive impacts on corporate performance. Furthermore, factors such as company size and growth rate are positively correlated with performance, whereas leverage ratio is negatively correlated. To further substantiate the empirical findings, a case study of Hunan Valin Steel Co., Ltd. was conducted.Results and conclusionsThe findings of this study demonstrate that the implementation of ESG systems substantially enhances the financial performance of enterprises within industries characterized by significant environmental impacts. Specifically, investments in environmental protection led to greater resource utilization efficiency, social responsibility initiatives foster enhanced employee productivity and customer loyalty, and strong corporate governance improves management structures and decision-making processes. The case study of Hunan Valin Steel Co., Ltd. reinforces these results, illustrating that a comprehensive ESG framework not only helps such enterprises achieve their environmental and social responsibility objectives but also markedly improves their financial outcomes. This research provides robust empirical evidence and actionable management recommendations for ESG system implementation in environmentally impactful industries, along with scientific support for informed policymaking.

Indonesian Banking Financial Performance on Profitability Using Panel Data Regression

This study's goal is to determine if the return on assets (ROA) variable posted on the Indonesia Stock Exchange, together with the loan-to-deposit ratio (LDR), capital adequacy ratio (CAR), and non-performing loans (NPL), are correlated with profitability. The impact of return on assets (ROA) factors on the banking sector is investigated in this study. The research used a data sample of 245 from 49 financial institutions that have continuously fulfilled the necessary data requirements for a minimum of five years. Panel data, testing of panel data, testing of classical assumptions, and multiple regression analysis employing econometric views (E-views 12) are among the chosen analytical techniques. The ROA variable is unaffected by the LDR variable's t-test findings. In a similar vein, the ROA variable is unaffected by the t-test findings for the CAR variable. Moreover, the ROA variable is unaffected by the NPL variable's t-test findings. Nonetheless, the ROA variable is concurrently impacted by the LDR, CAR, and NPL factors.

The Impact of Value-Added Intellectual Capital on Corporate Performance: Cross-Sector Evidence

This study explores the relationship between intellectual capital (IC) and the financial performance of 250 publicly traded companies in France, Germany, and Switzerland from 2009 to 2018, addressing the gaps in prior research regarding the differential impacts of IC components across countries and industries in Western and Central Europe. Using the Value-Added Intellectual Coefficient (VAIC™) approach, this study evaluates human capital efficiency (HCE), structural capital efficiency (SCE), and capital employed efficiency (CEE). Panel regression analyses at the country and industry levels were conducted to assess their effects on financial metrics, such as return on equity (ROE), return on assets (ROA), and asset turnover ratio (ATO). The findings reveal a significant positive association between SCE, CEE, and firm performance, with CEE showing the most substantial effect, while HCE had a relatively weaker impact. Additionally, the study uncovers a trade-off between the accumulation of patents and trademarks and short-term financial performance, raising new considerations for intellectual property management. This research contributes to the literature by providing a nuanced understanding of how IC components influence financial outcomes across different contexts and offers practical insights for firms aiming to optimize structural capital and capital-employed strategies for improved financial performance while acknowledging the limitations regarding the sample of publicly traded firms.

Borsa İstanbul’da faaliyet gösteren perakende firmalarının pazarlama harcamalarının firma performansı üzerindeki etkileri

This study aims to find the factors that affect the sales revenues and asset profitability of companies operating in the retail sector. The study consists of retail companies listed on Borsa Istanbul, covering the quarter periods between 2015/3 and 2022/9. In the sample, as of 2022, 14 companies are traded in the retail sector on the stock exchange. Since the data of 6 companies among these companies could not be accessed, they could not even be analysed, and analyses were made on the panel data created with eight companies whose data had the desired characteristics. Regression and correlation tests were performed in the analyses. The panel data obtained from the sample were analysed using Stata 13.0 and EViews 9 package programs. According to the results of the analysis, it has been determined that marketing, sales, and distribution expenses impact sales revenues, while general administrative expenses and advertising expenses impact return on assets (ROA).

Exploring Trends in Financial Performance Metrics: An In-Depth Study of Nepalese Banks Over the Past Decade

This study investigates the trends in Return on Assets (ROA) and Return on Equity (ROE) within Nepalese banks over the past decade, while also assessing the growth of banking infrastructure, including branches, ATMs, and card usage. Utilizing a descriptive and correlational research design, secondary data spanning from fiscal years 2070/71 to 2079/80 was analyzed, drawing on monthly records from 20 commercial banks to yield 2,400 observations. Data was collected from annual reports, the Nepal Rastra Bank, the Central Bureau of Statistics, and economic surveys. Results revealed a significant initial rise in both ROA and ROE, indicating robust profitability, followed by notable declines that suggest underlying structural weaknesses in the banking sector. The expansion of banking infrastructure was substantial, with a marked increase in branches and ATMs between 2074 and 2075, positively correlating with financial performance indicators such as total deposits and loans. The study concludes that enhancing banking infrastructure is crucial for improving financial stability and performance in Nepal's banking sector. The findings highlight the interconnectedness of physical banking presence and financial health, emphasizing the need for strategic reforms. The novelty of this research lies in its comprehensive analysis of the relationships between banking metrics and financial outcomes in the Nepalese context, providing valuable insights for policymakers and financial institutions aiming to navigate current challenges and foster sustainable growth.

Determinants of Income Smoothing Practices in Light of the Recent Pandemic: Evidence from Banks in MEA Region

This study examined the effects of the recent COVID-19 pandemic on income smoothing practices in the banking sector of Middle Eastern and African (MEA) countries. It examined how global geopolitical risk (GPR) and the bank's internal indicators influenced these practices. Focusing on 175 banks across the MEA region with data spanning from 2018 to 2021. This study employed several econometric approaches, i.e., GMM, 2SLS, MMQR and QRPD, to provide robust estimations. The study's scientific novelty is in its thorough analysis of how COVID-19 stringency and global geopolitical uncertainties uniquely impact income smoothing practices, utilising advanced econometric techniques to capture nuances across different regions. The findings revealed that income smoothness has increased in response to stringent COVID-19 measures such as lockdowns and movement controls, with consistent results across various methods. Additionally, the higher global GPR is associated with increased income smoothness. The study also identified varying impacts of bank-specific factors: bank size, and capital adequacy ratio (CAR), generally show positive effects, while return on assets (ROA), cost-to-income ratio (CI), leverage (LEV), and liquidity (LIQ) often have negative impacts, with some variables displaying minimal significance in different quantiles. Practically, the study offers valuable insights for policymakers and banking sector professionals by highlighting how heightened COVID-19 stringency and geopolitical risks influence income smoothness. This can aid in the development of strategies to manage financial stability and adapt to future economic shocks.

SUSTAINABILITY DISCLOSURES AND PROFITABILITY OF LISTED OIL AND GAS FIRMS IN NIGERIA

This study examined the effect of pillars of sustainability disclosure on profitability (return on asset) of oil and gas firms in Nigeria. The specific objectives of the study were: to examine the effect of social, economic and environmental pillars of sustainability disclosures on return on assets of Oil and Gas firms in Nigeria. The population of the study was made up of all the manufacturing Oil & Gas firms listed in Nigerian Exchange Group, while Con-oil, Forte Oil, Capital Oil, Total Nigeria and MRS oil Nigeria were selected. The statistical tool used was multiple regression analysis, and the findings revealed that social, economic and environmental pillars of sustainability disclosures have no significant effect on Return on Assets (ROA) of Oil and Gas firms in Nigeria. The study recommended that Oil & Gas manufacturing firms should ensure that they report their social, economic and environmental activities in order to enhance their performance level and compete favorably in Oil sector. This will also enable all the stakeholders appreciate firms’ annual report and put reliance on the published financial statements in their investment decisions. When a firm enjoys legitimacy, the performance of the organization will be improved significantly. The study also recommended that there should be standardized Sustainability Index for ranking firms’ reportage in order for the firms to adhere strictly to voluntary and mandatory disclosures.

Pengaruh Rasio Keuangan dan Corporate Governance terhadap Kinerja Perbankan di Indonesia Periode 2020-2023

This research aims to prove the influence of financial ratios and corporate governance on banking performance in Indonesia for the 2020-2023 period. The research was conducted using secondary data in the form of bank financial reports listed on the Indonesia Stock Exchange (BEI) for the 2020-2023 period. The multiple linear regression method was used to analyze the data. The independent variables analyzed are non-performing loans (NPL), loan to deposit ratio (LDR), return on assets (ROA), net interest margin (NIM), capital adequacy ratio (CAR), independent commissioner, and ownership concentration. The dependent variable is Tobin's Q with firm size as a control variable. The research results show that LDR and ROA have a significant positive effect on Tobin's Q, while NIM has a significant negative effect on Tobin's Q. The results also state that NPL, CAR, independent commissioners, ownership concentration and firm size have no effect on Tobin's Q.

Analyzing the Impact of Cost of Funds and Non-Performing Loans on Bank Profitability

The research was conducted to see how cost of funds (COC), and non-performing loans (NPL) on profitability is measured by return on assets (ROA). The research method used is descriptive and verification methods. Secondary data is sourced from Regional Development Banks of West Java and Banten Provinces in Indonesia quarterly financial reports for 2014 – 2022, while the data analysis technique uses multiple linear regression analysis. The results of the research are that COF and NPL has a negative and significant effect on ROA. Simultaneously, COF and NPL have a significant effect on ROA. The results of this research are useful for bank management in determining funding strategies with low cost of funds, and credit management strategies so that non-performing remains healthy.

Pengaruh Corporate Social Responsibility (CSR) Terhadap Kinerja Keuangan Pada Perusahaan Sektor Infrastruktur Yang Terdaftar Di Bursa Efek Indonesia Tahun 2020-2022

This study aims to examine the influence of company size and asset structure on capital structure in food and beverage This research is a quantitative research with the type of data source being secondary data obtained from the company's financial statements and annual reports. The analysis method used is multiple linear regression using SPSS version 26 software. Data testing was carried out using descriptive statistical analysis, classical assumption test, simple linear regression analysis test, determination coefficient and t-test. The independent variable used in this study is Corporate Social Responsibility (CSR) while the dependent variable is financial performance proxied by Return On Asset (ROA). The results of the study show that Corporate Social Responsibility (CSR) has a positive and significant effect on financial performance. In addition, based on the determination coefficient (R2) test, Corporate Social Responsibility (CSR) was able to explain its influence on financial performance by 12.2% of the dependent variables. Based on the results of the study, it was concluded that financial performance measured using the return on asset ratio had a positive and significant effect on Corporate Social Responsibility (CSR). Suggestions that can be given for future research are to add variables that are not included in this study that are considered to affect Corporate Social Responsibility (CSR) and increase the research period to get accurate results.

Impact of The Corporate Governance on Sustainability Report Disclosure with Environmental Performance as A Moderation Variable in Indonesia

This study aims to analyze the effect of corporate governance on sustainability report disclosure, with environmental performance acting as a moderating variable. The analysis focuses on the role of the board of directors, independent commissioners, audit committees, and financial performance in influencing the quality of sustainability reporting, particularly within the Indonesian context. Environmental performance is measured using the PROPER scale. The study utilizes data from the annual and sustainability reports of 20 companies in the basic materials and energy mining sectors listed on the Indonesia Stock Exchange from 2018 to 2022, amounting to 100 observations. The data is processed using SPSS 23. The results show that the presence of female directors significantly enhances the quality of sustainability disclosures, as they tend to prioritize social responsibility. Moreover, financial performance, as measured by Return on Assets (ROA), positively affects sustainability reporting, with companies in better financial health being more transparent in their disclosures. Environmental performance, when combined with strong independent oversight, further improves reporting quality, reflecting the positive influence of independent commissioners and sound financial governance. The study concludes that environmental performance, as measured by the PROPER scale, plays a significant role in improving sustainability disclosures in Indonesia. It recommends that the Indonesian government provide stronger support and clearer regulations to help companies improve their sustainability practices and contribute to the G20 agenda.

Board Size and Corporate Performance in the Industrial Property Sector in Malaysia

This research investigates the relationship between the size of the board of directors and the financial performance of publicly listed industrial property firms in Malaysia. The study examines secondary data from annual reports, financial statements, and corporate governance disclosures, focusing on key financial performance indicators such as Return on Assets (ROA), Return on Equity (ROE), and Net Profit Margin (NPM). The study reveals significant correlations between board size and financial performance using correlation analysis and multiple regression. The findings provide valuable insights for regulators, investors, and business leaders, emphasizing the importance of refining corporate governance standards to ensure long-term financial success in Malaysia's industrial property sector.

Analyzing the Financial Performance of Manufacturing Firms: A Focus on Return on Equity, Return on Assets and Return on Sales

The research aims to delve into the financial performance of manufacturing firms, with a specific focus on key financial indicators such as Return on Equity (ROE), Return on Assets (ROA), and Return on Sales (ROS). These indicators are commonly used to assess a company's profitability, efficiency, and overall financial health. The study involved the analysis of the financial statements of selected manufacturing firms to compare and evaluate their performance based on these metrics. Return on Equity (ROE) measures a company's profitability relative to the equity of its shareholders. Return on Assets (ROA) indicates how efficiently a company is using its assets to generate earnings. Return on Sales (ROS) measures a company's ability to generate profits from its revenue. The research aims to provide valuable insights into the financial health and efficiency of manufacturing companies. The findings may have implications for various stakeholders, including investors, industry practitioners, and the companies themselves. Investors can use the insights to make informed decisions about their investment choices, while industry practitioners can gain valuable knowledge about improving financial performance. Additionally, Rwandan companies themselves can use the findings to identify areas for potential improvement in their financial management and operations.

Pengaruh Struktur Kepemilikan, Leverage dan Return On Asset (ROA) Terhadap Kebijakan Dividen pada Perusahaan Manufaktur Yang Terdaftar Dibursa Efek Indonesia Tahun 2021-2023

This research aims to analyze the influence of liquidity, ownership structure, leverage, and Return On Assets (ROA) on dividend policy in companies on the Indonesia Stock Exchange (BEI) for the 2021-2023 period. Dividend policy is an important decision for a company in determining the allocation of profits that will be distributed to shareholders and those that will be retained for investment purposes. Liquidity reflects a company's ability to meet short-term obligations, while ownership structure highlights the role of shareholders and managers in decision making. Leverage, which indicates the use of debt in financing, and ROA, as an indicator of profitability, are also considered important factors influencing dividend policy. This research differs from previous research with the addition of leverage variables as well as differences in population, sample and research period. It is hoped that the results of this research will provide a more comprehensive understanding of the factors that influence dividend policy and its implications for company value.

KEMAMPUAN RASIO KEUANGAN DALAM MEMPREDIKSI PERTUMBUHAN LABA PADA PERUSAHAAN PERBANKAN YANG TERDAFTAR DI BURSA EFEK INDONESIA TAHUN 2012-2017

The research aims to: (1) test and prove the ability of the Capital Adequacy Ratio (CAR), Loan to Deposit Ratio (LDR), Non-Performing Loan (NPL), capability Operations on operating income (BOPO), Net Interest Margin (NIM), Return On Asset (ROA) and Return On Equity (ROE) in predicting profit growth Registered Banking Company in IDX. A research sample is a banking company listed on the Indonesia Stock Exchange. Data analysis methods use multiple linear regression analyses. From the research results are known that: (1) Capital Adequacy Ratio (CAR) is not able to predict the profit growth of registered banking companies in IDX: (2) Loan to Deposit Ratio (LDR) is not able to predict the profit growth of the banking company Registered in the IDX: (3) Non-Performing Loan (NPL) is not able to predict the profit growth of registered banking companies in IDX: (4) operating expenses on operating income (BOPO) is not able to predict the profit growth of the banking company Registered in IDX: (5) Net Interest Margin (NIM) is not able to predict the profit growth of registered banking companies in IDX: (7) Return On Equity (ROE) is able to predict the profit growth of the IDX-registered banking company

Moderating effect of bank performance on bank value: Evidence from Jordan

The relationship between bank performance and bank value is a crucial area of study, particularly in the context of emerging economies like Jordan. This study aims to investigate the moderating effect of bank performance on bank value, providing insight into how performance metrics influence overall valuation. The study employs a comprehensive methodological approach, utilizing panel data regression analysis to examine data from a sample of Jordanian banks over the period from 2014 to 2022. Key performance indicators such as Tobin’s Q, accounting conservatism, debt ratio, current ratio (CR), return on assets (ROA), and asset turnover are factors that influence bank value in the Jordanian market. The results reveal that bank performance significantly moderates the relationship between bank-specific factors and bank value. Specifically, the study finds that return on assets has a positive and statistically significant effect on bank value. The analysis reveals a significant positive correlation between bank value and profitability, as evidenced by a moderate positive correlation coefficient (0.26) between Tobin’s Q and ROA. However, weak or non-significant correlations are observed between bank value and accounting conservatism, debt ratio, and asset turnover.

Banking on ESG: How ownership influences financial outcomes in 5-ASEAN countries

This study investigates the effect of Environmental, Social, and Governance (ESG) scores on bank performance in five Association of Southeast Asian Nations (ASEAN) countries: Indonesia, Malaysia, Singapore, Thailand, and the Philippines. This study aims to examine the effect of ESG scores on bank financial performance and investigate whether the influence of bank ownership can strengthen both. This study uses a sample of 26 banks in 5-ASEAN countries during 2016–2021. This amount is the result of data sorting conducted on 86 banks by adjusting to the research sample criteria. Using multiple linear regression analysis, this study shows that ESG scores have a significant positive effect on bank financial performance as measured by Return on Assets (ROA), Return on Equity (ROE), and Price to Book Value (PBV). Furthermore, this study found that the positive impact of ESG scores on bank performance is stronger for state-owned banks compared to private banks. However, bank ownership does not affect the relationship between ESG scores and ROA. These findings suggest that law enforcement by the government through regulators plays an important role in encouraging banks to view ESG as a driving value to improve their performance.