Short-term Debt Research Articles

What Firm-Specific and Macroeconomic Determinants of Financial Structure Affect Transport and Storage Companies from Selected European Countries?

A number of indicators can be assessed for a company’s financial health, with indebtedness indicators being one of the important ones. The formation of the financial structure is influenced by a huge number of factors. The subject of this research is the indebtedness of companies in the Transportation and storage industry. The companies come from the V4 countries, Austria, Bulgaria, Slovenia, and Romania, between 2010 and 2018. In total 25,246 companies are analysed according to their size for medium and large companies. The aim of the research is to find out whether profitability, liquidity, asset structure, non-debt tax shield, GDP growth rate, reference interest rate, and inflation rate affect the level of total, long-term and short-term debt. The main finding is that corporate debt is significantly affected (measured by the value of coefficients) by non-corporate determinants and specifically the development of the reference interest rate. However, if we look at the most numerous determinants, it is profitability. Companies in the selected industry should focus primarily on the various forecasts within the external environment of the company and include them in their analyses when financing their activities.

Corporate Liquidity Risk: A Case Study on the Evergrande Group in China

Purpose - Given that China Evergrande Group has recently been caught in a liquidity risk, the purpose of this study is to identify and assess its liquidity using traditional financial indexes. We analyze the reasons for the liquidity risk exposures, so as to provide practical implications for real estate companies. Design/Methodology/Approach - This study combines the principal-agent and the trade-off theories in order to analyze China Evergrande Group’s exposure to liquidity risk under the leverage effect. In addition, China Evergrande Group’s financial position is analyzed in depth, and its liquidity risk is defined and identified. Findings - The results show that under the high leverage effect, the company suffers from a high liquidity risk, and eventually falls into a financial crisis due to the shortage of cash for short-term debt accumulated in previous periods, and the long delay in returns on property sales. Research Implications - This study provides a new perspective for debt research by examining the leverage and liquidity risk of real estate-related enterprises. During the golden era of the real estate industry, real estate enterprises should uphold the principle of moderation in debt management, make reasonable use of financial leverage, clarify the strategic goal of diversification, and avoid credit risk.

Analisis Rasio Keuangan Terhadap Kinerja Keuangan PT Waskita Beton Precast Tbk Periode 2017-2021

Financial performance in the company is needed because it is to find out the goals that have been achieved and evaluate the level of success of the company. Financial performance appraisal is a way to meet the needs of users of financial statements in achieving the targets that have been set which are used in making management decisions related to the effectiveness of the use of equity and the efficiency of company activities. This study analyzes the financial ratios on the financial performance of the company PT Waskiton Beton Precast Tbk for the 2017-2021 period and is analyzed by SPSS 25. The sample used in this study is data from the financial statements of the company PT Waskita Beton Precast Tbk published in the last 5 years from 2017 to 2021 with 50 data. This study uses a regression model equation analysis tool. The results showed that (1) the solvency ratio, activity ratio, profitability ratio to financial performance partially had a positive and significant impact. (2) the liquidity ratio to financial performance partially does not have a significant impact, because financial performance is not always influenced by the good or the negative value of liquidity. Although the company's ability to pay its short-term debt increases, it does not mean that investors will respond well.

Capital Structure and Financial Performance of Manufacturing Companies in Nigeria

This empirical research aimed at establishing the effect of capital mix on the financial performance of ten chosen manufacturing firms among companies listed on the Nigerian Exchange (NGX) for twelve years period, 2009 to 2020. Secondary data were extracted from the audited accounts and reports of the chosen firms. This research employed descriptive and inferential statistical analyses for data estimation. The results of this work reveal that debt in relation to equity (DER) has insignificant adverse effect on return on asset (ROA) of the selected firms. Contrarily, DER has a direct significant effect on return on equity (ROE) and a direct insignificant effect on the net profit margin (NPM) of the sampled manufacturing companies. Total debt to total assets (TDTA) has positive but insignificant effect on all the financial performance indicators. The study also found that short-term debt to total assets (SDTA) and long-term debt to total assets (LDTA) have negative negligble effect on all the dependent variables. The outcomes of the study imply that the management of these companies need to always be guided appropriately in their capital mix decisions in order to optimize their financial performance. Therefore, the main thrust of this study is that optimal capital structure is essential for the profitability of manufacturing companies in Nigeria.

The relationship between external debt and growth under the structural breaks in Turkey

This study aims to investigate whether Turkey's external debt (by considering the debt maturity and ownership separately) has a relationship with economic growth and to explain the direction and size of these effects in case of their existence. At the same time, the relationship between consumption and investment, which are sub-items of growth, and external debt are also discussed. The data subject to the analysis in the study consists of gross domestic product and external debt data provided by the Central Bank of the Republic of Turkey Electronic Data Distribution System and covering the 1998Q1 and 2021Q4 periods. In this study, econometric methods, including both conventional and structural breaks, were used. According to the results, both short-term and long-term external debt significantly and positively affect gross domestic product, consumption and investment. In addition to this situation, it is seen that the effect of long-term external debts is more. However, it is also concluded that the effect of long-term external debt is greater. When evaluated separately on a sectoral basis, it is concluded that the significant and positive relationship between public sector external debt and economic growth and its sub-items is valid both in the short and long term. When the effect of external debt on investments is analyzed, it is seen that the effect of long-term external debt is more than short-term debt. The most important point to note here is that short-term private sector debt, which does not affect gross domestic product and consumption, has a significant effect on investment and is about three times the public sector short-term debt.

Pengaruh leverage, debt maturity, ukuran perusahaan, dan usia perusahaan terhadap kinerja perusahaan

The purpose of this study is to analyze the effect of Debt to Asset Ratio, Short Term Debt, company size, and company age on company performance. This study uses multiple linear regression analysis in its testing. In this study, there were 32 companies that met the criteria from a total observation of 45 companies with research objects in LQ45 companies listed on the Indonesia Stock Exchange (IDX) for the 2019-2021 period. The Debt to Asset Ratio variable has a negative effect on company performance. Short Term Debt variable has a negative effect on company performance. Company size and company age variables have a positive effect on company performance. This research can also be taken into consideration for investors to be more careful in interpreting publications by companies in terms of making decisions with investment decisions, especially so that they can ensure that the investments they make in companies will bring benefits in the future. Companies should analyze aspects that can affect company performance so that they can be improved in order to encourage companies to be better with good company performance.

Fraud Risk Analysis Fraud Prevention Detection with Fraud Triangle and Financial Ratios at PT. Garuda Indonesia (Persero) Tbk.

This study aims to detect the risk of fraud in the financial statements and ongoing fraud prevention measures if there are irregularities in the financial statements. The issue of earnings management in the financial statements of PT Garuda Indonesia (Persero) Tbk by significantly increasing profits has raised a lot of suspicion and greatly harmed many parties, especially investors who invested in this company. The analysis was carried out using the fraud triangle variable and by asking for opinions from experts in their respective fields or professions related to fraud, such as auditors, accounting staff and employees who assist in the presentation of financial statements. The sample included 30 respondents. The calculation of financial ratios was done by calculating the ratio of liquidity, profitability, and solvency to detect fraud risk. The results of the analysis of fraud detection during the 2017-2019 period showed that there was an indication of markups on the company’s capital and profits in 2019. During those three years there was a decline in the company’s performance including its effectiveness in paying its short-term debt. This is in line with the opinion of auditors and users of financial statements who have predicted fraud and profit markups in the financial statements.

Determinants Capital Structure of Small and Medium Enterprises in Indonesia

This research aims to analyze the determinants of capital structure. The independent variables in this study are corporate taxes, company size, tangible assets, corporate risk, profitability, non-debt tax protection, and liquidity. While the dependent variable is short-term debt, long-term debt, and total debt. The sample of this study uses 61 Small and Medium Enterprises companies listed on the Pefindo Index for the period of 2019-2021. The sampling technique uses purposive sampling and the analysis method uses panel data regression. The results explained that corporate taxes, tangible assets, and non-debt tax shields do not affect capital structure. Company size does not affect short-term debt and total debt. However, it has a significant negative effect on long-term debt. Company risk and liquidity significantly negatively affect short-term debt and total debt. However, it does not affect long-term debt. Profitability has a significant positive effect on short-term debt and a significant negative effect on long-term debt. The implication of the research that has been done is to provide direction for financial managers regarding the optimal use of capital structure to achieve the company's goal of increasing the welfare of shareholders. As for investors, investors should choose companies that have high company size, low risk, and high liquidity.

Analysis of financial performance determinants: evidence from Slovak agricultural companies

Purpose. The purpose of the present study is to examine the determinants of the financial performance of the Slovak agricultural companies.
 Methodology / approach. Bibliometric analysis was applied to analyze the literature, the results of the review were visualized using VOSviewer software. Panel data regression analysis, which was carried out using the GRETL software, was chosen to be the main research method for analyzing the influence of determinants on financial performance measures. 527 Slovak agricultural companies’ activity over the period 2015–2019 was chosen as the object of the study. The analysis is carried out based on the publicly available financial information (financial statements, management reports, official company websites) and information available in the “FinStat” database. Regression analysis was performed according to four developed models based on the use of four different dependent variables (Return on Assets (ROA), Net Profit Margin (NPM), Return on Equity (ROE), Return on Sales (ROS)) and 10 independent variables same for all the models (Leverage, Long-Term Debt to Assets, Short-Term Debt to Assets, Debt to Equity, Capital intensity, Tangibility of Assets, Current Ratio, Size, Dummy variable for type of ownership, Dummy variable for legal form). Fixed Effects Method was chosen as an estimate panel data parameter on the base of F-statistics test, Breusch-Pagan test, and Hausman test use.
 Results. The obtained results confirm the hypothesis about the existence of a distinctive impact of financial performance determinants due to the availability of the specific environment and features typical for the Slovak agricultural sector. None of the independent variables applied has a significant effect simultaneously on Models 1–4. We observed a negative significant impact at the 1 % level of l_Size on ROA and ROE of the Slovak agricultural companies. CapInt also has a negative significant impact on NPM and ROE. DtoE is found to have a positive impact on ROE. The complete lack of influence of AsTang in determining financial performance was revealed. The used dummy variables (DVTO, DVLF) were excluded from the composition of Models 1–4 during the regression analysis due to the availability of exact collinearity.
 Originality / scientific novelty. The uniqueness of the present study is that we identify the impact of the financial performance determinants specifically for the Slovak agricultural companies considering the specifics of the Slovak agricultural market in the context of the current problems in the sector of the economy being investigated.
 Practical value / implications. The obtained results can be used to improve the management decisions of the Slovak agricultural companies, to critically evaluate the state policy in the agricultural sector in the Slovak Republic, as well as clarify the recommendations given by various institutions to improve this sector of the economy.

Changes in Starbucks Business Model Based on 2008 and 2020

This paper mainly analyzed the business model and strategy transformation made by Starbucks in two key years, namely the financial crisis in 2008 and the sudden outbreak of the epidemic in 2020. The main objective of this paper was to understand and analyze the decisions made by Starbucks in terms of financial performance, strategy and business model during these two special years, to bring better inspiration and corresponding strategies to other multinational enterprises. This paper first investigated and analyzed past articles in related fields, and then conducted a financial ratio analysis on their financial statements between 2007 and 2021. Finally, it concluded that based on the analysis of Starbucks, other multinational enterprises should learn from its strengths and avoid risks. First of all, other multinational companies could actively expand their market shares, but not blindly. Secondly, relative services should be provided according to the demands of customer groups. Thirdly, we should analyze the current economic development in time to choose between long-term and short-term debt. In addition, employee benefits and incentives were also one key factor for Starbucks to become a successful multinational enterprise.

Influence of Capital structure on Firm Performance: Empirical Evidence from Indian Manufacturing Industry

The study is an attempt to examine empirically the impact of capital structure on firm performance using a data sample of 56 Indian manufacturing firms listed on Bombay Stock Exchange, National Stock Exchange or both during 2010-2022. The study uses three financial performance measures namely return on assets, return on capital employed and earnings per share as dependent variables. The eight capital structure measures such as long-term debt, short-term debt, interest coverage ratio, current ratio, growth, tangibility, non debt tax shield and size are used as independent variables. The data are divided into three sectors including steel, cement and automobile. The correlation analysis and multiple regression analysis are used in the study to estimate the impact of capital structure on firm performance. The empirical result shows that firm performance has a negative relationship with short and long term debt in most of the studied sectors. In the automotive sector, long-term debt is positively related to return on capital employed. Liquidity is negatively related to firm performance in the cement and automotive industries. Non-debt tax shield is positively related to firm performance as measured by return on capital employed and earnings per share in the cement and automotive industries, respectively, while interest coverage ratio is positively correlated with firm performance in the cement industry.

VULNERABILITY TO THE CURRENCY CRISIS: THE CASE OF SERBIA

The aim of this paper is to assess the external liquidity and currency stability of the Serbian economy. For this purpose, the following indicators were used: coverage of short-term external debt by foreign exchange reserves, coverage of imports by foreign exchange reserves and the exchange market pressure (EMP) index of the Republic of Serbia. Global events such as the coronavirus pandemic and the crisis in Ukraine have also affected the national financial market, so it is important to investigate this impact and compare it with the previous crisis of 2008-2009. The research shows that the Republic of Serbia has an optimal level of foreign exchange reserves in order to preserve the stability of the exchange rate and finance the balance of payments deficit, as well as a relatively low degree of vulnerability to the currency crisis. Based on that, it can be assessed that the monetary policy was conducted adequately in the previous period of the health crisis. However, some caution is needed due to the growing value of the EMP index as a result of increased demand for foreign exchange due to market panic, global uncertainty and the current geopolitical situation.

Capital structure and earnings management: evidence from Pakistan

PurposeThe purpose of this study is to investigate whether capital structure affects accruals and real earnings management (AEM and REM) of nonfinancial firms listed on Pakistan Stock Exchange (PSX). Moreover, to investigate whether institutional development (ID) moderates the relation between capital structure and earnings management (EM).Design/methodology/approachData were taken from annual reports of nonfinancial firms listed on the PSX during 2012–2019. Data of 150 firms for a period of eight years were found completed with respect to the variables used in this study. The generalized moments of methods estimator is used to estimate the effects of explanatory variables on earning management. Furthermore, fixed and random effects methods were used to estimate the impact of capital structure on AEM and REM.FindingsResults show that all three measures of capital structure (i.e. total debt ratio, long-term debt ratio and short-term debt ratios) are inversely related to AEM. In contrast, all measures of capital structure are positively related to abnormal cash flow from operations. Total debt ratio and long-term debt ratio are negatively while short-term debt ratio is positively related to abnormal discretionary expenses. Total debt ratio and short-term debt ratio are significant and negatively related to abnormal production cost. Additionally, interaction terms of ID (i.e. rule of law and regulatory quality) significantly moderate the controlling role of debt on discretionary accruals. In sum, results show that the use of debt induces lender's monitoring. Consequently, managers move toward REM because of lower probability of being exposed.Practical implicationsFindings of this study have significant implications for managers and regulatory authorities. For instance, the use of debt increases the lender’s influence which restricts the managers to be involved in EM practices. Moreover, regulatory authorities are required to address the loopholes in regulations to refrain the managers to be engaged in EM.Originality/valueTo the best of the authors’ knowledge, this is the first study in Pakistan that has explored the impact of capital structure on AEM and REM. More importantly, a careful review of the literature affirms that this study is among the few studies that have used ID as a moderating variable to explain the relation between capital structure and EM.

Effect of Financing Decisions on Financial Performance of Small and Medium Enterprises in Nairobi City County, Kenya

Small and medium enterprises play a role in contributing to the development of the economy through job creation, poverty eradication, wealth creation as well as the creation of new businesses. However, SMEs have significantly high incidences of illiquidity and lack of credit access. Over the last two decades, alternative sources of SME financing have emerged and include equity, short-term debt, long-term debt, and internal financing. Nonetheless, despite the availability of these sources of financing, SMEs in Kenya are still experiencing poor financial performance. This study, therefore, sought to investigate the influence of financing decisions on the financial performance of SMEs in Nairobi City County, Kenya. The study sought to determine the influence of equity financing, short-term debt, long-term debt, and internal financing on the financial performance of small and medium enterprises in Nairobi City County. The study sought to determine the moderating effect of firm characteristics on the relationship between financing decisions and the financial performance of small and medium enterprises in Nairobi City County. An explanatory research design was used in this study. The unit of analysis was the top 100 small and medium enterprises in Nairobi City County. Stratified random sampling was used in the selection of 80 SMEs from the target population. This study used secondary panel data, which was collected by the use of a data extraction tool. Analysis of quantitative data was done by the use of inferential and descriptive statistics with the help of statistical software known as Stata version 14. This was followed by inferential statistics which included multivariate regression analysis. The results were presented in figures (bar charts and pie charts) and tables. The study found that equity financing has a positive and significant influence on the financial performance of SMEs in Nairobi City County. The study also established that short-term debt has a positive and significant influence on the financial performance of SMEs in Nairobi City County. In addition, the study established that long-term debt has a positive and significant effect on the financial performance of SMEs in Nairobi City County. Also, the study revealed that internal financing has a positive and significant effect on the financial performance of SMEs in Nairobi City County. The study recommends that the management of small and medium enterprises should make use of equity financing whenever they want to explain their businesses and when they are financing different projects including product development and internal business process improvement. Also, the management of small and medium enterprises should obtain loans from banks, Sacco’s, and microfinance institutions to finance their operations. Moreover, the study recommends that the SMEs in Nairobi City County should avoid obtaining short term loan since these loans have high interest which requires to be paid for a brief period of time and hence may negatively affect the financial performance of the SMES. The study recommends that the management of small and medium enterprises should seek to increase the total assets of their organization so as to enable them to obtain loans from financial institutions to grow their business and improve financial performance.

CEO personality traits and debt contracting: Evidence from pilot CEOs

Using pilot certificates as a proxy for the personality trait of sensation seeking, which captures the desire for varied, novel, and complex personal sensations and experiences, we find that firms with pilot CEOs use longer-maturity debt financing even when it is more costly than shorter-term debt. Our findings are robust to controlling for potential endogenous matching between firms and CEOs. Our evidence indicates that CEOs with sensation-seeking personality traits prefer long-term debt financing to avoid the liquidity risk associated with short-term debt financing that may hamper other corporate activities motivated by their sensation seeking.

Component Analysis of Capital Structure, Sales Growth and Profitability in Manufacturing Companies Listed on The Indonesia Stock Exchange 2019 and 2020

The implementation of policies caused by the Covid-19 pandemic also affects the performance of manufacturing companies, this is due to the decline in economic activity in the community and social activities by closing public facilities. The purpose of this study was to analyze the differences in the components of capital structure, sales growth and profitability of manufacturing companies listed on the Indonesia Stock Exchange before and during the Covid-19 pandemic. This research is quantitative research with survey method. The data used is secondary data, in the form of data taken from audited financial statements of manufacturing companies listed on the Indonesia Stock Exchange (IDX) in 2019 and 2020. Data collection uses documentation techniques with pooled data type. The data needed is in the form of short-term debt (current debt), long-term debt, total debt, equity, sales and net income after interest and taxes. Data analysis includes descriptive statistical test, normality test using the Kolmogorov-Smirnov method, homogeneity test using the Anova Levene Statistic method and hypothesis testing using the Wilcoxon test. The results showed that there were no significant differences in the components of the capital structure including Short Debt to Equity Ratio (SDE), Long-term Debt to Equity Ratio (LDE) and Total Debt to Equity Ratio (TDE). Meanwhile, sales growth and profitability have significant differences from before Covid-19 and after Covid-19.

A Case Study of Investor R&D Evaluation using Game Theory

This paper aims to identify an optimal investment strategy in cases of high-intensity R&D private micro entities. A game theory matrix is constructed using publicly available empirical data extracted from the financial statements of an R&D-intensive private micro-entity. The game theory matrix attempts to estimate the effect of the discretionary managerial choice to capitalise or expense the development cost of internally generated intangible assets; investors' risk appetite could be affected by the capitalisation signalling. The investment strategies are classified based on their risk into three categories. High risk is represented by equity. Medium risk is represented by long-term debt, and low risk is represented by short-term debt. The game theory matrix results indicate that in similar situations, the dominant strategy is the medium-risk approach through long-term debt. This strategy must be confirmed by solving more game theory matrices based on similar R&D-intensive firms. However, it is an easily constructed advisory indicator for retail investors considering investing in unaudited small private entities. They could use it to identify an optimal investment strategy when uncertain of the genuine intangible asset prospects signaled via development cost capitalization.

Degree of Internationalization, Financial Structure and Cost of Capital: Evidence from Emerging Taiwan

The debt structure of companies in Developing and Emerging Economies (DEEs) is significantly different from that of companies in the developed countries. This study examines the effect of degree of internationalization (DOI) on leverage ratio (LEV) and cost of capital (COC) in DEE setting by using a sample of Taiwan listed companies. Our results show that DOI has a significant positive impact on short-term debt as well as a significant negative impact on long-term debt. Therefore, it appears that DOI has a substitution effect in DEE companies. In summary, our results indicate that DEE firms do not have the advantage of participating in the international financial market.

İHTİYATLILIK İLKESİ İLE LİKİDİTE ORANLARI ARASINDAKİ İLİŞKİ: BIST UYGULAMASI

Bu çalışmada 2005 ve 2020 yılları arasında BIST 30’da işlem gören işletmelerin ihtiyatlılık düzeyleri ile likidite oranları arasındaki ilişki zaman ve kesit verilerinin bir arada analiz edilmesine imkan sağlayan panel veri analizi yöntemiyle test edilmiştir. İhtiyatlılık düzeyinin hesaplanmasında Givoly ve Hayn (2000) tarafından geliştirilen negatif tahakkuk yöntemi kullanılmıştır. Likidite oranlarına ilişkin ise cari oran, likidite oranı (asit test oranı) ve nakit oran verileri kullanılmıştır. Araştırmada kullanılan veriler işletmelerin finansal durum tabloları ve nakit akış tablolarından elde edilmiştir. Verilerin hangi tahminci yöntemiyle analiz edilmesi gerektiğine ilişkin yapılan F testi ve Breusch-Pagan LM testi sonuçlarına göre olasılık değerlerinin p>0,05 olması havuzlanmış veri seti modelinin, sabit veya rassal etkiler modeli karşısında daha etkin sonuçlar vereceğini göstermiştir. Çalışmadan elde edilen sonuçlara göre bağımsız değişkenlerimiz olan cari oran, likidite oranı ve nakit oran değişkenlerinin tümünün olasılık değerinin p>0,05 olması işletmelerin ihtiyatlılık düzeyleri ile kısa vadeli borçlarını ödeme gücünü gösteren cari oran, likidite oranı ve nakit oran arasında anlamlı bir ilişki olmadığını göstermiştir.

IMPACT OF CAPITAL STRUCTURE ON FINANCIAL PERFORMANCE OF LISTED AGRICULTURAL COMPANIES IN NIGERIA

A company is usually faced with the challenge of financing investments; the management is to decide on the optimal mix of capital structure decision. This study sets to investigate the influence that capital structure of a firm has on financial performance of listed manufacturing firms in Nigeria for period spanning from 2017-2021. The dependent variable of the study is financial performance proxy by return on asset (ROA) while the independent variable of the study is capital structure proxy by long-term debt, short term debt, total debt ratio and total equity ratio. The population of the study consist of all the 5 listed manufacturing firms in Nigeria and the sampling technique was the census arriving at a 25 firm year observations. The multiple regressions was employed for the data analysis and the study revealed that long-term debt ratio has a negative insignificant relationship with return on asset while short-term debt, total debt ratio and total equity ratio have positive significant influence on return on asset. The study recommends that the management of listed manufacturing firms in Nigeria should pay attention in curtailing long-term debt and improving on short term debts in order to improve financial performance.