Total Assets Ratio Research Articles

PENGARUH KINERJA MODAL INTELEKTUAL, PERTUMBUHAN PENJUALAN, DAN FAKTOR LAINNYA TERHADAP FINANCIAL DISTRESS

This research was conducted to obtain empirical evidence and also analyze factors that can influence the dependent variabel is financial distress. The independent variabels used in this research are current ratio, cash ratio, debt to total asset ratio, sales growth, institutional ownership and intellectual capital.The population used in this research are consumer cyclicals, consumer non-cyclicals and transportation and logistic listed on the Indonesia Stock Exchange during the 2019-2022 period. The sample in this research consists of 182 companies or 546 data obtained through purposive sampling method. To test the hypothesis, this research used logistic regression. The results of this research show that intellectual capital performance affect financial distress. Meanwhile, current ratio, cash ratio, debt to total asset ratio, sales growth,and institutional ownership do not affect financial distress.

LIQUIDITY, PROFITABILITY, AND SOLVENCY: COMPARATIVE ANALYSIS OF FINANCIAL PERFORMANCE

This study aims to analyze the comparison of financial performance of PT Timah Tbk with PT Golden Energy Mines Tbk in terms of liquidity, profitability and solvency ratios. This type of research data is secondary data. Data collection techniques with literature and documentation. Data analysis used in liquidity ratio analysis consists of Current Ratio (CR), and Quick Ratio (QR), profitability consisting of Return on Asset (ROA) and Return On Equity (ROE), and solvency ratios namely Total Debt To Equity Ratio and Total Debt To Total Asset Ratio. The results showed that PT Timah has more ability to pay its short-term debt, more ability to pay its short-term debt that has been reduced by inventory when compared to PT Golden Energy Mines Tbk. PT Golden Energy Mines Tbk has more ability to obtain net profit after tax from total assets, more ability to obtain net profit after tax from total equity when compared to PT Timah Tbk. PT Timah Tbk has a lower level of debt risk and a lower level of debt risk when compared to PT Golden Energy Mines Tbk.

The quest for an optimal capital structure: an empirical analysis of European firms using GMM regression analysis

Purpose This paper explores the connection between capital structure and financial performance within European listed firms. The primary objective is to demonstrate an inverse U-shaped relationship between these two variables and pinpoint an optimal debt-equity mix.Design/methodology/approach In this study, we adopt a dynamic modeling approach to investigate the relationship between a firm’s capital structure and financial performance. Drawing on well-established theories and prior empirical studies, our model examines 3,121 dividend-paying firms from 41 European countries over 14 years, from 2008 to 2021. To enhance the reliability of our findings, we employ two distinct estimation techniques: the fixed effect model (FE) and the system generalized method of moments (System-GMM).Findings This study reveals an inverse U-shaped relationship between the firm’s financial performance, measured by the return on equity (ROE) and its capital structure (total liability to total assets ratio). Furthermore, an optimal capital structure of about 29% is determined for all firms in the sample, and about 21%, 28% and 41% industry-specific capital structure for manufacturing, real estate and wholesale trade, respectively.Originality/value This paper contributes to existing knowledge by empirically determining an optimal capital structure for listed firms across various industries in Europe, which very few studies have attempted to do in the past. An optimal capital structure is an invaluable benchmark for managers and other stakeholders, informing their decision-making.

Analysis Of The Influence Of Debt Policy, Company Size And Corporate Governance On Agency Costs For Property Companies In Indonesia

The purpose of this study is to investigate how agency cost is impacted by corporate governance mechanisms, company size, and debt policy. The study's independent variables include audit committees, institutional ownership, and the number of commissioners in corporate governance structures. Next, determine the company's size using the natural log of its assets and its debt policy, which is determined by dividing its total assets by its liabilities. Using the sales to total assets ratio, agency cost is the dependent variable in this study. In this study, secondary data are used. The property businesses that were listed on the IDX between 2019 and 2021 made up the study's population. Purposive sampling was used to choose the research sample, yielding 50 firms annually. Following data processing according to the chosen criteria, some firms made up the sample, which meant that some companies was the final sample size that was employed. Multiple regression analysis models are used in the analysis test. The study's findings show that debt policy and the board of commissioners have a big impact on agency costs. However, the size of the business, the audit committee, and institutional ownership have little impact on agency costs.

Pengaruh Rasio Keuangan, Firm Size, dan Cash Flow terhadap Financial Distress

This research aims to obtain empirical evidence regarding the influence of return on assets, current ratio, debt to equity ratio, firm size, total asset turnover, working capital to total asset ratio, and operating cash flow on financial distress. The sample of this research are cyclical and non-cyclical companies listed in Indonesia Stock Exchange between 2020-2022, and regularly issuing financial reports in Indonesian Rupiah. There are 179 companies with 537 data that selected as a final research sample and using a purposive sampling method for data processing. The obtained research results show that the current ratio influence financial distress. Other variables such as return on assets, debt to equity ratio, firm size, total asset turnover, free cash flow, working capital to total asset ratio, and operating cash flow do not influence financial distress.

Financial statement analysis was conducted to assess the financial performance of PT Unilever Indonesia Tbk in the 2018-2022 period using the Current Ratio, Debt Equity Ratio, and Return on Asset

Financial performance is a formal effort to evaluate the efficiency and effectiveness ofa company in generating profits. The method used is a qualitative method using a descriptive approach; the subject in this study is PT Unilever Indonesia Tbk and the object in this study is the financial statement data of PT Unilever Indonesia Tbk. The data source used in this study is secondary data taken from the official website of PT Unilever Indonesia Tbk. This study aims to determinethe financial performance of PT Unilever Indonesia Tbk using the CurrentRatio, debt-to-equityRatio, and return on assets. It is expected to provide helpful information for companies and investors in making investment decisions. Based on the attached data, it shows that during the 2018-2022 period, the average Ratio of each Ratio in PT Unilever Indonesia Tbk is as follows: at the liquidity ratio of current assets of 8,178,740 and current liabilities of 12,488,997. At the Ratio of total debt solvency of 14,415,546 and total equity of 5,223,178. Theprofitability ratio of total assets amounted to 56,794,724, and net profit amounted to 6,955,753. From the results of this study, the Company's financial performance shows a low level of liquidity, a higher level of risk due to the use of more considerable debt, and suboptimal operational performance. Therefore, companies must pay attention to cost management, debt management, and sales activities to improve financial performance. TheCompanyCompany should increase sales toenhance efficient financial performance. This research is expected to make theoretical contributions to the literature in this context, including in the context of economic and banking management.

WORKING CAPITAL MANAGEMENT STRATEGIES OF NIGERIAN MANUFACTURING INDUSTRIES AND FIRMS VALUE

This research explores the capital management strategies employed by Nigerian manufacturing industries and their impact on firm value, as measured by Earnings per Share (EPS). Employing an ex post facto research design, the study focuses on a population of 25 industrial goods industries, selecting a sample of 9 quoted manufacturing firms. The independent variables encompass various working capital management strategies, including accounts receivable management, accounts payable management, inventory management, cash conversion cycle, cash conversion efficiency, current assets to total assets ratio, and current liabilities to total assets ratio. The dependent variable is firm value, proxied by EPS. Results reveal both short-term and long-term effects of working capital management on EPS. The long-run model demonstrates significant negative relationships between accounts receivable management (ARM) and EPS, suggesting that efficient management of accounts receivables has a significant impact on financial performance. Conversely, accounts payable management (APM) exhibits a positive but non-significant effect. Inventory management (INVM) and cash conversion cycle (CCC) are positively related to EPS, with CCC and cash conversion efficiency (CCE) having significant effects. In the short run, the error correction model (ECM) indicates a negative and significant impact of deviations in accounts receivable management and cash conversion cycle on EPS. The study recommends among others that organizations focus on enhancing short-term corrective measures, such as agile and responsive strategies in accounts receivables, to ensure immediate and efficient impacts on financial performance.

Corporate governance and green innovation: international evidence

PurposeThis study aims to exploit Tobin’s Q model of investment to examine the relationship between corporate governance and green innovation.Design/methodology/approachThe study is based on a sample of 3,896 firms from 2002 to 2021, covering 45 countries worldwide. The authors adopt Tobin’s Q model to conceptualize the relationship between corporate governance and investment in green research and development (R&D). The authors argue that agency costs and financial market frictions affect corporate investment and are fundamental factors in R&D activities. By limiting agency conflicts, effective governance favors efficiency, facilitates access to external financing and encourages green innovation. The authors analyzed the causal effect by using the system-generalized method of moments (system-GMM).FindingsThe results reveal that the better the corporate governance, the more the firm invests in green R&D. A 1%-point increase in the corporate governance ratings leads to an increase in green R&D expenses to the total asset ratio of about 0.77 percentage points. In addition, an increase in the score of each dimension (strategy, management and shareholder) of corporate governance results in an increase in the probability of green product innovation. Finally, green innovation is positively related to firm environmental performance, including emission reduction and resource use efficiency.Practical implicationsThe findings provide implications to support managers and policymakers on how to improve sustainability through corporate governance. Governance mechanisms will help resolve agency problems and, in turn, encourage green innovation.Social implicationsUnderstanding the impact of corporate governance on green innovation may help firms combat climate change, a crucial societal concern. The present study helps achieve one of the precious UN’s sustainable development goals: Goal 13 on climate action.Originality/valueThis study goes beyond previous research by adopting Tobin’s Q model to examine the relationship between corporate governance and green R&D investment. Overall, the results suggest that effective corporate governance is necessary for environmental efficiency.

A Study On Working Capital Management With Special Reference To Oil India Limited

Administration of Working Capital is aessential chore for every manager in an organization, because it directly affects the liquidity and profitability of an organization. The present study examines the importance of working capital management and its impact on profitability of Oil India Limited. A few important ratios have been measured for prominence the effectiveness of working capital management. Pearson’s simple correlation coefficient has been applied for measuring the degree of relationship between the working capital management and profitability. The results inferred that out of eight ratios relating to working capital management, four ratios, viz., Current Ratio, Current Assets to Total Assets Ratio, Current Assets to Sales Ratio, and Cash Turnover Ratio, registered positive association with the selected profitability ratio (ROI), and the remaining ratios like Debtors Turnover Ratio, Inventory Turnover Ratio, Working Capital Turnover Ratio and Quick Ratio witnessed a negative association with the selected profitability ratio.

Bank-Specific and Macroeconomic Determinants of Profitability of Islamic Banks: Evidence from Bangladesh

This study investigates the determinants of profitability of Islamic banks in Bangladesh, considering different bank- specific and macroeconomic variables. This study used ROA and ROE as indicators of Islamic banks’ profitability. The study comprised data from eight Islamic banks spanned from the years of 2011 to 2020. Applying the Fixed Effect Model (FEM), Random Effect Model (REM), and Pooled OLS, the estimated result shows that the three methods classified investment ratio and cost-to-income ratio negatively affect the Islamic bank’s profitability indicators ROA. Whereas the investment-to-deposit ratio and inflation rate positively affect the Islamic bank’s ROE, conversely, Investment to total asset ratio, classified investment ratio, and capital adequacy ratio negatively affect the bank’s profitability of ROE. After applying the robustness method of FGLS, this study found that classified investment ratio, investment to deposit ratio, and the inflation rate is a strong predictor of increasing banks’ overall profitability, and the capital adequacy ratio, cost income ratio, and interest rate are a strong predictor of reducing Islamic banks profitability.

Promoter’s Shareholding, Financial Distress and Capital Structure Decisions: An Empirical Study of Indian Firms

This paper examines the effect of promoter’s shareholding and the level of financial distress on capital structure of Indian firms. Using the annual financial data of 1,102 non-financial firms listed on the Bombay Stock Exchange (BSE) from 2007 to 2019 in a panel structure, our study employs dynamic panel data techniques for analysis. The main objective of this paper is to find out how the financially distressed Indian firms choose debt in their capital structure and the role of promoter’s shareholding in such choices. For this purpose, four groups of companies have been formed by combining various degrees of promoter’s shareholding and the level of financial distress measured through Altman’s Z-Score. Dummy variables were introduced to represent each group in the model. This paper uses industry leverage, net working capital to total assets ratio, growth opportunities (Market to book ratio), profitability, tangibility and size as the control variables in the final empirical model.
 The findings provide that financially distressed Indian firms maintain higher leverage ratio than a financially non-distressed firm irrespective of the degree of ownership concentration in the hands of promoters. Since majority of Indian firms are owned by business families, this finding is completely opposite to the risk aversion behaviour of family- owned firms as advocated in literature.

COMPARATIVE ANALYSIS OF THE FINANCIAL STATEMENTS BASED ON PROFITABILITY AND SOLVENCY RATIO

This research aims to determine the comparative analysis of financial statements. PT Semen Indonesia (Persero) Tbk with PT Indocement Tunggal Prakarsa Tbk. Based on the results of analysis of profitability and solvency ratios. This type of research data uses secondary data. Data collection techniques are based on literature and documentation from several journals and financial reports. Analysis The data used is profitability ratio analysis consisting of Return on Assets (ROA) and Return On Equity (ROE). Then the solvency ratios are Total Debt To Equity Ratio and Total Debt To Total Asset Ratio. The research results show that PT Indocement Tunggal Prakarsa Tbk has a higher level of ability to obtain net profit after tax from the total assets it owns. PT Indocement Tunggal Prakarsa has a higher level of ability to obtain net profit after tax from the total equity it owns when compared to PT Semen Indonesia (Persero) Tbk. Based on the calculation results of the analysis, it can be seen that the Debt Equity On Ratio (DER) value of the two companies, it can be concluded that PT Indocement Tunggal Prakarsa Tbk has a lower level of debt risk when compared to PT Semen Indonesia (Persero) Tbk. Then, if we look at the Debt to Assets Ratio (DAR) analysis value, PT Indocement Tunggal Prakarsa Tbk has a lower level of debt risk when compared to PT Semen Indonesia (Persero) Tbk.

The effect of bank-specific dynamics on profitability under changing economic conditions: Evidence from Ghana

Analysts continue to demand explanations for the continuous flow of depositors’ and investors’ funds to persistently underperforming banks, while universal banking is premised on the ability to outperform the market. This study examines the effect of bank-level factors on the profitability of banks under changing economic conditions, using a dynamic panel system Generalized Method of Moments (GMM) technique for panel data collected from 18 universal banks in Ghana. The data collection period was from 2007 to 2021. The analysis revealed that lagged return on assets, capital adequacy ratio, and deposit to total asset ratio have a positive influence on bank profitability, whereas lagged return on equity, bank size, expenditure, and asset quality negatively impact profitability. While the effect of these variables on profitability is expected considering the literature, the evidence obtained for asset quality is inconsistent with the explanations in the literature as an increase in asset quality is expected to drive an impressive trend in profitability. Furthermore, a negative relationship was found to exist between economic growth and bank performance when economic expansion exerts a deteriorating effect on the returns on bank assets. This can be linked to the dispersion of investors’ and customers’ funds to other investments, which limits the amount of funds available to the banks to grant credits for interest income. Based on the findings, it can be concluded that bank-specific dynamics adapt to changes in economic conditions which can be explained by the normative guidelines of the Adaptive Market Hypothesis.

A Global Analysis of the COVID-19 Pandemic and Capital Structure in the Consumer Goods Sector

Understanding a company’s capital structure is essential for optimizing financial resources amid the challenges posed by the COVID-19 pandemic. This research examines how the pandemic affected the capital structures of global consumer goods companies across industries, market types, and regions. In this study, a fixed effects model was employed to analyze panel-data regression data spanning from 2018 to 2022, encompassing 1491 companies across 80 countries. The results revealed a significant and positive impact of COVID-19 on capital structure in the initial two years, contrasting with a negative trend in the third year, notably in the short-term debt to total assets ratio. The pandemic’s influence on the capital structure varied across sectors, markets, and regions, starting with a consistent positive impact before shifting to a negative and significant effect. The study provides valuable insights for businesses, policymakers, and researchers grappling with the financial implications of external shocks like the pandemic. It underscores the importance of prudent financial decision-making, leveraging the opportunities stemming from a conservative debt approach, and the growing reliance on short-term debt while staying adaptable in response to evolving market dynamics and economic changes.

STATE AND REGIONAL OWNED ENTERPRISES : HEAD TO HEAD FINANCIAL PERFORMANCE COMPARISON AT THE YEARS OF 2017-2021

The performance of State-Owned Enterprises (BUMN) and Regional-Owned Enterprises (BUMD) is currently the main hope regarding state revenues and one source of regional income, because BUMN and BUMD are national assets and regional assets which are very important as a source of funds for economic recovery. nationally, especially the Covid-19 pandemic that has just passed. The aim of this research is to determine the performance of BUMN compared to the performance of BUMD. Logically, the very large resources of BUMN compared to BUMD should make BUMN's performance better than BUMD and the results are expected to be very different. The data used is BUMN and BUMD financial performance data for five years, namely the 2017-2021 period. In this research, financial performance assessment uses financial ratio indicators, Current Ratio (CR), Debt To Equity Ratio (DER), Debt To Total Asset Ratio (DTA), Net Profit (NPM), Return On Assets (ROA) and Return On Equity (ROE) Test the hypothesis using the Kolomogorov-Sminov for normality-test and t-sample independent-test. The results of this research show that the financial performance of BUMN determined by the Current Ratio (CR), Debt To Equity Ratio (DER), Debt To Total Asset Ratio (DTA), Return On Assets (ROA) and Return On Equity (ROE) is not significantly different from the financial performance of BUMD for the 2017-2021 period.The performance of State-Owned Enterprises (BUMN) and Regional-Owned Enterprises (BUMD) is currently the main hope regarding state revenues and one source of regional income, because BUMN and BUMD are national assets and regional assets which are very important as a source of funds for economic recovery. nationally, especially the Covid-19 pandemic that has just passed. The aim of this research is to determine the performance of BUMN compared to the performance of BUMD. Logically, the very large resources of BUMN compared to BUMD should make BUMN's performance better than BUMD and the results are expected to be very different. The data used is BUMN and BUMD financial performance data for five years, namely the 2017-2021 period. In this research, financial performance assessment uses financial ratio indicators, Current Ratio (CR), Debt To Equity Ratio (DER), Debt To Total Asset Ratio (DTA), Net Profit (NPM), Return On Assets (ROA) and Return On Equity (ROE) Test the hypothesis using the Kolomogorov-Sminov for normality-test and t-sample independent-test. The results of this research show that the financial performance of BUMN determined by the Current Ratio (CR), Debt To Equity Ratio (DER), Debt To Total Asset Ratio (DTA), Return On Assets (ROA) and Return On Equity (ROE) is not significantly different from the financial performance of BUMD for the 2017-2021 period.

Impact of ERP Implementation on Company Bottled Water to Performance Company

AbstractThis study evaluates the impact of implementing an Enterprise Resource Planning (ERP) system on the performance of CV Tirta Sasmita, a bottled drinking water producer. It addresses the challenge of fragmented business processes, hindering effectiveness and efficiency, along with suboptimal utilization of data resources. Qualitative methods, including interviews, observations, and document analysis, were employed. The study applied the ADDIE approach to tailor ERP systems to the company's needs and processes.The study yielded three significant findings. Firstly, researchers successfully developed a customized ERP system aligned with the company's requirements. Secondly, there was a tangible enhancement in CV Tirta Sasmita's financial performance, notably reflected in an increased total turnover asset ratio. Thirdly, employee performance exhibited improvements in work quantity, quality, punctuality, effectiveness, and independence.This research offers valuable insights for similar businesses or those considering ERP system implementation, highlighting its potential to enhance operational efficiency and performance.Keywords:Information System, AMDK, ERP, Company Performance, Total Turn Over Asset Ratio

Impact of Liquidity Management on the Profitability of Development Bank in Nepal

This research investigates the impact of liquidity management on the profitability of three development banks in Nepal: SDBL, MNBBL, and GBBL. Data was collected from books and financial annual reports, covering Fiscal Years 69/70 to 78/79, resulting in 30 observations. The study employed correlation analysis and regression analysis to examine the relationship between liquidity management indicators, which are, in this case, Cash Reserve Ratio (CRR), Credit Deposit Ratio (CDR), Non-Performing Assets (NPA), Total Liabilities and Total Assets Ratio (TLTA), and Deposit to Total Assets Ratio (DTA) and profitability of development banks, i.e., Return on Equity (ROE). The findings indicate that liquidity management indicators have varying effects on profitability. The correlation analysis reveals strong positive correlations between CRR and ROE and moderate positive correlations between CDR, TLTA, and DTA with ROE. Additionally, NPA exhibits a significant negative correlation with ROE. The regression analysis further confirms the overall significance of the model, with CRR having a statistically significant positive impact on ROE. Based on these findings, the study recommends that development banks focus on optimizing liquidity management by maintaining an appropriate CRR level. Strengthening credit risk management practices and reducing non-performing assets are also suggested to enhance profitability. These findings contribute to understanding liquidity management's impact on profitability in the context of development banks in Nepal and provide valuable insights for bank management and policymakers.

Pengaruh Leverage terhadap Kinerja Keuangan Perusahaan

This study aims to determine the effect of leverage analysis on the company's financial performance, either simultaneously or partially. Leverage analysis will be described by the debt ratio, debt to equity ratio, long-term debt to equity ratio and long-term debt to total asset ratio while the company's financial performance is measured by return on equity. The population in this study are companies listed on the Indonesian stock exchange. . The sampling method used is purposive sampling method. The research data were obtained from the sample companies which were downloaded from the Indonesian Stock Exchange website. The data analysis technique used is descriptive statistical analysis and multiple regression analysis. The results of this study prove that simultaneously the variables debt ratio, debt to equity ratio, long-term debt to equity ratio and long-term debt to total asset ratio affect return on equity. Partially, the variable debt to equity ratio and long-term debt to equity ratio have an effect on return on equity.

Exploring the Intrinsic Factors Influencing Return on Assets: A Case Study of the Hotel Industry in Selected EU Countries

Purpose: The main aim of this study was to determine the intrinsic factors (total equity, trade receivable turnover, working capital turnover, long term debt, current ratio, debt to total assets ratio, debt to equity ratio, net sales revenue trend, total operating revenue trend, shareholders' equity trend, cash to total assets, current liabilities to total liabilities) that influence the financial performance of the Hotel Industry in select Central and Eastern European Union countries. Return on Assets (ROA) was used in this study as measure of financial performance. Design/methodology/approach: The paper uses panel data fixed effects model to examine dependent variable ROA as measure of the financial performance of select Tourism and Leisure Industry companies from Central and Eastern EU member states. The intrinsic factors were applied as independent variables. The applied panel data fixed effects model in the study was utilised to determine the impact of the intrinsic factors on financial performance. The data were obtained from EMIS data base. Overall data encompassed 614 companies from select eight Central and Eastern EU member states for the period 2015-2022. Findings: The model performed in this study discovered that intrinsic factors including total equity, trade receivable turnover, current ratio, debt to total assets ratio, as well as cash to total assets had a significant impact on the ROA. Total equity, current ratio, cash to total assets have positive impact as opposed to the trade receivable turnover debt to total asset, while years 2020 and 2021 had negative impact on the ROA. Research limitations/implications: This study was limited just on the select eight central and eastern European Union countries; moreover, the database EMIS used for this study lacks certain variables that are frequently used in similar studies. Result confirmed the importance of intrinsic factors and their influence on the financial performance of the leisure industry. Originality/value: This study contributes to the existing body of theory on financial performance through research on the new practitioners’ perception of the intrinsic factors relative to financial performance. There are very few empirical studies which examine financial performance variables in the Central and Eastern European leisure industry. Consequently, this study aims to bridge the gap between the available literature and body of research.

Does Cross-Border-Establishment Improve Competition and Performance of Indonesia’s Financial Sector?

This study examines the effects of cross-border establishment of financial institutions on competition level in Indonesia’s financial sector. We use sample data on all conventional banks, securities firms, life and general insurance companies from 2013-2020. To measure competition, we use Lerner index, Boone indicator and Panzar-Rosse. Our analysis shows that the entry of foreign financial institutions may increase the competition in the financial sector. Further analysis shows that the increasing competition have positive impact to profitability and intermediation, reflected by the return on asset, loan ratio, transaction value, and insurance premium income to total asset ratio. However, foreign financial firms tend to have higher market power compared to domestic counterparts due to the efficiency in doing their businesses. Hence, domestic financial institutions need to boost efficiency, particularly through the adaption of technology and capacity enhancement of human resources, in order to compete with more advanced foreign financial firms.