Total Equity Research Articles

CAPITAL STRUCTURE AND THE PERFORMANCE OF DEVELOPMENT FINANCE INSTITUTIONS IN NIGERIA

The study investigated the effect of capital structure on the performance of selected Development Finance Institutions (DFIs) in Nigeria. The study specifically examined the effect of Total Debt to Total Assets (TDTA) on performance of selected of development finance institutions in Nigeria; and ascertained the effect of Total Debt to Total Equity (TDTE) on performance of selected development finance institutions in Nigeria. The study adopted an ex-post facto research design and data were collected from published annual financial records of the selected DFIs on both TDTA and TDTE, the independent variables and Return on Assets (ROA), the dependent variable, for a period of ten (10) years (2013-2022). The population of the study composed of seven (7) national DFIs namely: Central Bank of Nigeria (CBN), Bank of Agriculture (BOA), Bank of Industry (BOI), Development Bank of Nigeria (DBN), Federal Mortgage Bank of Nigeria (FMBN), Nigeria-Export-Import Bank (NEXIM) and the Infrastructure Bank Plc (IBN). The study sampled four (4) national DFIs using a purposive sampling technique, including CBN, BOI, FMBN and NEXIM. Computation of the relevant ratios were done for the independent variables (TDTA and TDTE); and the dependent variable (ROA). Data analysis was done using multiple regression and the econometric technique of Dynamic Ordinary Least Squares (DOLS) with the aid of E-Views Version 13. The study found that TDTA has a negative but significant effect on ROA, indicating that a percentage change in TDTA leads to lower ROA by 0.071551 and TDTE has a positive effect of TDTE on ROA, showing that a percentage change in TDTE will significantly increase ROA by 0.001696. The study concluded that the investigated DFIs have low equity capital which seems to hinder their ability to attract large loans for operations. The study recommended amongst others that DFIs should maintain a balanced total debt to total assets (TDTA) and ensure the regular monitoring of the debt-to-asset ratio to ensure it remains within a healthy range which will help maintain a balance between leveraging and risk.

PENGARUH WORKING CAPITAL TURNOVER (WCT) DAN DEBT TO EQUITY RATIO (DER) TERHADAP RETURN ON ASSETS (ROA) PADA PT. MUSTIKA RATU TBK

This research aims to examine the influence of Working Capital Turnover (WCT) and Debt To Equity Ratio (DER) on Return On Assets (ROA) at PT. Mustika Ratu Tbk during the period from 2011 to 2022. The data used in this study are secondary data in quantitative form. The research instrument used includes tables covering current assets, total assets, current liabilities, total liabilities, total equity, sales, and net profit after tax. The population for this study covers 15 years (2008-2022), with a sample of 12 years (2011-2022). The sampling technique used is purposive sampling. Data collection methods involve documentation and literature review. The data analysis techniques employed include classical assumption tests, multiple linear regression, t-tests, and F-tests.The results of the analysis indicate that WCT has a significant partial effect on ROA, suggesting that the efficiency of working capital utilization affects the company's ability to generate profit from its total assets. Additionally, DER also has a significant partial effect on ROA, indicating that the company's capital structure influences its profitability. WCT and DER together have a significant simultaneous effect on ROA. This study contributes to understanding the factors influencing corporate financial performance and their relevance in managerial decision-making.

PENGARUH RASIO PROFITABILITAS DAN RASIO LIKUIDITAS TERHADAP NILAI PERUSAHAAN PADA PT. LIPPO KARAWACI TBK

The objective of this study is to assess the impact of the profitability ratio and liquidity ratio on the valuation of PT. Lippo Karawaci Tbk. The balance statement comprises Current Assets, Current Liabilities, Total Equity, Inventory, and Profit and Loss represented by Net Profit after Tax for a span of 12 years, from 2011 to 2022. Purposive sampling is a research strategy that involves selecting participants based on specific criteria. Linear regression is a statistical analytic approach used to assess hypotheses, starting with the basic assumption test. The test results indicate that the profitability ratio, as quantified by Return on Equity (ROE), does not exert a substantial influence on the value of the firm. The Quick Ratio (QR), which measures the liquidity ratio, has a significant influence on the value of a company. Based on the F test, it can be inferred that both Return on Equity (ROE) and Quick Ratio have a statistically significant influence on the value of a corporation.

Determinants of Social Responsibility Costs of Listed Manufacturing Firms in Nigeria

The study ascertained the determinants of social responsibility costs of listed manufacturing firms in Nigeria. Specifically, the study determined the relationship between firms' total assets and community development cost; total sales and staff development cost; and total equity and public utility cost respectively of listed manufacturing firms in Nigeria. The population of the study comprised all the 21 listed consumer goods manufacturing firms in Nigeria. Purposive sampling was applied in selecting the 15 consumer goods firms that made up the sample size for the study. Secondary data were collected from the annual reports of the sampled firms over a ten-year accounting period which spanned through 2013 to 2022. The Pooled Ordinary Least Square regression was used in testing the hypotheses. The findings of the study indicated that: there is a significant positive relationship between firms' total assets and community development cost of listed manufacturing firms in Nigeria (p-value = 0.0059); there is a significant positive relationship between firms' total sales and staff development cost of listed manufacturing firms in Nigeria (p-value = 0.0000); there is positive but non-significant relationship between firms' total equity and public utility cost of listed manufacturing firms in Nigeria (p-value = 0.7002). Based on the findings, it was generally recommended in the study that firms should prioritise their investment in social responsibility as their financial metrics progress so as to enhance their reputation and strengthen their relationship with their host communities and stakeholders.

Evaluation of public private partnerships in highways

This paper reviews and evaluates four U.S. P3 toll highways, identifying their performance and common challenges. Contrary to the conventional wisdom that federal and state governments should fund highways, this paper argues that users should bear the cost for both efficiency and equity considerations. The shift from government investment and operation of highways to Public-Private Partnerships (P3) was driven by the lack of public funding, more productive competitive business practices, and the government's desire for upfront payments to fund other unrelated public projects. However, these justifiable public benefits were accompanied by significant problems. Highways were often leased for 35 to 75 years, depending on the total equity and loans of the private partner and various risk factors.

Impact of Earnings and Cash Flow on Stock Return: A Case of Nepalese Commercial Banks

This study examines the impact of earnings and cash flow on stock return in the context of Nepalese commercial banks. Stock return and market price per share are selected as the dependent variables. The selected independent variables are net income, total equity, earnings per share, return on equity, cash flow from operating activities, cash flow from investing activities and cash flow from financing activities. The study is based on secondary data of 10 commercial banks with 100 observations for the period from 2012/13 to 2021/22. The data were collected from Bank Supervision Report published by Nepal Rastra Bank (NRB) and annual reports of the selected commercial banks. The correlation coefficients and regression models are estimated to test the significance and importance of earnings and cash flow on stock return in the context of Nepalese commercial banks. The study showed that return on equity has a positive effect on stock return and market price per share. It indicates that higher the return on equity, higher would be the stock return and market price per share. Similarly, total equity has a positive effect on stock return. It implies that increase in total equity, leads to increase in stock return. Moreover, net income has a positive effect on market price per share. It means that increase in net income leads to increase in market price per share. Similarly, the result also showed that there is a negative impact of cash flow from investing activities on stock return and market price per share. It indicates that increase in cash flow from investing activities leads to decrease in stock return and market price per share. Furthermore, there is a negative impact of cash flow from financing activities on stock return and market price per share. It indicates that increase in cash flow from financing activities leads to decrease in stock return and market price per share.

Impact of capital inflows on bank profitability: a comparative analysis of dual banking systems

PurposeUsing data on 739 banks from 22 countries with a dual banking system from 2012 to 2019, this paper aims to examine whether capital inflows affect banks’ profitability in recipient countries.Design/methodology/approachThe authors check the conjecture about the effect of capital inflows on the profitability of the host country’s banks by estimating the following regression:Pict=α0+α1·CFct+α2·Islamici+α3·CFct×Islamici+δ·Xict+θ·Yct+εict (1)where the dependent variable (Pict) refers to bank profitability, measured by either ROA or ROE for bank i, country c and year t. ROA is defined as the ratio of net profit to average total assets expressed as a percentage, which determines how efficiently a bank uses its assets to generate a profit. ROE is defined as the ratio of net profit to average total equity expressed as a percentage, which is a measure of increases in shareholders’ wealth.FindingsThe authors find that capital inflows are generally positively associated with bank profitability. However, cross-border capital inflows reduce the rate of return in Islamic banks relative to their conventional counterparts. When decomposing inflows by instrument, the authors find that the enhancing role of capital inflows on bank profitability comes mainly from debt inflows and borrowers; the authors observe that the documented results emanate mostly from the inflows to the financial sector. These results remain unchanged if holding a bank’s risk constant. Overall, foreign funds in the form of debt inflows targeting the financial sector can disproportionately improve the performance of commercial banks in recipient countries.Originality/valueThe paper is an original research project. The analysis contributes to the existing literature in several ways: the authors study whether the impact of capital inflows on bank profitability varies with the bank business model by looking at both the Islamic and conventional bank systems. The profitability of the banking system is an important catalyst for growth and stability. The authors also decompose capital inflows to recipient countries into their equity and debt components and study the differential impact of those components on the profitability of Islamic and conventional banks.

Application of a Performance Evaluation Model to the Paper and Paper Products Printing Sector: The DEA-AHP Hybrid Algorithm

The paper and paper products printing sector plays a crucial role in generating income, creating employment opportunities, and supporting exports and various industries. Measuring the efficiency of companies operating in this sector is important in identifying areas for improvement and enhancing overall performance. In this study, a two-stage DEA (data envelopment analysis)-AHP (analytic hierarchy process) approach is proposed to analyze the efficiency of twelve paper and paper products printing companies traded on Borsa Istanbul. The modified DEA method is employed to make pairwise comparisons of the companies. Total assets, total equity, and the number of employees are selected as inputs, while revenue and net profit are considered as outputs. The AHP method prioritizes the companies by considering the outputs of the mathematical models constructed via DEA. The proposed framework presents a different view because it contributes to identifying the most efficient company, benchmarking company performance, and determining areas for improvement.

Risk Management Analysis and Investment Strategy on Forex Online Trading

<span lang="EN-US">The purpose of this study is to analyze risk management and investment strategies in Forex Online Trading. The method used in this study is a qualitative method with a descriptive description. Data collection techniques using qualitative analysis. The results show that risk management in Forex Online Trading can be reviewed through risks that can be reached by traders, as well as market risks that cannot be reached by traders. The first risk can be reviewed through total equity risk and trading position risk, while market risk can be reviewed through portfolio diversification, understanding price changes and volatility, and understanding leverage and margin. An investment strategy in Forex Online Trading can be considered through four types of methods, namely the Martingale trading strategy, the Trading by News strategy, and the Pending Order strategy.</span>

Analysis Of The Use Of Return On Asset, Return On Equity, And Economic Value Added In Assessing Company Financial Performance

The purpose of this study was to determine the financial performance of PT Unilever Indonesia Tbk., PT Gudang Garam Tbk., and PT Bank Central Asia Tbk. in 2019, 2020 and 2021 using ROA, ROE and EVA analysis. The results of this study indicate that PT Unilever's financial performance in terms of ROA, ROE, and EVA shows unfavorable results. This is because PT Unilever's ROA, ROE, and EVA tend to decrease from year to year. This decline was mainly due to decreasing profits during the Covid-19 pandemic in 2020 and PT Unilever has not been able to fully recover from the decline during this pandemic. The overall financial performance of PT Gudang Garam is not good because most of PT Gudang Garam's ROA, ROE, and EVA values ​​show a decline. However, PT Gudang Garam is trying to improve its performance in 2021, one of which is by reducing its capital costs. Then, PT Bank Central Asia's financial performance showed good results because ROA, ROE, and EVA managed to increase in 2021 after experiencing a slight decline in 2020. In addition, PT Bank Central Asia's total equity and total assets also increased from 2019 until 2021 which may indicate that the financial condition of PT Bank Central Asia is in a fairly stable position Keywords : ROA, ROE, EVA

Analyzing Trends in Key Financial Indicators: A Case Study on ORION Pharma Limited

This descriptive research study aims to examine the performance trends of ORION Pharma Limited within the context of its operations in Bangladesh. The study is based on secondary data extracted from annual reports spanning from FY 2018-19 to 2022-23 of the chosen company. It employs trend percentage analysis on key financial metrics derived from these reports. Firstly, the analysis focuses on fluctuations in key financial indicators of the statement of profit or loss, such as net sales revenue, gross profit, operating profit, pre-tax profit, and post-tax profit. Despite facing challenges, the company has shown resilience and adaptability, showcasing noticeable recoveries and improvements during different periods. These changes reflect ORION Pharma's responsiveness to market conditions and efforts to manage expenses efficiently. The analysis suggests opportunities for strategic expansions and profit enhancements despite occasional setbacks. Secondly, examining the trend percentage of key metrics of the statement of financial position for ORION Pharma, the study shows consistent growth in total assets, driven by expansions in both current and non-current assets. Though liabilities increased notably, total equity showed positive growth, indicating effective management and sustained profitability. In summary, ORION Pharma demonstrates strong financial performance and strategic planning, positioning it for continued growth and profitability.

Determinants of bank’s dividend policy: a life cycle theory test in Indonesia

PurposeThis research attempts to examine bank dividend policy in Indonesia by applying the life cycle theory of dividends.Design/methodology/approachThis research used secondary data gotten from two sources: banks’ annual financial statements from 2005 to 2019 and the number of observation samples was 510 from 42 banks. Random Effects Logit Model (RELM) is used to detect the influence of independent variables on Propensity to Pay Dividends (PPD) and Random Effects Tobit Model (RETM) is used to test the influence of independent variables on Dividend Payout Ratio (DPR).FindingsThe RELM results show that Retained Earnings to Total Equity (RE/TE), Retained Earnings to Total Asset (RE/TA) and bank age have a positive impact on the propensity to pay dividends (PPD) while bank growth (GRW) has a negative impact. The RETM results reveal that RE/TE, ROA and bank size have a positive impact on the dividend payout ratio (DPR) while GRW has a negative impact. This analysis also discovers that the capital adequacy ratio (CAR) and Non-performing Loans (NPL) is one important factor considered by banks in Indonesia in determining their dividend policy.Research limitations/implicationsThis study contributes to enriching literature in finance, especially in the life cycle theory of dividends. Also, it can be a guide to consider by investors before deciding to put their shares in banks in Indonesia.Originality/valueResearch on bank-specific life cycle theory is very difficult to find, especially in the Indonesian context, so this research can enrich the body of knowledge on dividend decisions.

Implementation of PSAK 107 and the Effect of Ijarah Financing on the Profitability of BPRS Amanah Ummah Leuwiliang Before and After the Covid-19 Pandemic Period

There are several Islamic private banks that have experienced setbacks in generating profits so that the assets and capital generated are not so good due to covid-19. Bank Amanah Ummah is experiencing declining profitability. The purpose of this study was to determine the effect of ijarah financing on the profitability before the covid-19 pandemic and afterwards of BPRS Amanah Ummah Leuwiliang. The data used are financial statements and interview results regarding the application of PSAK 107 for the 2017-2020 period. The data analysis method is simple linear regression using Microsoft excel 2010. Profitability is calculated by ROE net income divided by total equity. The results of this study indicate that ijarah financing has an effect on profitability before and after the pandemic, the ijarah financing scheme is sufficient to help the community, and the application of PSAK 107 regarding ijarah accounting is in accordance with the provisions.

DETERMINANTS OF CAPITAL STRUCTURE IN THE AGRICULTURAL SECTOR: EMPIRICAL EVIDENCE FROM LISTED COMPANIES

This study investigated the capital structure of 18 publicly traded agricultural companies over a 10-year period (2012-2022), specifically focusing on short-term debt to total liabilities (SHTDTL). Employing a dataset of 121 observations, the strategic financing decisions of these firms in the Republic of Srpska’s stock market were analyzed. The study examines the impact of various factors, including total debt to total equity (TDTC), tangible assets (TOA), company size (CS), current assets ratio (CR), current assets to total assets (CAA), return on equity (ROE), and return on assets (ROA), on capital structure choices. Results reveal that TOA, CAA, and ROE significantly positively influence the short-term debt ratio, while CS and ROA have a significant negative impact. This research sheds light on the financial decision-making of agricultural enterprises, offering insights that can inform their financing strategies and improve financial performance.

Financial Sustainability Perusahaan BUMN Sektor Transportasi Laut: DER Sebagai Variabel Mediasi

The concept of sea toll is one of the maritime transportation programs or strategies implemented by the government in improving inter-island relations and supporting economic growth. So that financial sustainability is important related to the sustainability of the policy. This study uses an independent variable, namely Return On Assets (ROA) with a dependent variable Financial Sustainability with Debt To Total Equity (DER) as a mediation variable. The purpose of this study is to see the effect of Debt To Total Equity (DER) in mediating the variable Return On Assets (ROA) on Financial Sustainability. This research uses the object of research of state-owned companies engaged in sea transportation, namely PT. PELNI and PT. ASDP. Data is obtained from financial statements. The results show that the result of two-tailled probality value is 0.20127969 > 0.05. The results can be concluded that Debt to Total Equity (Z) does not mediate Return on Asets (ROA) to financial sustainability.

How Do Commercial and Non-commercial Banks Adjust Capitalization Ratio: Evidence from Tanzania

This study examines the dynamic balanced panel data to explore the level of capitalization adjustment process for commercial and non-commercial banks in Tanzania for a period of 10 years from 2012 to 2021 in a two-step system GMM estimator. The findings of the research reveal that the cost of adjustment towards the required bank capitalization ratio is lower for commercial and non-commercial banks operating in Tanzania. The results are significant to the instantaneous adjustment process of a capitalization ratio measured in terms of the ratio of bank total equity to total assets. This finding is consistent with the dynamic trade-off theory of capitalization ratio using the coefficient value of the lagged response variable. The result reveals further that return on assets reduces the cost of the target bank capitalization ratio which means it eliminates the financial distress because return on assets is easier to be valued by investors. Therefore, it can be used as an indicator of the good performance of banks that can increase the easy availability of external capital from prospective and existing investors. The negative and significant sign of the bank size coefficient (-0.710) implies that the sample of banks in this study in terms of equity to assets ratio causes the capitalization ratio to deviate from the target level. This is consistent with the too-big to fail hypothesis. Abdulhamid et al. (2019) hold that an inverse association between bank size and capitalization ratio would happen because large banks have comparative advantages in non-traditional banking activities (interest) since they can operate with a fixed cost. The findings of this study have significant policy implications for economic and financial sector growth.

The Influence Of Capital Expenditure, Total Debt To Total Assets, Total Debt To Equity And Long Term Debt To Total Equity On Profitability In Manufacturing Companies Listed On The Indonesian Stock Exchange In 2014-2018

This study aims to analyze the Effect of Capital Expenditure, Total Debt to Total Assets, Total Debt to Equity and Long Term Debt to Total Equity on Profitability in Manufacturing Companies Listed on the Indonesia Stock Exchange in 2014-2018. This research is an explanatory research that explains the causality relationship using secondary data with the population are all Manufacturing Companies Listed on the Indonesia Stock Exchange in 2014-2018. A sample of 11 companies was selected using the purposive sample method in accordance with predetermined criteria including being listed on the IDX and delivering in full accordance with the information needed, namely Capital Expenditure, Total Debt to Total Assets, Total Debt to Equity and Long Term Debt to Total Equity and profitability measured through ROA during the period 2014 - 2018. The analytical method used is linear regression panel data. The results showed that at 95% confidence level of the four dependent variables studied were: Capital Expenditure, Total Debt to Total Assets, Total Debt to Equity and Long Term Debt to Total Equity, there was one variable that had a significant effect on Profitability in Registered Manufacturing Companies on the Indonesia Stock Exchange in 2014-2018 namely and Long Term Debt to Total Equity. Meanwhile, if tested simultaneously Capital Expenditure, Total Debt to Total Assets, Total Debt to Equity and Long Term Debt to Total Equity have a significant effect on profitability. Keywords : Capital Expenditure, Total Debt to Total Assets, Total Debt to Equity, Long Term Debt to Total Equity and Profitability

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.

Analisis Rasio Keuangan Untuk Menilai Kinerja Keuangan Pada PT. Aneka Tambang Tbk yang Terdaftar di BEI Periode 2017-2021

This study aims to determine and assess financial performance using liquidity ratios, solvency ratios, and profitability ratios at PT. Aneka Tambang Tbk. The data collection method in this study is to use secondary data, namely financial reports from 2017-2021. This study analyzed data using descriptive methods with a qualitative approach. Based on the results of the research, it shows that the average value of the liquidity ratio in 2017-2021 is in an illiquid state because it is below the industry standard, which means that the company has not been able to manage its assets optimally, so that the company's short-term debt is greater than the company's current assets. The solvency ratio shows that the average value in 2017-2021 is in a solvable state because it is below the industry standard, which means the company is capable of meeting its debts. And the profitability ratio shows that in 2017-2021 it is not profitable because it is below industry standards, which means that the company's ability to generate good profits from sales, total assets and total equity of the company is still not good because the cost of goods sold continues to increase.

An Assessment of Capital Structure Decisions among Listed Deposit Money Banks in Nigeria

This study aimed to assess Capital Structure Decision among listed Deposit Money Banks (DMBs) in Nigeria by assessing the effects of total equity and debts on capital structures of DBMs in Nigeria. The study alsocorrelated asset tangibility to firm size and examined the effect on the capital structure of the Banks. The study used secondary data collected from the annual accounts and reports of the selected ten (10) banks purposively selected for twelve (12) years covering 2011- 2022. The study’s population is made up of twenty-four existing listed deposit money banks on the list on the Nigerian Exchange Group plc based on the availability of data. The study employed explanatory variables of total equity, total debt, asset tangibility, and firm size to capture financial statement components. Data was analyzed using descriptive analysis and panel regression models. Findings revealed that equity, debts, and assets tangibility have positive and significant effects on the capital structure decision of the selected banks, while the firm’ size does not. The study concluded that equity capital, debt capital, and long-term assets are relevant in capital structure decision of listed deposit money banks in Nigeria. It is recommended that management should carefully assess the appropriate mix of equity and debt that maximizes income potentials and continuity of the firm in the context of substantial tangibility of the assets.