Impact of liquidity and financial leverage on firm’s profitability – an empirical analysis of the textile industry of Pakistan

2019 ◽  
Vol 23 (4) ◽  
pp. 291-305 ◽  
Author(s):  
Asif Hussain Samo ◽  
Hadeeqa Murad
Keyword(s):  
Textile Industry ◽  
Negative Impact ◽  
Negative Relationship ◽  
Secondary Data ◽  
Annual Data ◽  
Strong Impact ◽  
Financial Leverage ◽  
Content Type ◽  
The Impact ◽  
Textile Sector

Purpose This study aims to determine the impact of liquidity and financial leverage on the profitability, using a sample of 40 selected publicly quoted companies in the textile sector of the Pakistani economy. Design/methodology/approach Through quantitative approach, pooled panel regression and descriptive statistics models are used by taking annual data of Pakistan’s textile sectors from 2006 to 2016. Secondary data has been gathered from financial statements of the firms. Findings The results revealed that there is a positive relationship between liquidity and profitability and negative relationship between financial leverage and profitability. The results for liquidity measure CR revealed positive strong impact on ROA and the financial leverage measure D_E ratio showed negative but not strong impact on ROA. The other part of result concluded that there is a positive strong impact of C_R on ROE too and D_E has a negative impact on ROE. Research limitations/implications The results are showing the impact among these ratios for the textile sector of Pakistan only. Practical implications This study can help higher management of textile firms firm in decision-making stating clearly about how to perform well to enhance financial health of company, which can encourage investors to invest in companies having sound market standing. Originality/value This study takes the latest empirical data with different analysis technique.

scholarly journals Financial Leverage and Financial Performance: Empirical Evidence From Listed Textile Industry of Pakistan

2018 ◽  
Vol 8 (4) ◽  
pp. 457
Author(s):  
Laila Javeed ◽  
Rehana Tabassam
Keyword(s):  
Financial Performance ◽  
Textile Industry ◽  
Manufacturing Industry ◽  
Negative Relationship ◽  
Financial Leverage ◽  
Organizational Capability ◽  
Return On Equity ◽  
Financial Condition ◽  
The Impact ◽  
Textile Sector

The textile sector in Pakistan is the largest manufacturing industry and recognizable model of resistance economy. Over centuries, textile sector has been the country’s backbone making available sources of occupation and export returns. Generally, financial leverage is the organizational capability of using borrowed money. It can be described as a fraction, to which a company uses fixed income securities such as debt and equity. The objective of the current study is measuring the impact of financial leverage on firm’s financial condition. It is essential to know whether a positive or negative relationship exists between two terms, financial leverage and financial performance of the textile industry; evidence from the listed firms of Pakistani textile industry from 2007-2016. Pooled regression analysis technique shows that there is positive relationship between financial leverage and financial performance (Returns on Assets, Sales Growth and Net Profit Margin). On the other hand, negative relationship exists between Return on Equity ratio. It is confirmed that the organizations have more profitability, might enhance the financial performance having more levels of financial leverage. This study also gives evidence by estimating different facts. It exposes that the main elements of the textile industry in Pakistan enhance their financial performance by employing the financial leverage strategy and can attain a sustainable future growth by making decisions about the selection of their optimum capital structure.

An empirical investigation on the impact of marketing strategy style on firm performance: evidence from public firms in China

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Rui Wang ◽  
Liqiong Liu ◽  
Yu Feng
Keyword(s):  
Marketing Strategy ◽  
Corporate Performance ◽  
Negative Impact ◽  
Secondary Data ◽  
Listed Companies ◽  
Research Issues ◽  
Content Type ◽  
Public Firms ◽  
Negative Effect ◽  
The Impact

PurposeThe mechanism of marketing strategy style and its impact on firms are research issues received wide attention. In particular, the aggressive style of marketing strategy has been chosen by many companies, but recent studies have shown that it has a negative effect on corporate performance. This leads to the core issue of this paper – does the aggressive style of marketing strategy always had a negative impact on corporate performance? Are there any factors that can alleviate this negative impact?Design/methodology/approachBased on the resource-based theory and agency theory, this paper takes the Growth Enterprise Market (GEM) listed companies as the research objects, collects secondary data and conducts the research by regression model.FindingsThe empirical research shows that: (1) the aggressive style of marketing strategy significantly and negatively affects the performance of firm; (2) the resource constraint can moderate the main effect and resource control play a weak adjustment role.Practical implicationsIn practice, this paper confirms the adverse impact of aggressive style of marketing strategy on the performance of listed companies on GEM and inspires the industry to strengthen the control and supervision of marketing resources.Originality/valueThis paper makes up for the research gap in the field of cross-research in finance and marketing theoretically.

scholarly journals Strategic Management as Key Influencer on the Development of Textile Industry in the Country of Kosovo

2019 ◽  
Vol 2 (3) ◽  
pp. 23
Author(s):  
Rrezarta Gashi
Keyword(s):  
Strategic Management ◽  
Textile Industry ◽  
Secondary Data ◽  
Field Work ◽  
Primary Data ◽  
Manufacturing Companies ◽  
Local Literature ◽  
The World ◽  
The Impact ◽  
Textile Sector

Considering the impact of strategic management, today all companies of all sectors must have a strategic plan compiled in details. In the frame of this plan, there must be included also human resources, investments in marketing, investments in technology, and noticeably the last one is recently going through great modifications. Based on statistic data Kosovo during recent years have made advanced steps toward the development of all sectors, specifically in textile sector. Therefore, this paperwork aims to step up the priorities and challenges that have the textile sector in the country of Kosovo, a country that is in transition phase.The focus of this study will be textile companies, including manufacturing companies. For the conclusion of this research will be used primary and secondary data. Primary data will be the data received directly from field work, through questionnaire that will be used especially for this research, whereas secondary data will be received by the use of foreign and local literature, also from researched made previously, that have to do with textile sector in all countries of the world.

Improving China's alfalfa industry development: an economic analysis

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Wenxin Wang
Keyword(s):  
Negative Impact ◽  
Arable Land ◽  
Secondary Data ◽  
Influential Factors ◽  
Content Type ◽  
Measurement Results ◽  
Significant Negative Impact ◽  
Negative Effect ◽  
The Impact ◽  
Positive Effect

PurposeThis study analyzes the factors which affect the alfalfa cultivation acreage in China and estimates the development of alfalfa planting by the supply model.Design/methodology/approachBased on the characteristics and actual conditions of alfalfa cultivation in China, a naïve empirical model was created to analyze the impact of various influencing factors on the cultivation acreage of alfalfa.FindingsThe analysis of influential factors shows that China's alfalfa planting conforms to naïve price behavior. The prices of alfalfa and per capita arable land occupancy have a positive effect on the cultivation acreage, while the price of competitive crops and transportation costs have a negative effect on the production of alfalfa. Lastly, the 2012 alfalfa subsidy policy has a significant negative impact on alfalfa cultivation acreage.Research limitations/implicationsDue to the limited research on alfalfa supply in China, there is a lack of available research data and statistical data. A large number of data in this study are mainly indirect data derived and calculated from other industrial data. The measurement results may not be fully accurate.Originality/valueThis study represents the first empirical analysis of the characteristics of the factors influencing alfalfa cultivation acreage in China. The secondary data were used to analyze the influence of various control variables on the cultivation acreage of alfalfa, which is different from existing research.

The impact of marketing innovation on companies’ environmental orientation

2020 ◽  
Vol 35 (1) ◽  
pp. 1-12 ◽  
Author(s):  
Natalia Medrano ◽  
María Cornejo-Cañamares ◽  
Cristina Olarte-Pascual
Keyword(s):  
Technological Innovation ◽  
Negative Relationship ◽  
Secondary Data ◽  
Manufacturing Companies ◽  
Path Modeling ◽  
Environmental Orientation ◽  
Content Type ◽  
Marketing Innovation ◽  
Service Companies ◽  
The Impact

Purpose The purpose of this study is to explore the relationship between companies’ marketing innovation and environmental orientation and to determine how this relationship differs between manufacturing and service companies. Design/methodology/approach The study uses secondary data from the Technological Innovation Panel (PITEC) to look at 6,435 Spanish companies during the 2013-2015 period. To examine the contingency effect of the activity sector, the sample is divided into two subsamples: manufacturing companies and service companies. Partial least squares path modeling is used to test and validate the research model and proposed hypotheses. Findings The results show there is a statistically significant negative relationship between marketing innovation and environmental orientation. Significant differences were also found between manufacturing and service companies depending on the companies’ activity sector and size. Practical implications The analyzed manufacturing and service companies still use traditional marketing and have yet to embrace the “green marketing” or “marketing 3.0” concept. The marketing innovations a company undertakes should be positively, rather than negatively, related to its environmental orientation. In today’s companies, the two actions must go hand in hand. Originality/value Most studies on environmental orientation have focused on its relationship with technological innovation. In this sense, it is important to analyze its relationship with marketing innovation as well, as nowadays, when consumers are deciding between different companies’ products, they look for “companies with values.” Companies thus need to engage in environmentally oriented marketing innovation.

scholarly journals Credit risk management

2018 ◽  
Vol 10 (2) ◽  
pp. 185-205
Author(s):  
Hassan Akram ◽  
Khalil ur Rahman
Keyword(s):  
Risk Management ◽  
Credit Risk ◽  
Banking Industry ◽  
Negative Impact ◽  
Descriptive Analysis ◽  
Secondary Data ◽  
Credit Risk Management ◽  
Content Type ◽  
The Impact ◽  
Better Than

PurposeThis study aims to examine and compare the credit risk management (CRM) scenario of Islamic banks (IBs) and conventional banks (CBs) in Pakistan, keeping in view the phenomenal growth of Islamic banking and its future implications.Design/methodology/approachA sample of five CBs and four IBs was chosen out of the whole banking industry for the study. Secondary data obtained from the banks’ annual financial reports for 13 years, starting from 2004 to 2016, were analyzed. Multiple regression, correlation and descriptive analysis were used in the examination of the data.FindingsThe results show that loan quality (LQ) has a positive and significant impact on CRM for both IBs and CBs. Asset quality (AQ), on the other hand, has a negative impact on CRM in the case of IBs, but has a significantly positive relation with CRM in the case of CBs. The impact of 16 ratios measuring LQ and AQ have also been individually checked on CRM, by making use of a regression model using a dummy variable of financial crises for robust comparison among CBs and IBs. The model proved significant, and CRM performance of IBs was observed to be better than that of CBs. Moreover, the mean average value of financial ratios used as a measuring tool for these variables shows that the CRM performance of IBs operating in Pakistan was better than that of CBs over the period of the study.Practical implicationsThe research findings are expected to facilitate bankers, investors, academics and policy makers to build a better understanding of CRM practices as adopted by CBs and IBs. The findings would be useful in formulating policy measures for the progress of the banking industry in Pakistan.Originality/valueThis research is unique in terms of its approach toward analyzing and comparing CRM performance of CBs and IBs. Such work has not been carried out before in the Pakistani banking industry.

Supplier change, market competition and enterprise innovation

2022 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Yafei Zu ◽  
Ruonan Zhang
Keyword(s):  
Negative Impact ◽  
Market Competition ◽  
Negative Relationship ◽  
Interaction Model ◽  
Content Type ◽  
Manufacturing Enterprises ◽  
Enterprise Innovation ◽  
The Impact ◽  
Supplier Relationship

PurposeThe purpose of this paper is to study enterprise innovation in the perspective of external supplier relationship. On this purpose, this paper examines the impact of supplier change on enterprise innovation with the moderating role of market competition.Design/methodology/approachUsing 2012–2020 empirical data of Chinese listed manufacturing enterprises, this paper investigates the relationship among supplier change, market competition and enterprise innovation through a two-way interaction model.FindingsThe results show that supplier change has a negative impact on enterprise innovation. And market competition intensifies the negative relationship between supplier change and enterprise innovation. Additional analyses indicate that the main effect and the moderating effect are more significant when the enterprise is non-state-owned or has lower ownership concentration.Originality/valueThis paper studies enterprise innovation from the perspective of external stakeholders. It focuses on supplier relationship in a dynamic variation view, instead of the traditional static ones. Moreover, this paper explores the contingency effect of market competition and gives practical implications for managers to adjust innovation strategy flexibly.

The impact of financial ratios on the financial performance of a chemical company

2014 ◽  
Vol 10 (2) ◽  
pp. 154-160 ◽  
Author(s):  
Halimahton Borhan ◽  
Rozita Naina Mohamed ◽  
Nurnafisah Azmi
Keyword(s):  
Financial Performance ◽  
Negative Relationship ◽  
Secondary Data ◽  
Multiple Regression Model ◽  
Profit Margin ◽  
Financial Ratios ◽  
Content Type ◽  
Chemical Company ◽  
Operating Profit ◽  
The Impact

Purpose – The purpose of this paper is to examine the impact of financial ratios on the financial performance of a chemical company: LyondellBasell Industries (LYB). Some selected ratios: current ratio (CR) and quick ratio (QR) represent the liquidity ratios, debt ratio (DR) and debt equity ratio (DTER) represent the leverage ratios, while operating profit margin (OPM) and net profit margin (NPM) represent the profitability ratios. LYB faced financial problems after its merger and the financial performance of the company shrank to negative due to the world financial crisis. However, this company has bounced back after a year and is now the world's third largest chemical company based on revenue. Design/methodology/approach – The financial ratios were measured from 2004 to 2011, quarterly. A multiple regression model has been used and secondary data has been analyzed. Findings – The results shows that CR, QR, DR and NPM have a positive relationship while DTER and OPM have a negative relationship with the company's financial performance. Among the six ratios, CR, DR and NPM show the highest significant impact on the company's performance. Originality/value – This research paper contributed the result of the impact of financial ratios on the financial performance of a chemical company as the previous studies with this focus are hard to find and some of the sources are not specifically related to the topic.

Remittances, electricity consumption and electric power losses in Jamaica

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Anupam Das ◽  
Adian McFarlane
Keyword(s):  
Electric Power ◽  
Granger Causality ◽  
Negative Relationship ◽  
Electricity Consumption ◽  
Response Analysis ◽  
Annual Data ◽  
Power Losses ◽  
Content Type ◽  
Long Run ◽  
The Impact

PurposeThe purpose of this paper is to examine the impact of remittance inflows (remittances) on electricity consumption and electric power losses in Jamaica.Design/methodology/approachThe authors use annual data from 1976 to 2014 and apply vector error correction modelling, Granger causality testing and impulse response analysis.FindingsFirst, the authors find that there is co-integration between remittances and the energy variables, namely electricity consumption and electric power losses. Second, short-run Granger causality exists between the energy variables and remittances. This causality is bidirectional between the energy variables and positive changes in remittances, but it is unidirectional running from the energy variables to negative movements in remittances. Third, the authors find that in the long-run remittances have a negative relationship with electric power losses and a positive relationship with the consumption of electricity.Practical implicationsFindings from this paper will help to elucidate the relationship between electricity consumption, and electric power losses, and remittances.Social implicationsThe problem of electric power losses is acute in Jamaica and it is mostly due to theft. At the same time, Jamaica receives significant remittances. Social policy could have a role to encourage the use of remittances to help stem the theft of electricity.Originality/valueThis is the first study that examines the relationships between remittances, electricity consumption and electric power losses.

scholarly journals Impact of Financial Leverage on Debt Servicing Capability - A Comparative Study Between Listed MNCs and Domestic Companies of Bangladesh

2019 ◽  
Vol 9 (4) ◽  
pp. 290
Author(s):  
Syed Md. Khaled Rahman ◽  
Tasmina Chowdhury Tania
Keyword(s):  
Correlation Coefficient ◽  
Negative Relationship ◽  
Secondary Data ◽  
Financial Leverage ◽  
Coverage Ratio ◽  
Quota Sampling ◽  
The Impact ◽  
Domestic Companies ◽  
Two Populations ◽  
Selection Of

The use of debt in a firm’s capital structure is called financial leverage. The main objective of the study was to analyze the impact of financial leverage on debt servicing capability of DSE-listed MNCs & domestic companies in Bangladesh over a 20-year period (1998-2017).The study was based on secondary data. There are two populations in the study-one for MNCs and other for domestic companies. Stratified and Quota Sampling techniques were applied for the selection of sample items of MNCs and domestic companies respectively. Seven companies from each of the two populations were selected as sample from six industrial sectors.It is seen that MNCs’ interest paying ability and debt repayment capability is far higher than that of domestic companies in every year. In case of both types of firms, correlation coefficient between DFL (CS) and coverage ratio is significant. Weakly negative relationship is seen between DFL (General) and coverage ratios. MNCs show comparatively stronger negative relationship between all measures of DFL and coverage ratios than domestic companies. In case of domestic companies, correlation coefficient between coverage ratios and three leverage ratios (TD/TA, TD/SE and TD/CE) are significant. In case of MNCs, correlation coefficient between TIE and LTD/CE is significant.

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