scholarly journals UNTYING EMPIRICAL KNOTS: DETERIORATION OF PROFITABILITY, ECONOMIC FAILURE, AND FINANCIAL INSOLVENCY IN THE PHILIPPINES BEFORE COVID-19 OUTBREAK

2021 ◽  
Vol 26 (1) ◽  
pp. 21-48
Author(s):  
Emmanuel Onsay
Keyword(s):  
Financial Distress ◽  
The Philippines ◽  
Financial Accounting ◽  
Financial Health ◽  
Financial Status ◽  
Z Scores ◽  
Economic Collapse ◽  
Economic Failure ◽  
Result Management ◽  
Solvency Ratio

Corporate bankruptcy has enormous economic ramifications, particularly for investors and creditors of publicly listed companies (PLC). Prior to a corporate collapse, a company's financial status is frequently in jeopardy, and its performance either affirms progress or predicts failure. As a result, management is interested in a technique of determining a company's financial distress. Financial accounting analyses were performed to determine the solvency, liquidity, profitability, and gearing capacity of 136 firms, with 680 economic entries, before CoVid-19 Outbreak. To scrutinise financial distress, the Altman Z-scores and financial zone of discriminations were generated through GB bankruptcy, and PLC bankruptcy model. The link between declining profitability, economic failure, and financial insolvency as indicators of financial distress was examined through panel regression with random factors. Prior to the COVID-19 outbreak, there were no signs of declining profitability, economic collapse, or financial insolvency in the Philippines, according to the findings of the study. Individual components of financial distress and the overall z-score have no statistically meaningful association with financial performance and position markers. As a result, the solvency ratio has little predictive value in forecasting financial distress. The fact that a company has a higher solvency ratio does not also imply that it is less likely to go bankrupt. The findings go counter to classic accounting perspectives and pure managerial research that claim the solvency ratio is always a reliable predictor of financial distress. Finally, the paper examined the financial health of firms and untangled the knots of financial distress.

scholarly journals Financial accounting manipulations and bankruptcy likelihood: A study of Nordic banks

2021 ◽  
Author(s):  
Shab Hundal ◽  
Anne Eskola
Keyword(s):  
Financial Distress ◽  
Secondary Data ◽  
Financial Accounting ◽  
Financial Health ◽  
Z Score ◽  
Broad Perspective ◽  
Management Measures ◽  
Score Model ◽  
High Level ◽  
The Impact

The phenomena of accounting manipulations and bankruptcy likelihood have always been a topic of interest among researchers. The key objective of the current study is to examine the impact of fraudulent accounting practices on the likelihood of bankruptcy, and the performance of firms. Beneish M-score model and Jones model have been applied to evaluate earnings quality, whereas the Altman Z-score model has been used to analyze the level of financial distress. Based on the analysis of secondary data collected from 33 Nordic banks for the period 2011–2018, the findings disclose that Z-score of most of the sample banks has been found to be relatively high thus representing their high level of financial health. The study does not rule out potential earnings management measures applied by the sample banks. Furthermore, earnings manipulations increase the bankruptcy likelihood, especially in case of larger banks. The financial data manipulation practices artificially enhance the financial performance of banks, however, in a broad perspective; such manipulations can trigger potential financial distress

PENGARUH PERPUTARAN PIUTANG DAN SOLVABILITAS TERHADAP KONDISI FINANCIAL DISTRESS PERUSAHAAN MANUFAKTUR SEKTOR GARMEN DAN TEKSTIL DI BURSA EFEK INDONESIA

2018 ◽  
Vol 19 (2) ◽  
pp. 87
Author(s):  
Siska Wulandari
Keyword(s):  
Financial Distress ◽  
Free Market ◽  
Linear Regression Analysis ◽  
Secondary Data ◽  
Multiple Linear Regression Analysis ◽  
Working Capital ◽  
Leverage Ratio ◽  
Ratio Effect ◽  
Waste Bank ◽  
Solvency Ratio

Manufacture Sub Sector Garment And Textile have financial distress condition. Increas of sales is one of choice for company can be competitive in free market. But increase of sales will be followed by the many possibilities of uncollected receivable or the low receivable turnover which can effect forced the company to further provide working capital. One way is to get working capital from a third part or what we call debt.This research aims to determine the effect of receivable turnover and the solvency ratio toward the financial distressThe problems of the research were: 1) is the receivable turnover effect toward financial distress condition on Garmen and textile company Listed on IDX on 2011-2015? 2) is the leverage ratio effect toward financial distress condition on Garmen and textile company Listed on IDX on 2011-2015 ? 3) Are the receivable turnover and solvency ratio effect toward financial distress condition on Garmen and textile company Listed on IDX on 2011-2015?The sample of this research is 11 Manufacture company of sub sector Garmen And Textile were taken by using purposive sampling techniques. This research data used secondary data that getting from literature review. Data were tested using multiple linear regression analysis to determine the effect between one variable with another variables, and the data was then processed using SPSS 22.0 for windows.Result of the research showed that partially, receivables turnover hadn’t a significant effect toward  the financial distress. Partially, solvency ratio (Debt to Asset) had a significant influence toward financial distress Simultaneously, receivable turnover and solvency ratio had a significant effect toward financial distress. Kata kunci:Waste Bank, Waste Bank Management, Waste Bank Basic Concepts, Economic Improvement of the Family

Are Disasters Disastrous to Nonprofit Organizations? Investigating the Financial Implications of Hurricane Sandy for Nonprofits

2021 ◽  
pp. 089976402199845
Author(s):  
Xintong Chen
Keyword(s):  
Logistic Regression ◽  
Regression Model ◽  
Nonprofit Organizations ◽  
Financial Distress ◽  
Logistic Regression Model ◽  
Hurricane Sandy ◽  
Financial Health ◽  
External Funds

Nonprofit organizations are sensitive to external disasters due to their high reliance on external funds and volunteers. In this study, I investigate how disasters affect the financial health of nonprofits and what factors make them more vulnerable within the context of disaster. The sample in this study includes nonprofits directly and indirectly affected by Hurricane Sandy. Using a logistic regression model, I explore if the disaster contributed to the likelihood of a nonprofit experiencing financial distress. Disaster, as an external shock, increases risks of nonprofits experiencing financial distress, especially for smaller nonprofits and nonprofits not relying on commercial revenue.

scholarly journals Using Piotroski F-Score for Assessing Financial Health: Evidence from Leading Indian Private Banks

2021 ◽  
Vol 8 (S1-Feb) ◽  
pp. 117-132
Author(s):  
S Rangapriya ◽  
J Meenakumari
Keyword(s):  
Financial Distress ◽  
Investment Decision ◽  
Relative Strength ◽  
Valuable Insight ◽  
Financial Health ◽  
Investment Decision Making ◽  
Financial Strength ◽  
Private Banks ◽  
Level Analysis

This research investigates the efficacy of Piotroski F-score to screen firms with good financial health and to identify early signs of financial distress in Indian banking stocks. This study complements existing empirical evidence which indicate that the venerable model can provide valuable insight for investment decision making and risk management.The evidence is drawn from valuation signals across leading private banks in India for a period ranging from 2014-2020. Piotroski F-score evaluates companies with a discrete number between zero and nine, the score facilitates determination of financial strength of the company. Higher score indicates better financial health and viceversa. The F-score is calculated as a sum of criteria which evaluates profitability signals, leverage and liquidity, sources of funds and operating efficiencies. In this study, each of these ratios have been analyzed to gain valuable insight on the banks (company-level). Analysis of Variance (ANOVA) of various ratios, ascertains intensity of relationship across banks (industry-level). This can help manage exposure in the portfolio as per the economic environment.The Piotroski F-score evaluates the generic financial health of the firm and indicates the direction in which the firm is headed. By studying individual factors, relative strength can be assessed. Piotroski F-score ranged between 0-7 for all the banks under study, indicating that none of them were a ‘compellingbuy’ (score 8 or 9) over the seven-year horizon. Some banks have consistently shown depleting F-score over at least 3 years, this can be interpreted as a signal of financial distress. It is evident that consistent monitoring of F-score empowers pro-active risk management.This work attempts to introduce Piotroski F-score as an integral valuation metric in evaluating Indian banking stocks. F-score can be used for initial screening, it’s consistent monitoring can facilitate optimized returns at risk-adjusted levels.

scholarly journals Family Businesses in Global Economy and Evaluating their Financial Health Using Bankruptcy Models

2021 ◽  
Vol 129 ◽  
pp. 03031
Author(s):  
Maria Truchlikova
Keyword(s):  
Financial Distress ◽  
Global Economy ◽  
Agricultural Sector ◽  
Prediction Models ◽  
Predictive Accuracy ◽  
Value Added ◽  
Business Environment ◽  
Bankruptcy Prediction ◽  
Family Businesses ◽  
Financial Health

Research background: Predicting and assessing financial health should be one of the most important activities for each business especially in context of turbulent business environment and global economy. The financial sustainability of family businesses has a direct and significant influence on the development and growth of the economy because they still represent the backbone of the economy and play an important role in national economies worldwide accounting. Purpose of the article: We used in this article the financial distress and bankruptcy prediction models for assessing financial status of family businesses in agricultural sector. The aim of the paper is to compare models developed by using three different methods to identify a model with the highest predictive accuracy of financial distress and assess financial health. Methods: The data was obtained from Finstat database. For assessing the financial health of selected family businesses bankruptcy models were used: Chrastinova’s CH-Index, Gurcik’s G-Index (defined for Slovak agricultural enterprises) and Altman Z-score. Findings & Value added: This article summarizes existing models and compares results of assessing financial health of family businesses using three different models.

FORTY ACRES AND A CARABAO: T. THOMAS FORTUNE, NEWSPAPERS, AND THE PACIFIC'S UNSTABLE COLOR LINES, 1902–03

2017 ◽  
Vol 17 (1) ◽  
pp. 98-120 ◽  
Author(s):  
Brian Shott
Keyword(s):  
African American ◽  
Financial Distress ◽  
Jim Crow ◽  
The Philippines ◽  
Tuskegee Institute ◽  
Recent Scholarship ◽  
Roosevelt Administration ◽  
Ethnic Newspapers ◽  
Planter Class ◽  
American Labor

In late 1902, exhaustion, financial distress, and the desire for a political appointment—combined with aspirations to serve as a broker for the export of African American labor abroad—led famed African American journalist T. Thomas Fortune to secure a temporary appointment with the Roosevelt administration to investigate trade and labor in Hawaii and the Philippines. In Hawaii, Fortune was fêted by the planter class, and allied himself publicly with the educational and political philosophies of Booker T. Washington. His hopes for black emigration and land ownership, however, were vigorously opposed by most newspapers connected to the oligarchy. Hawaii's robust in-language indigenous and ethnic newspapers, meanwhile, voiced their own position on black labor. In Manila, a fiercely entrepreneurial and militaristic American press attacked Fortune. Recent scholarship ties Washington's Tuskegee Institute to a kind of “Jim Crow colonialism” abroad. An in-depth look at Fortune's journey both supports and troubles such a view. Both men hoped U.S. “expansion,” and African American participation in it, might expose not only the power of race, but also its instability and vulnerability; Fortune, in particular, saw newspapers as vital to this task.

Financial Distress Study Based on PSO K-Means Clustering Algorithm and Rough Set Theory

2013 ◽  
Vol 411-414 ◽  
pp. 2377-2383 ◽  
Author(s):  
Peng Wu ◽  
Cheng Liu
Keyword(s):  
Decision Making ◽  
Set Theory ◽  
Rough Set ◽  
Financial Distress ◽  
Clustering Algorithm ◽  
Rough Set Theory ◽  
Financial Indicators ◽  
Financial Status ◽  
Level Data ◽  
Research Objects

The traditional financial distress method normally divided samples into two categories by healthy and bankruptcy. And the financial indicators are typically chosen without using a systematic and reasonable theory. To be more realistic, this paper selected all the companies in a certain industry as the research objects. Twenty-one financial indicators were primarily chosen as the condition attributes, reduction set was obtained by matrix reduction identification based on rough set theory. Then PSO-based clustering algorithm K-means was used to divide subjects into 5 categories of different financial status. The decision-making table was formed with the reduction set using the classification as a decision attribute. Finally, we tested the reasonableness of the classification and generated early warning rules together with rough set theory to evaluate the financial status of listed companies. The results showed that PSO-based K-means algorithm was able to reasonably classify companies, at the same time to overcome the subjective impacts in the artificial measure of financial crisis level. Data generated using this method agreed with the rough set theory for up to 87.0%, thus proving this method to be effective and feasible.

scholarly journals Impacts of financial distress on real and accrual earnings management

2018 ◽  
Vol 22 (2) ◽  
pp. 222
Author(s):  
Danella Rachel Muljono ◽  
Kim Sung Suk
Keyword(s):  
Earnings Management ◽  
Financial Distress ◽  
Listed Companies ◽  
Production Costs ◽  
The Other ◽  
Real Earnings Management ◽  
Financial Health ◽  
Other Hand ◽  
Management Approaches ◽  
The Impact

This research investigates the impact of financial distress on the magnitude of different earnings management approaches, namely real earnings management and accruals earnings management. This research utilizes a total of 2002 firm-year observations from 259 publicly-listed companies and 20 sub-industries in Indonesia from the year 2005 to 2014. Financial distress causes a significant increase of real earnings management and a significant decrease of accruals earnings management. It means that the healthier the company, the bigger the magnitude of real earnings management that is conducted through managing production costs and discretionary expenses. On the other hand, the lower the financial health of the company, the bigger the magnitude of accruals earnings management that is conducted through managing discretionary component of accruals.

scholarly journals Effect of the legal system country of European commercial banks on the financial distress

2016 ◽  
Vol 4 (2) ◽  
pp. 168
Author(s):  
Nizar Baklouti ◽  
Frédéric Gautier ◽  
François Aubert
Keyword(s):  
European Union ◽  
Corporate Governance ◽  
Legal System ◽  
Financial Distress ◽  
Commercial Banks ◽  
Common Law ◽  
Civil Law ◽  
The European Union ◽  
Financial Health ◽  
The Relationship

This study examines the effect of the legal system on the governance of banks and hence on financial distress. We compare corporate governance to the legal system in 18 countries of the European Union to explain the relationship between financial distress and bank governance. Using a sample of 147 commercial banks, we find that the effect of the legal system really counts. The results also suggest that banks operating in common law and civil law countries tend the concentration of ownership and board size to the effect of increasing the likelihood of financial distress. This study contributes to research in the governance of enterprise to provide empirical evidence that the legal system has the power to influence the financial health of banks.

scholarly journals Environmental Accounting Disclosure in ASEAN Countries

2017 ◽  
Vol 7 (1) ◽  
pp. 107
Author(s):  
Haqi Fadilah
Keyword(s):  
The Philippines ◽  
Environmental Accounting ◽  
Financial Accounting ◽  
Accounting Disclosure ◽  
The Public ◽  
Significant Difference ◽  
The Difference ◽  
Asean Countries ◽  
Operational Activities ◽  
Impact Problems

This study aims to determine whether there is a difference between the scores of country-based environmental accounting disclosure (in the ASEAN region) and industrybased environmental accounting disclosure (in real estate, forest/agriculture, consumer goods, hospitals, energy, and chemicals/pharmaceuticals). The research method used is One-Way ANOVA difference test. The results show that there is a difference in the scores of country-based environmental accounting disclosure. The difference is between Indonesia and Singapore and between Indonesia and the Philippines. Furthermore, there is no significant difference in the scores of industry-based environmental accounting disclosure, as well as when viewed from each of ASEAN countries. Each country needs to have more stringent regulations and policies to require each company to present the environmental accounting disclosure in the annual report or sustainability report as a form of corporate legitimacy to the public. In addition, there should be a revision of the nature of the environmental accounting disclosure in the financial accounting standards, from voluntary to mandatory. It is intended that every company of various types of industries really pay attention to the environmental impact problems arising from its operational activities.

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