scholarly journals Factors affecting financial distress: The case of Malaysian public listed firms

2011 ◽  
Vol 8 (4) ◽  
pp. 345-351 ◽  
Author(s):  
Chan Kok Thim ◽  
Yap Voon Choong ◽  
Chai Shin Nee
Keyword(s):  
Financial Distress ◽  
Positive Relationship ◽  
Negative Relationship ◽  
Factors Affecting ◽  
Corporate Managers ◽  
Listed Firms ◽  
Coverage Ratio ◽  
Dependent Variables ◽  
Equity Ratio

A sample of 101 companies is selected randomly from Bursa Malaysia during the period 2005-2009 where two models are used to analyze the relationships between financial distress and firms’ characteristics and risk. The dependent variables are long-term debt to total equity ratio and short-term debt to total equity ratio. The independent variables are profitability, liquidity, firm size, solvency, growth and risk. Size is found to be significant and has a positive relationship with financial distress. Interest coverage ratio has a positive relationship with financial distress, while growth of operating profits has a negative relationship with financial distress. Corporate managers should use these indicators to detect early signs of financial distress and take innovative actions to prevent such occurrences.

scholarly journals Financial Distress and Firm Performance: Evidence from COVID-19.

2021 ◽  
Vol 5 (1) ◽  
pp. 108-122
Author(s):  
Christine Kah Shu Teoh
Keyword(s):  
Firm Performance ◽  
Financial Distress ◽  
Negative Relationship ◽  
Debt Ratio ◽  
Return On Assets ◽  
Listed Firms ◽  
Significant Negative Relationship ◽  
Equity Ratio ◽  
The Impact ◽  
Return Value

This study is dedicated to discovering the impact of COVID-19 on Malaysia’s plantation industry firms.  This paper uses quarterly data from annual report of 39 listed firms from Malaysia from 2018 to 2020. The variables to measure financial distress are debt ratio and debt-to-equity ratio while the measurement for firm performance is return on assets. The findings shows that there is a significant negative relationship between debt-to-equity ratio on firm performance. This indicates that the increase in debt-to-equity ratio results in a significant decrease in return on total assets. On the other hand, positive correlation exists between debt ratio and firm performance. This means that an increase in debt ratio results in an increase in the return value of total assets.      

scholarly journals Earnings Management to Avoid Financial Distress and Improve Profitability: Evidence from Jordan

2018 ◽  
Vol 11 (2) ◽  
pp. 222 ◽  
Author(s):  
Mohammad M. Humeedat
Keyword(s):  
Earnings Management ◽  
Financial Distress ◽  
Positive Relationship ◽  
Stock Exchange ◽  
Control Variable ◽  
Negative Relationship ◽  
Discretionary Accruals ◽  
Cross Sectional ◽  
Entire Study ◽  
Equity Ratio

Due to unstable economic and political conditions, many companies in the Middle East are undergoing various financial distress and decline in profitability. This paper examines the role of earnings management to avoid financial distress and improve profitability in 58 industrial corporations listed on Amman Stock Exchange for a period of 2011 to 2016, which constitutes 89% of the whole population. The total number of observations is 413 for the entire study period. The study uses a cross-sectional Jones model that was modified by (Kothari, Leone, and Wasley, 2005); to measuring discretionary accruals that used as a proxy for earnings management.The empirical results indicate that earning management is not affected by the Altman’s Z-score index, but it has a positive relationship with debt to equity ratio. This study also shows a positive relationship between earnings per share, returns on equity, and earnings management. Regarding the control variable, we found a negative relationship between cash flow from operation and discretionary accruals.

Pengaruh Financial Leverage terhadap Financial Performance pada Sektor Industri Manufaktur yang Terdaftar di Bursa Efek Indonesia (BEI) Periode 2015

2018 ◽  
Vol 9 (2) ◽  
pp. 33-48
Author(s):  
Rivaldy Februansyah ◽  
Ika Yanuarti
Keyword(s):  
Financial Performance ◽  
Manufacturing Sector ◽  
Linear Regression Analysis ◽  
The Other ◽  
Debt Ratio ◽  
Financial Leverage ◽  
Coverage Ratio ◽  
Equity Ratio ◽  
Internal Fund

The manufacturing sector is one of the most dominant economic sectors in in achieving growth and development in Indonesia. It needs adequate fund to develop its business. The sources of fund are from internal and external. The firm usually optimized the usage of internal fund prior to external fund. The internal fund comes from equity while the external funds are from debt and stock. Debt is also known as financial leverage. There is a phenomenon that the usage of debt increased the firm’s financial performance, since interest on debt could lower the payment of tax (tax shield). On the other side, the higher the financial leverage the higher the risk of bankruptcy. This research aims to analyze whether financial leverage has an influence on financial performance in the manufacturing sector listed on the Indonesia Stock Exchange (IDX) period 2015. The method of analysis used in this research is multiple linear regression analysis. This research uses quantitative approach with a sample of 140 listed companies in the manufacturing industry. The firm’s financial performance could be measured by the financial ratios. Financial Leverage ratios are ratios that measure the ability of firm’s to meet its financial obligation and the level of usage debt as compared to equity. There are several financial leverage ratios that used in this research, such as Debt Ratio (DR), Debt to Equity Ratio (DER), Interest Coverage Ratio (ICR), and Long Term Debt Ratio (LTDR). Financial performance indicates the ability of firm to generate profit and measured by Profitability Ratio. Return on Asset (ROA) is one of the Profitability Ratio. The statistical result shows that Debt Ratio (DR) negatively affect Return on Asset (ROA) and Interest Coverage Ratio (ICR) positively affect Return on Asset (ROA). Meanwhile, Debt to Equity Ratio (DER) and Long Term Debt Ratio (LTDR) did not affect Return on Asset (ROA). On the other hand, result shows that Debt Ratio (DR), Debt to Equity Ratio (DER), Interest Coverage Ratio (ICR), and Long Term Debt Ratio (LTDR) affect Return on Asset (ROA) simultaneously. Keywords: Financial Leverage, Debt Ratio (DR), Debt to Equity Ratio (DER), Interest Coverage Ratio (ICR), Long Term Debt Ratio (LTDR), Financial Performance, Return on Assets (ROA)

Fixing the Core, Earnings Management, and Sustainable Emergence From Financial Distress: Evidence From China’s Special Treatment System

2021 ◽  
pp. 0148558X2110511
Author(s):  
Jiao Jing ◽  
Kenneth Leung ◽  
Jeffrey Ng ◽  
Janus Jian Zhang
Keyword(s):  
Earnings Management ◽  
Financial Distress ◽  
Operating Efficiency ◽  
Special Treatment ◽  
Multiple Stakeholders ◽  
Listed Firms ◽  
The Core ◽  
Distressed Firms ◽  
Core Earnings

Throughout their business life cycle, firms may experience financial distress. Successful emergence from such distress is important to their multiple stakeholders. Using a sample of publicly listed firms in China that emerged from Special Treatment (an indicator of delisting risk), we focus on the key actions such firms take prior to emergence, namely, fixing the core of the business and earnings management. We examine how these actions are associated with sustainable emergence, which we define as emergence from Special Treatment without reentry in the next 5 years. Consistent with the expectation that shortcut fixes to problems do not yield a long-term solution, we find that repairing the core of the business by improving operating efficiency is positively associated with sustainable emergence, whereas earnings management is negatively associated with it. We also find that the positive (negative) association between fixing the core (earnings management) and sustainable emergence is pronounced only for state-owned enterprises. Our article adds to the limited literature that examines issues related to distressed firms’ sustainable turnaround.

Determination of factors affecting cognitive function in patients with chronic kidney disease stage 5

2021 ◽  
Vol 1 (29) ◽  
pp. 21-27
Author(s):  
S. A. Smakotina ◽  
Yu. A. Bokhanov
Keyword(s):  
Chronic Kidney Disease ◽  
Kidney Disease ◽  
Positive Relationship ◽  
Negative Relationship ◽  
Factors Affecting ◽  
Situational Anxiety ◽  
The Status ◽  
Visual Motor ◽  
Relationship Of

Objective. Patients with stage 5 chronic kidney disease.Study objective. Determination of factors affecting cognitive function in patients with CKD-5.Design and methods. The study included young and middle-aged patients (18 to 60 years old) (n = 40), there is a terminal stage of chronic kidney disease (CKD). Exclusion criteria: history of diseases of the central nervous system, brain injury, episodes of cerebrovascular accident with severity, coronary artery disease, chronic heart failure, pregnancy, abuse of alcohol, refusal to participate in the study. In a previous work, patient examination data were obtained on the Status PF hardware complex. Neurodynamic indicators were estimated, including the determination of the time of a simple visual-motor reaction (MTCM) and a complex visual-motor reaction (MPSM), reaction to a moving object (RDO), memory and attention. Using Spearman’s correlation analysis, we evaluated the impact on cognitive functions of a number of factors, presumably related to neurodynamics. The following factors were selected: age, creatinine level, NSE and S100 proteins, hemoglobin level, Beck’s depression points, indicators of personal and situational anxiety.Results. All patients examined on the Status PF software package had mild cognitive impairment in terms of neurodynamics, attention, and memory. The average positive relationship between the level of depression and various indicators of RDO was established: with RDO_average (ρ = 0.405; p = 0.018), with RDO_total delay (ρ = 0.540; p < 0.001), with RDO_average delay (ρ = 0.421; p = 0.007), as well as weak positive – with CEMR average exposure (ρ = 0.358; p = 0.023). An average positive relationship of creatinine level with RDO_O (ρ = 0.438; p = 0.005) is noted. A weak positive relationship between the level of personal anxiety and RDO_total delay (ρ = 0.334; p = 0.035) was revealed. The average negative relationship between hemoglobin level and RDO_total delay (ρ = –0.535; p < 0.001) was revealed. A weak positive relationship between situational anxiety and SEMR is determined by the number of errors (ρ = 0.364; p = 0.021), as well as a weak negative one with the attention volume (ρ = –0.357; p = 0.024). A weak negative relationship of age with visual memory per word was revealed (ρ = –0.362; p = 0.022).Domain of usage. Outpatient and hospital treatment stages of patients with chronic kidney disease case management

scholarly journals Capital Structure and Firm Performance in Nigerian-Listed Companies

2016 ◽  
Vol 8 (3(J)) ◽  
pp. 54-74 ◽  
Author(s):  
Matthew Adeolu Abata ◽  
Stephen Oseko Migiro
Keyword(s):  
Firm Performance ◽  
Capital Structure ◽  
Negative Relationship ◽  
Debt Financing ◽  
Descriptive Statistics ◽  
The Other ◽  
Listed Firms ◽  
Business Failures ◽  
The Relationship

a number of business failures have not been reported in Nigeria arising from inability to payback nor does service debts .This paper empirically investigate the relationship between capital structure and firm performance in the Nigerian listed firms. A sample of 30listed firms out of a population of 173 were examined from 2005 to 2014 using multiple regression tools. Two hypotheses were formulated and tested using descriptive statistics and an econometric panel data technique to analyze the gathered data. An insignificantly negative correlation was found between financial leverage and ROA on one hand and a significantly negative relationship between debt/equity mix and ROE on the other hand. It is therefore recommended that firms should use long term liabilities to finance firm’s activities and mix debt/equity appropriately by ensuring that debt financing ratio is lower to enhance corporate performance and survival.

scholarly journals Impact Of Firm Specific Factors On Capital Structure Decision: An Empirical Study Of Albanian Firms.

2013 ◽  
Vol 2 (4) ◽  
pp. 135 ◽  
Author(s):  
Anila Çekrezi
Keyword(s):  
Capital Structure ◽  
Return On Assets ◽  
Balance Sheets ◽  
Listed Firms ◽  
Natural Logarithm ◽  
Total Debt ◽  
Dependent Variables ◽  
Specific Factors ◽  
The Impact

This paper attempts to explore the impact of firm specific factors on capital structuredecision for a sample of 65 non- listed firms, which operate in Albania, over the period2008-2011.In this paper are used three capital structure measures ; short –term debt tototal assets (STDA), long- term debt to total assets (LTDA) and total debt to total assets(TDTA) as dependent variables and four dependent variables: tangibility(TANG),liquidity (LIQ), profitability(ROA=return on assets) and size (SIZE). The investigationuses panel data procedure and the data are taken from balance sheets and include onlyaccounting measures on the firm’s leverage. This study found that tangibility (the ratio offixed assets to total assets), liquidity (the ratio of current assets to current liabilities)profitability (the ratio of earnings after taxes to total assets) and size (natural logarithm oftotal assets) have a significant impact on leverage. Also empirical evidence reveals asignificant negative relation of ROA to leverage and a significant positive relation ofSIZE to leverage. And the second objective of this study is to identify the impact ofindustry classification on firm’s leverage, using a dummy variable for the trade sector. Soone of the hypothesis tested is if financial leverage is independent of industryclassification. Results reveal that long term debt to total assets and total debt to totalassets ratios are significantly different across Albanian industries.

scholarly journals Leverage and Corporate Financial Distress in Nigeria: A Panel Data Analysis

2019 ◽  
Vol 3 (2) ◽  
pp. 26-38 ◽  
Author(s):  
Lucky Anyike Lucky ◽  
Agilebu Ogechi Michael
Keyword(s):  
Financial Distress ◽  
Manufacturing Firms ◽  
Equity Capital ◽  
Fixed Effect ◽  
Z Score ◽  
Financial Leverage ◽  
Total Debt ◽  
Equity Ratio ◽  
Positive Effect

This study examined the effect leverage on corporate financial distress of quoted manufacturing firms in Nigeria. The objective is to examine if financial leverage have any effect on financial distress of the Nigeria firms. Cross sectional data was sourced from financial statement of ten quoted manufacturing firms. Z-Score and Changes in operating profits was proxy for corporate financial distress while debt equity ratio, short, long term debt and total debt to total assets were proxy for leverage. After cross examination of the validity of the pooled effect, fixed effect and the random effect, the study accepts the fixed effect model.  Findings reveal that financial leverage have positive effect on financial distress measured by the z-score while total debt ratio and debt equity ratio have positive effect on financial distress measured by changes on operating profits while  short term debt and long term debt have negative effect on operating profits. From the regression summary, the study concludes that leverage have significant effect on corporate financial distress. We recommend that Financial structure of the manufacturing firms ought to be adequately planned to safeguard the interest of the equity holders, shareholders and financial requirements of the firm and the firms should formulate policies of increasing its equity capital as oppose to debt and that Implementable investment policies should be formulated and the business environment should be well examined. Recognizing faults of investment might be paramount to develop the business’s financial performance, since it specifies the loopholes which corrective decision can be applied.

scholarly journals The effect of earnings management through assets sales on Canadian stocks

2009 ◽  
Vol 6 (4) ◽  
pp. 218-233 ◽  
Author(s):  
Said Elfakhani ◽  
Ola Kurdi
Keyword(s):  
Corporate Governance ◽  
Earnings Management ◽  
Positive Relationship ◽  
Negative Relationship ◽  
Asset Sales ◽  
Earnings Per Share ◽  
Fixed Assets ◽  
Earnings Smoothing ◽  
Equity Ratio ◽  
Bonus Plans

This paper tests the earnings-smoothing and the debt-equity hypotheses using a sample of Canadian firms engaging in sales of long-lived assets and investments assets. findings show there is a negative relationship between income from asset sales and change in earnings per share exclusive of income from asset sales, as well as a positive relationship between leverage (proxied by debt-equity ratio) and income from asset sales. Yet, Canadian firms also report zero income or losses more often than gains as opposed to mostly gains from such sales reported by US firms, suggesting that they may be using asset sales proceeds for other corporate governance-related reasons than earnings smoothing, including Canadian tax policies (when selling fixed-assets), liquidity needs, avoidance of debt covenants violation, and level of management bonus plans. We also notice some differences between Canadian firms and their US counterparts that may explain some differences in their results.

scholarly journals Liquidity, Growth and Profitability of Non-financial Public Listed Malaysia: A Malaysian Evidence

2019 ◽  
Vol 10 (3) ◽  
pp. 194
Author(s):  
Mazurina Mohd Ali ◽  
Nik Noor Ayu Nik Hussin ◽  
Erlane K Ghani
Keyword(s):  
Firm Growth ◽  
Positive Relationship ◽  
Negative Relationship ◽  
Sustainable Growth ◽  
Return On Equity ◽  
Listed Firms ◽  
Financial Firms ◽  
Strong Positive Relationship ◽  
Sustainable Growth Rate ◽  
The Relationship

This study examines the relationship between liquidity, growth and profitability of non-financial firms listed on the Bursa Malaysia. Specifically, this study examines the relationship between liquidity and growth on profitability for 50 non-financial public listed firms in Malaysia. Using panel data technique on 250 observations across a five-year period, this study shows that liquidity has a strong positive relationship with profitability in terms of return on asset of the firms. However, liquidity in terms of quick ratio has no impact on profitability. This study also shows that firm growth in terms of sales growth has a negative relationship with profitability. However, this study shows that liquidity and growth in general do not influence profitability in terms of return on equity, although the result shows that sustainable growth rate has a positive relationship on profitability. This study highlights the importance of these measures in measuring performance. The findings in this study provide guidelines to the firms on the measures that best to be used in evaluating performance so that appropriate strategies can be adopted to increase performance.

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