scholarly journals FINANCIAL DISTRESS DI BUMN INDONESIA DAN FAKTOR-FAKTOR YANG MEMPENGARUHI INVESTASI, LEVERAGE DAN CASH FLOW OPERATION TERHADAP FINANCIAL DISTRESS PADA PERUSAHAAN BUMN

2020 ◽  
Vol 3 (2) ◽  
pp. 226-243
Author(s):  
Aries Widya Gunawan ◽  
Aminullah Assagaf ◽  
Nur Sayidah ◽  
Alvy Mulyaningtyas
Keyword(s):  
Cash Flow ◽  
Financial Distress ◽  
Capital Investment ◽  
Control Variable ◽  
Secondary Data ◽  
Managerial Compensation ◽  
Financial Indicators ◽  
Working Capital ◽  
The Government ◽  
Investment Growth

This study aims to analyze the effect of managerial compensation, working capital, investment growth, and cash flow operations on financial distress in state-owned companies. This study uses several independent variables that empirically affect operating cash flow that has an impact on SOE financial distress. This study also uses financial indicators as control variables to limit the influence of factors or other variables outside the independent variable. The control variable used in this study is leverage. The researcher selected secondary data from 2014-2017 from a sample of 19 State-owned enterprises that received subsidies or equity participation from the government. The analytical method used is a statistical approach through the classical assumption test and linear regression model. The results of this study indicate that Working Capital and leverage have an influence on Financial Distress. Management Compensation, Investment Growth, and Cash Flow Operations have no influence on Financial Distress.  

scholarly journals Faktor-Faktor yang Mempengaruhi Financial Distress: Pendekatan Model Springate dan Grover (Studi Empiris pada Badan Usaha Milik Negara Periode 2015-2019)

2021 ◽  
Vol 1 ◽  
pp. 31-45
Author(s):  
Ferdinar Bayu Setiaji Pratama ◽  
Rita Wijayanti
Keyword(s):  
Cash Flow ◽  
Financial Distress ◽  
Capital Investment ◽  
Linear Regression Analysis ◽  
Multiple Linear Regression Analysis ◽  
Managerial Compensation ◽  
Working Capital ◽  
Financial Decline ◽  
Operating Cash Flow ◽  
Investment Growth

Financial distress is a condition in the stage of financial decline that occurs before the occurrence of bankruptcy or liquidation. This study aims to examine the factors that affect financial distress in State-Owned Enterprises (BUMN). The independent variables tested were managerial compensation, working capital, investment growth, operating cash flow, and leverage. Financial distress in this study was measured by the springate method and the grover method. This study selects the sample by purposive sampling method. With the final result as many as 58 samples for 6 years of observation. Research data for the period 2014-2019 was analyzed using multiple linear regression analysis. The results showed that the working capital and leverage variables had an influence on financial distress. Managerial compensation, investment growth, and operating cash flow have no effect on 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

scholarly journals The Role Of Cash Holdings, Working Capital, Dividend Payout On Capital Investment

2018 ◽  
Vol 34 (3) ◽  
pp. 419-426
Author(s):  
Andrew Chan
Keyword(s):  
Cash Flow ◽  
Firm Value ◽  
Capital Investment ◽  
Stock Exchange ◽  
Cash Holdings ◽  
Payout Policy ◽  
Working Capital ◽  
Dividend Payout ◽  
Investment Spending ◽  
The Relationship

An objective of this paper is to investigate the relationship between firms' capital investment spending, cash holdings, and working capital in an expanding Asian financial market.  A sample of publicly traded manufacturing firms on the Hong Kong Stock Exchange was examined during the period 2005-2014. The empirical results provide strong and statistically significant evidence on the effect of cash flow on investment.  Working capital also exhibits significant relationship with capital investment spending, though the relationship is not as strong and significant as that with cash flow and cash holding.  Firms with low dividend payout policy over the sample period depended heavily on cash flow, changes in cash flow and, to a lesser extent, on working capital to finance spending on fixed plant and equipment.  These results suggest that the effect of capital investment spending financed by internal cash flow on firm value may depend on a firm's dividend payout.

scholarly journals Faktor yang Mempengaruhi Tax Avoidance dengan Ukuran Perusahaan sebagai Variabel Kontrol

2021 ◽  
Vol 9 (2) ◽  
pp. 235-244
Author(s):  
Desy Mariani ◽  
Suryani Suryani
Keyword(s):  
Sampling Method ◽  
Stock Exchange ◽  
Linear Regression Analysis ◽  
Control Variable ◽  
Tax Avoidance ◽  
Secondary Data ◽  
Retail Trade ◽  
Company Size ◽  
Sales Growth ◽  
The Government

For companies, taxes are costs that reduce profits. The company wants to pay the minimum tax so that the profit earned by the company does not decrease, while from the government side, tax collection is used to finance the implementation of state development. This difference also causes taxpayers to tend to avoid taxes to reduce their tax burden, so that state revenue from the tax sector is still not maximized. This study aims to determine the factors that affect tax avoidance with company size as a control variable. This study uses a sample of trading, service and investment companies in the wholesale and retail trade sub-sector listed on the Indonesia Stock Exchange for the period 2014-2018. The sampling method used in this study was purposive sampling method, where according to the established criteria, 22 companies were obtained and the data used were secondary data. The analysis technique used in this study is multiple linear regression analysis using the Statistical Product and Service Solutions (SPSS) v.20.0 program. The results show that Leverage, Sales Growth and Company Size have a positive effect on tax avoidance, while liquidity and fixed asset intensity have no effect on tax avoidance, thus company size can control Leverage and Sales Growth to influence tax avoidance.

scholarly journals Model Prediksi Financial Distress Grup Perusahaan Keluarga Di Indonesia Dengan Model Beneish Ratio Index

2020 ◽  
Vol 7 (02) ◽  
pp. 235-246
Author(s):  
Nurina Prawinin Tyas ◽  
Nurmala Ahmar ◽  
M. Ardiansyah Syam
Keyword(s):  
Financial Distress ◽  
Quality Index ◽  
Stock Exchange ◽  
Secondary Data ◽  
Growth Index ◽  
Sales Growth ◽  
Gross Margin ◽  
The Family ◽  
The Government ◽  
Asset Quality

ABSTRACT        This study aims to test and prove the empirical evidence of the Financial Distress Prediction Model of Family Companies in Indonesia with the Beneish Ratio Index. The sample used in this study is a group of family companies in Indonesia which are listed on the Indonesia Stock Exchange with an observation period of 31 December 2014 to 2018. The research method used is a quantitative method with a survey approach for secondary data. The Days Sales in Receivable Index (DSRI), Sales Growth Index (SGI), Sales General and Administrative Index (SGAI), and Leverage Index (LVGI) variables do not differ in the treatment of the Beneish Model components based on the Financial Distress status of the Family Group Company. Variable Gross Margin Index (GMI), Asset Quality Index (AQI), Depreciation Index (DEPI), and Total Accruals to Total Assets Index (TATA) differ in the treatment of the Beneish Model component based on the Financial Distress status of the Family Company Group. This research contributes to the parties concerned with the prediction of financial distress, such as auditors and the government in assessing the potential for financial distress in the company. ABSTRAK         Studi ini bertujuan untuk menguji dan membuktikan bukti empiris Model Prediksi Financial Distress Grup Perusahaan Keluarga Di Indonesia Dengan Beneish Ratio Index. Sampel yang digunakan dalam penelitian ini adalah Grup perusahaan keluarga di Indonesia yang terdaftar di Bursa Efek Indonesia dengan periode pengamatan 31 Desember 2014 hingga 2018. Metode penelitian yang digunakan adalah metode kuantitatif dengan pendekatan survey untuk data sekunder. Variabel Days Sales in Receivable Index (DSRI), Sales Growth Index (SGI), Sales General and Administrative Index (SGAI), dan Leverage Index (LVGI) tidak ada perbedaan perlakuan komponen Beneish Model berdasarkan status Financial Distress pada Grup Perusahaan Keluarga. Variabel Gross Margin Index (GMI), Asset Quality Index (AQI), Depreciation Index (DEPI), dan Total Accruals to Total Assets Index (TATA) ada perbedaan perlakuan komponen Beneish Model berdasarkan status financial distress pada Grup Perusahaan Keluarga. Riset ini memberikan panduan kepada pihak-pihak yang berkepentingan terhadap memprediksi financial distress yang akan terjadi dalam perusahaan ataupun industri, pihak yang berkepentingan seperti Auditor dan Pemerintahan. JEL Classification : G32, M41

scholarly journals EFFECTS OF WORKING CAPITAL CYCLE ON PROFITABILITY OF MANUFACTURING FIRMS IN GHANA

2017 ◽  
Vol 1 (3) ◽  
pp. 95
Author(s):  
Alfonse Editor Kisilu
Keyword(s):  
Research Design ◽  
Small Firms ◽  
Management Practice ◽  
Negative Relationship ◽  
Secondary Data ◽  
Manufacturing Firms ◽  
Sampling Frame ◽  
Working Capital ◽  
Beta Coefficient ◽  
The Government

Purpose: The study was on the effects of working capital cycle on profitability of manufacturing firms in Ghana.Methodology: The research design used in this study was explanatory research design. There are 78 large manufacturing firms in Loan Book of Barclays Bank Ghana.  The population of the study is therefore 78 firms.  The sampling frame was the loan book of Barclays Bank Ghana.  It is for this reason that the study considered 50% of the population to be the sample size. This yielded 39 large manufacturing firms.  The study used secondary data only for the purposes of analysis and drawing of conclusions. Descriptive statistics included mean scores and inferential statistics included regression modeling.Results: Results show that there is a negative relationship between profit before tax and mean debtor’s collection period whose beta coefficients is -1817.81. Results show that there is a negative relationship between profit before tax and mean inventory conversion period whose beta coefficients is -103.762. The mean payable deferral period had a positive relationship with profitability with a beta coefficient of 1097.073. The findings show that there is a negative relationship between profit before tax and working capital conversion cycle with a beta coefficient of -816.198.Policy recommendation: It was recommended that speeding up payments to suppliers might increase profitability because firms often receive a substantial discount for prompt payment.It was also recommended that the government should intervene by way of a legislation that would impose penalty interest for delayed payment of commercial debts. Such a provision would create a level playing field by binding all firms to pay promptly and ease the cash flow problems of small firms, who will be compensated for any overdue payments. It was recommended that the owners of firms be made more aware and trained on the best credit management practice. That way, they could reduce the amount of overdue debt and alleviate the problem.

scholarly journals Impact of Covid-19 on Cooperatives Movement in Rwanda

2020 ◽  
pp. 1-5
Author(s):  
Jean Bosco Harelimana ◽  
◽  
Pacifique Mugwaneza ◽  
Nteze Claude Musabwa ◽  
◽  
...  
Keyword(s):  
Bargaining Power ◽  
Economies Of Scale ◽  
Secondary Data ◽  
New Product ◽  
Economic Transformation ◽  
Descriptive Statistics ◽  
Prevention Measures ◽  
Working Capital ◽  
Reduced Costs ◽  
The Government

Cooperatives play important role in promoting inclusive, sustainable development and economic transformation. Cooperatives can offer significant benefits to their members through the principle of strength in numbers and pooled resources, including increased bargaining power; reduced costs through economies of scale; the ability to obtain goods or services they otherwise would not have access to; the ability to diversify and expand production into new product ranges; the ability to improve product quality through collective investment; and overall increased incomes in accordance with cooperative values and principles. The world now encounters a grim reality, with exponential growth of contagion of COVID-19 pandemic, human lives are being lost and the virus continues to spread rapidly across the globe. Different prevention measures including the confinement were enacted by the government. Cooperatives operations were suspected due to the confinement. This paper examines the impacts of COVID-19 pandemic on cooperatives in Rwanda using descriptive statistics from primary and secondary data collected which helped to draw conclusions on the effect of the pandemic. The results highlight the impacts till now of the pandemic on cooperative formation, income losses for both members and cooperatives, effects on working capital and investment, and key facts on cooperative contributions to support their members.

scholarly journals Financial and Operating Working Capital: Unraveling Obscured Portion of Balance Sheet

2020 ◽  
Vol 6 (2) ◽  
Author(s):  
Kashif Saeed ◽  
Areeba Khan
Keyword(s):  
Cash Flow ◽  
Business Performance ◽  
Stock Exchange ◽  
Balance Sheet ◽  
Secondary Data ◽  
Annual Reports ◽  
Working Capital ◽  
Cash Conversion Cycle ◽  
Internal Cash Flow ◽  
Business Practitioners

ABSTRACT Purpose- The purpose of this study is to provide a new obscured aspect of financial working capital in working capital management, and investigate the association between financial and operating working capital with business performance. This paper also examines the interacting effect of net cash flow on this relationship. The current study introduces a modification in cash conversion cycle (CCC) by taking concealed trade advance payments. Design/methodology/approach- This study employs fixed effect regression model, covering a sample of Automobile sector companies, listed at Pakistan Stock Exchange (PSX) for the period of fourteen years from 2005 to 2018. Secondary data is collected from companies’ financial annual reports, PSX website, and Balance sheet analysis of State Bank of Pakistan (SBP). The study is explanatory and deductive in nature. Financial working capital (FWC) and new measure of operating working capital (OWC) i.e. modified cash conversion cycle (mCCC) is introduced & empirically tested with 252 firm-year observations. Findings- The regression results shows, a convex association between OWC & FWC, with business performance, in dearth of internal cash. However, after taking interacting effect of internal availability of cash, only FWC relation has become concave. The result also shows that mCCC provides a more realistic view of OWC. Research limitations/implications- This study has considered, concealed trade prepayments only, further research could include other components in mCCC. Moreover micro, macro factors and status of the economy such as depression or boom may also affect the results of the research. The findings suggest that managers should separately deal operating & financial working capital. Firms’ performance can be enhanced, if Finance Manager Take account internal cash of the firm. In case of deficiency (sufficiency) of it, he should work to decrease (increase) the investment amount in operating working capital (financial working capital). Overall, the results will be helpful to the financial experts and business practitioner in analyzing, and utilization of their resources. Originality/value- This study adds a new dimension in working capital by separating it into operating and financial working capital.  The study also offers insights into the new knowledge of extension in CCC, role of concealed advance payments and internal cash flow, for class teachers and business practitioners. It will also describe the new avenues for further research in this field.    Key Words:  Financial working capital, Operating working capital, Trade advanced payments and modified cash conversion cycle (mCCC).

Aurora Textile Company

2017 ◽  
pp. 1-14
Author(s):  
Kenneth M. Eades ◽  
Lucas Doe
Keyword(s):  
Cash Flow ◽  
Financial Distress ◽  
Textile Industry ◽  
Capital Investment ◽  
Investment Decision ◽  
Flow Analysis ◽  
Cash Flows ◽  
List Type ◽  
Discounted Cash Flow ◽  
Cost Information

This case asks the student to decide whether Aurora Textile Company can create value by upgrading its spinning machine to produce higher-quality yarn that sells for a higher margin. Cost information allows the student to produce cash-flow projections for both the existing spinning machine and the new machine. The cash flows have many different cost components, including depreciation, the number of days of cotton inventory, and the liability costs associated with returns from retailers. The cost of capital is specified in order to simplify the analysis. The analysis has added complexity, however, owing to the troubled financial condition of both the company and the U.S. textile industry, which is in decline as manufacturers migrate to Asia to benefit from lower manufacturing costs. This begs the question whether management should invest in a declining business or harvest the company by paying out all profits as a dividend to the owners. The case is suitable for students just beginning to learn finance principles, but is also rich enough to use with experienced students and executives. The primary learning points are as follows: The basics of incremental-cash-flow analysis: identifying the cash flows relevant to a capital-investment decision The construction of a side-by-side discounted-cash-flow analysis for a replacement decision How to adapt the NPV decision rule to a troubled or dying industry The effect of financial distress on the NPV calculation The importance of sensitivity analysis to a capital-investment decision

Measuring financial distress of non-bank financial institutions of Bangladesh using Altman’s Z-Score model

2020 ◽  
Vol 13 ◽  
pp. 15-28
Author(s):  
Mohammad Rifat Rahman ◽  
Md. Mufidur Rahman ◽  
Athkia Subat
Keyword(s):  
Financial Institutions ◽  
Financial Distress ◽  
Stock Exchange ◽  
Secondary Data ◽  
Vital Role ◽  
Annual Reports ◽  
Z Score ◽  
Factors Affecting ◽  
Financial Soundness ◽  
The Government

Non-bank financial institutions (NBFIs) are recognized as the fundamental of a financial market as they complement the banking institutions. Since 1981, NBFIs have been playing a vital role in the economic growth of Bangladesh. Unfortunately, in the recent years most of the NBFIs have been found financially distressed. However, few NBFIs that were included in our sample claimed themselves as potential companies with sound financial performance though it was highly criticized. Therefore, the motivation for conducting this study is to examine the financial soundness of selected NBFIs using Altman’s Z score (1995). This study involved 20 NBFIs out of 23 Dhaka Stock Exchange (DSE) listed institutions, which were selected based on information availability by considering A, B and Z categories from 2014 to 2018 period. The secondary data were collected from the annual reports of the selected companies over the period. The findings are as follows: 95% of the 20 NBFIs were in distress zone during the study period and only 5% NBFIs were in safe zone during 2017-2018 period. Therefore, the analysis predicted that within the upcoming years a few of the NBFIs will be approaching bankruptcy. Finally, it is suggested that the government, respective regulatory authority, and policy makers to pay an immediate attention on mitigating the factors affecting the financial distress.

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