Decreasing balance sheet constraints on financial firms

2013 ◽  
pp. 72-88
Keyword(s):  
Balance Sheet ◽  
Financial Firms

scholarly journals Influence of shareholder equity on trade credit demand: The study of non-financial firms in Pakistan

R-Economy ◽  
2021 ◽  
Vol 7 (1) ◽  
pp. 61-67
Author(s):  
Faiza Shah ◽  
◽  
Yumin Liu ◽  
Yasir Shah ◽  
Fadia Shah ◽  
...  
Keyword(s):  
Trade Credit ◽  
Random Effect ◽  
Random Effect Model ◽  
Balance Sheet ◽  
Primary Source ◽  
Financial Statements ◽  
Equity Financing ◽  
Financial Firms ◽  
Effect Model ◽  
Credit Demand

Relevance. Most small-sized firms have little or no access to credit markets, which is why they prefer equity financing and usually pay higher dividends on this equity. When paying higher dividends, these small-sized debt-free firms continue to build a reputation in the markets. Research objective. The analysis focuses on the trade payables that impact shareholder equity. In Pakistan, most of the businesses are small and middle-sized. Most of the Pakistani SMEs have a low capital structure and these enterprises depend on their daily business needs, so equity financing is their primary source of funding. Data and Methods. The data source for our study is the financial statements of non-financial firms (in total, 156 firms) from the balance Sheet Analysis (BSA) and the Financial Statement Analysis (FSA) published by The State Bank of Pakistan (SBP). The financial statements also provide the data listed by the Pakistan Stock Exchange (PSX). The data cover the period from 2001 to 2017. This study primarily relies on the panel data model. The study applied the methods of descriptive analysis, correlation matrix, common regression model, fixed effect model, random effect model and then the Hausman test was performed to choose the best model. Results. The results of the study indicate a positive and significant relationship between shareholder equity and trade credit demand. Conclusion. Many investors require trade credit as a suitable tool for the growth of shareholders of the company. It is also used in many types of business schemes as the shareholder equity factor plays a role in profit generation through the use of trade credit transactions.

scholarly journals Balance Sheet Effects in Colombian Non-Financial Firms

2016 ◽  
Author(s):  
Adolfo Barajas ◽  
Sergio Restrepo ◽  
Roberto Steiner ◽  
Juan Medellln ◽  
CCsar Pabbn
Keyword(s):  
Balance Sheet ◽  
Financial Firms ◽  
Balance Sheet Effects

Corporate Governance and Culture in Banking

2019 ◽  
pp. 130-152 ◽  
Author(s):  
Jens Hagendorff
Keyword(s):  
Corporate Governance ◽  
Executive Compensation ◽  
Corporate Culture ◽  
Balance Sheet ◽  
Shareholder Wealth ◽  
Agency Conflicts ◽  
Executive Pay ◽  
Financial Firms ◽  
The Board Of Directors ◽  
Governance Arrangements

Banks differ from non-financial firms. These differences affect the manner of agency conflicts between the various bank stakeholder groups compared with non-financial firms. However, the main corporate governance arrangements used in the banking industry to mitigate these agency conflicts are largely similar to those of non-financial firms. A case in point is executive compensation. No other major industry has less equity on the balance sheet than banking. However, executive pay in banking is linked to shareholder wealth just as in other industries thus exacerbating existing incentives for bank managers to shift risk. Further, the governance arrangements in banking make the corporate culture prevailing in banks an important subject to study. This chapter reviews the literature on corporate governance in banking with a focus on those aspects of corporate governance in which banks (should) differ from non-financial firms, that is, executive compensation, the composition of the board of directors, and culture in banks. The chapter encourages a more profound rethink of the corporate governance of banks.

scholarly journals Bankruptcy Prediction for Non-Financial Firms of Pakistan

2015 ◽  
Vol 5 (2) ◽  
pp. 26
Author(s):  
Muhammad Sohaib Roomi ◽  
Waqas Ahmad ◽  
Muhammad Ramzan ◽  
Muhammad Zia-ur-Rehman
Keyword(s):  
Stock Exchange ◽  
Balance Sheet ◽  
Sampling Technique ◽  
Bankruptcy Prediction ◽  
Financial Health ◽  
Financial Reports ◽  
Financial Status ◽  
Financial Firms ◽  
Convenience Sampling ◽  
Score Model

In this study we use two models for the measuring of financial status of the non-financial firms which are listed in the Karachi Stock Exchange. The Non-financial companies represent the biggest slice at the Karachi Stock Exchange. The non-financial companies of Pakistan are the total population and sample size is 25 higher and 25 lower capital companies. The technique which used in this study was Convenience sampling technique and all 50 non-financial listed companies at KSE were included to gain deeper insights into this study. The State Bank of Pakistan shows balance sheet analyses of companies, for compiling of data financial reports were used for the years 2007 to 2012. The results of the study showed that Abbas model and Altman’s Z-Score model was a effective tool for checking the financial health of non-financial companies listed at Karachi stock exchange. This study further explores that lower capital firm have more financially distressed companies as compare to high capital  non-financial companies listed at KSE.

scholarly journals Balance Sheet Effects in Colombian Non-Financial Firms

2016 ◽  
Author(s):  
Adolfo Barajas ◽  
Sergio Restrepo ◽  
Roberto Steiner ◽  
Juan Camilo Medellín ◽  
César Pabón
Keyword(s):  
Balance Sheet ◽  
Financial Firms ◽  
Balance Sheet Effects

scholarly journals Crossing the Credit Channel

2020 ◽  
Vol 20 (267) ◽  
Author(s):  
Gareth Anderson ◽  
Ambrogio Cesa-Bianchi
Keyword(s):  
Monetary Policy ◽  
Crucial Role ◽  
Financial Intermediation ◽  
Large Fraction ◽  
Balance Sheet ◽  
Transmission Mechanism ◽  
Credit Spreads ◽  
Credit Channel ◽  
Pronounced Increase ◽  
Financial Firms

Credit spreads rise after a monetary policy tightening, yet spread reactions are heterogeneous across firms. Exploiting information from a panel of corporate bonds matched with balance sheet data for U.S. non-financial firms, we document that firms with high leverage experience a more pronounced increase in credit spreads than firms with low leverage. A large fraction of this increase is due to a component of credit spreads that is in excess of firms' expected default. Our results suggest that frictions in the financial intermediation sector play a crucial role in shaping the transmission mechanism of monetary policy.

Bankruptcy Prediction for Financial Sector of Pakistan: Evaluation of Logit and Discriminant Analysis Approaches

2018 ◽  
Vol 6 (2) ◽  
Author(s):  
Usama Ehsan Khan
Keyword(s):  
Discriminant Analysis ◽  
Balance Sheet ◽  
Bankruptcy Prediction ◽  
High Rate ◽  
Total Asset ◽  
Business Failure ◽  
Multiple Discriminant Analysis ◽  
Financial Firms ◽  
Retained Earnings ◽  
Accounting Ratios

<p>Bankruptcy prediction is one of the core area in finance that is quite rich in empirical and theoretical work. This study compares two models for measuring the financial position of financial firms listed in Karachi Stock Exchange. The study gives a comprehensive review of two models, namely Altman’s [1] Z-score and an O-Score derived from Ohlson [14]. The purpose of this paper is two folded. First to identify unique characteristics of business failure and to compare effective variables responsible for this response. Secondly to compare two popular accounting-based measures. summarize publiclyavailable information about bankruptcy. The sample period for this study is from 2009 to 2015. From the KSE listed financial firms, a total of 40 firms were selected and accounting ratios were extracted from balance sheet analysis reports published by State bank of Pakistan. The empirical results concluded that the logit model has a high rate of classification as compared to multiple discriminant analysis. The model has obtained overall 85.5% accuracy and identified three significant accounting ratios that are: retained earnings to total asset, earnings before income and taxes to the total asset, and current liabilities to total asset. The finding of this study would benefit stakeholders that are affected by bankruptcies. So in order to take an advantage, it is important to understand the phenomenon that causes bankruptcies.</p>

scholarly journals Bondholder reorganization of systemically important financial institutions

2018 ◽  
Vol 10 (2) ◽  
pp. 281-289 ◽  
Author(s):  
Steven D. Gjerstad
Keyword(s):  
Deposit Insurance ◽  
Financial Institution ◽  
Balance Sheet ◽  
Bank Failures ◽  
Content Type ◽  
Balance Sheets ◽  
Financial Firms ◽  
Resolution Process ◽  
Almost All ◽  
Federal Deposit Insurance

Purpose This paper aims to describe a resolution process for faltering financial firms that quickly allocates losses to bondholders and transfers ownership of the firm to them. This process overcomes the most serious flaws in resolution plans submitted by banks under Dodd–Frank Title I and in the Federal Deposit Insurance Corporation (FDIC) receivership procedure in Dodd–Frank Title II by restoring the balance sheet of a failing financial institution and immediately replacing the management and board of directors who allowed its demise. Design/methodology/approach Feasibility of the proposed resolution procedure is assessed by comparing long-term bonds outstanding for the largest American banks just before the 2008 crisis to the capital needed by these banks to restore their balance sheets after their losses prior to and during the crisis. Findings In almost all bank failures, this process would eliminate the need for government involvement beyond court certification of the reorganization. The procedure overcomes the serious incentive distortions and inefficiencies created by bailouts, and avoids the destruction of value and financial market turmoil that would result from the bankruptcies and liquidations that Dodd–Frank requires for distressed and failing banks. Originality/value Title II of the Dodd–Frank Act would require liquidation of any banks that enter into its resolution process. The case of Lehman Brothers indicates the severity of losses to investors that liquidation imposes and the disruption to financial markets and the economy. The procedure developed in this paper would avoid the disruptions that Dodd–Frank requires, preserving core functions of faltering financial firms and maintaining them as going concerns, even in a severe financial crisis.

ANALISIS LAPORAN KEUANGAN UNTUK MENILAI KINERJA KEUANGAN PT. ASTRA AGRO LESTARI Tbk

2019 ◽  
Vol 5 (2) ◽  
pp. 75-88
Author(s):  
M. Shobihin ◽  
Sayekti Suindyah Dwiningwarni ◽  
Supriadi Supriadi
Keyword(s):  
Financial Performance ◽  
Good Condition ◽  
Balance Sheet ◽  
Financial Statements ◽  
Ratio Analysis ◽  
Business Decisions ◽  
Financial Ratio ◽  
Financial Ratio Analysis ◽  
Income Statement ◽  
Quantitative Descriptive

The financial statements serve as a benchmark in assessing the financial performance of the company as the basis for making business decisions. The motivation in conducting this research is to support previous research to see the development condition of one of the oil palm plantation companies. The purpose of this study is to assess the financial performance by using financial ratio analysis and horizontal analysis. The method used in this research is Quantitative Descriptive with analysis design using Term series Analysis. The result of the research based on financial ratio analysis shows the liquidity ratio and solvency ratio in good condition, while the activity ratio and profitability ratio are not good because it is below the industry average of similar companies. Based on horizontal analysis, financial performance fluctuated and influenced internal and external factors such as operational performance and the average price of world palm oil. The limitations of this study are using only two analytical tools and financial statements analyzed only the balance sheet and income statement.

Asset Inspection Management System as a Reliable Inspection/ Monitoring Tool

2020 ◽  
Vol 78 (12) ◽  
pp. 1276-1285
Author(s):  
Shibu John A
Keyword(s):  
Asset Management ◽  
Management System ◽  
Balance Sheet ◽  
Integrity Assessment ◽  
Material Evaluation ◽  
The People ◽  
Physical Assets ◽  
Asset Management System ◽  
On Time Delivery ◽  
Capital Intensive

Enterprise asset management (EAM) systems are used by asset owners and/or operators to manage the maintenance of their physical assets. These assets, including equipment, facilities, vehicles, and infrastructure, need maintenance to sustain their operations. An EAM system provides the means to have less unplanned downtime and extended asset longevity, which offers clear business benefits that improve the profit and loss statement and balance sheet. Particularly for capital-intensive industries, like drilling and exploration, the failure of on-time delivery of critical equipment or processes is disruptive and costs nonproductive time and customer satisfaction. Organizations understand these issues and employ an appropriate asset management system to engineer their asset maintenance and management. An EAM system is needed to manage the people, assets/equipment, and processes. EAMs are used to plan, optimize, execute, and track the needed maintenance activities with associated priorities, skills, materials, tools, and information. Similarly, nondestructive testing (NDT) is used as a tool for integrity assessment of assets in drilling and exploration. The main advantage of using NDT is that the item’s intended use or serviceability is not affected. The selection of a specific technique should be based on knowledge and skills that include design, material processing, and material evaluation. Validating the purpose of this paper, we emphasize the importance of optimizing the asset utilization and serviceability to enhance overall efficiency by integrating EAM software that manages assets, the operation management system (OMS) controlling the processes, and asset inspection management systems (AIMSs).

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