INFLUENCE OF LIQUIDITY ON FIRM PROFITABILITY, A CASE OF INVESTMENT FIRMS LISTED IN NAIROBI SECURITIES EXCHANGE (NSE), KENYA

2021 ◽  
pp. 148-161
Author(s):  
Joshua Mogaka
Keyword(s):  
Significant Positive Correlation ◽  
Secondary Data ◽  
Sampling Technique ◽  
Annual Reports ◽  
Current Ratio ◽  
Positive Correlation ◽  
Firm Profitability ◽  
Margin Of Safety ◽  
Investment Firm ◽  
Acid Test

ABSTRACT Liquidity and firm profitability are the critical indicators of the performance of firms in any given sector. Liquidity ratios such as current ratio, cash ratio and quick acid test ratio are used to measure the ability of a firm and meet its short-term maturing obligations. Margin of safety is determined by the level of the ratio. Profitability ratio are concerned with the relative profit and efficiency of utilization of service resources of a business. This study was guided by three specific objectives; the correlation between the current ratio and profitability of investment firms listed in (NSE),Kenya, the correlation between the quick acid test ratio and profitability of investment firms listed in (NSE),Kenya and the correlation between the cash ratio on profitability of investment firm listed in NSE Kenya .Return on Assets (ROA) and Return on Investment (ROI) were used as measures of the performance of listed investment firms in (NSE),Kenya. The study adopted a descriptive research design. The population of the study consisted all the investment firms listed in (NSE).The sampling technique was non-probability sampling technique for the all the investment firms listed in (NSE).The secondary data in the form of the annual reports and Accounts for the years 2014-2018 were be used. Simple correlation analysis was used to test the hypothesis at 10% level of significance. Analysis of data was tabulated and presented using frequency tables' percentages and explanations. A multi linear regression model was used to establish the relationship between independent and Dependent variables. The overall findings of the study indicated that: There is no significant positive correlation .between cash ratio and profitability; there was no definite significant correlation between acid-test ratio and profitability; there was a significant positive correlation between current ratio and profitability. The researcher recommends that corporate entities should not pursue extreme liquidity policies at the expense of their profitability, that is, they should strike a balance between Liquidity and profitability. Key Words: Liquidity, Profitability, Performance, Margin of Safety, ROA, ROI

scholarly journals Pengaruh Likuiditas, Leverage, Profitabilitas, dan Ukuran Perusahaan terhadap Financial Distress di Sektor Trade, Service, and Invesment

2021 ◽  
Vol 9 (3) ◽  
pp. 1227-1240
Author(s):  
Hasivatus Sariroh
Keyword(s):  
Firm Size ◽  
Financial Distress ◽  
Ordinal Data ◽  
Stock Exchange ◽  
Secondary Data ◽  
Sampling Technique ◽  
Annual Reports ◽  
Return On Assets ◽  
Current Ratio ◽  
Independent Variables

This study is a quantitative study that aims to determine the effect of the current ratio, debt to asset ratio, return on assets, and firm size on financial distress. Logistic regression method was used to test all relationships between independent variables and dependent variables with nominal/ordinal data scales. The dependent variable in this study is financial distress. The independent variables in this study are liquidity, leverage, profitability and firm size. This study uses secondary data from annual reports of trading, service, and investment companies listed on the Indonesia Stock Exchange from 2016 to 2018. The population used is companies in the trade, services, and investment sectors listed on the Indonesia Stock Exchange (IDX). from 2016 to 2018 with a total of 162 companies selected using purposive sampling technique. The results of hypothesis testing indicate that the current ratio, debt to asset ratio, return on assets, and firm size have no effect on the company's financial distress. From research conducted by researchers, for management to be used as a basis to take corrective actions if there are indications that the company experiencing financial distress. For investors, to be used as a basis in making the right decision to invest in a company.

scholarly journals Pengaruh Current Ratio, Inventory Turnover dan Debt to Equity terhadap Return on Asset

2021 ◽  
Vol 4 (2) ◽  
pp. 974-984
Author(s):  
Sindik Widati ◽  
Tania Dwi Hartini
Keyword(s):  
Stock Exchange ◽  
Linear Regression Analysis ◽  
Sample Selection ◽  
Secondary Data ◽  
Sampling Technique ◽  
Multiple Linear Regression Analysis ◽  
Annual Reports ◽  
Current Ratio ◽  
Inventory Turnover ◽  
Asset Inventory

This study aims to determine the effect of Current Ratio, Inventory Turnover and Debt to Equity on Return on Asset Practice in Property and Real Estate companies listed on the Indonesia Stock Exchange period 2017-2019. The research method used in this study is a quantitative method. The data used are secondary data in the form of financial statements and annual reports. The sampling technique in this study was purposive sampling method in which sample selection was based on certain criteria. The study population used was 64, the research sample of 24 companies. The analysis technique in this study uses multiple linear regression analysis. The analysis shows that Current Ratio do not affect the Return on Asset, Inventory Turnover do not affect the Return on Asset and Debt to Equity do not affect the Return on Asset.

scholarly journals The Influence of Liquidity, Leverage, Company Size and Profitability on Financial Distress

2021 ◽  
pp. 11-17
Author(s):  
Andi Runis ◽  
Dedy Samsul Arifin ◽  
Arifuddin Masud ◽  
Ummy Kalsum
Keyword(s):  
Financial Distress ◽  
Panel Data Analysis ◽  
Secondary Data ◽  
Sampling Technique ◽  
Annual Reports ◽  
Company Size ◽  
Return On Assets ◽  
Current Ratio ◽  
Financial Reports ◽  
Equity Ratio

This study aims to empirically examine the factors that influence Financial Distress in Property and Real Estate Companies. This study was tested with four independent variables, namely Liquidity (Current Ratio), Leverage (Debt Equity Ratio), Firm Size (ln of Total Assets), and Profitability (Return on Assets) using purposive sampling technique the authors chose seventeen companies as samples. This study uses panel data analysis obtained from financial reports and Annual Reports for 5 years. This study uses secondary data with the help of the Eviews 9 application. The results found that the Leverage Variable (Debt Equity Ratio) has a positive and significant influence on Financial Distress while Liquidity (Current Ratio), Company Size (ln of Total Assets), and Profitability Variables (Return). on Assets) has a negative and significant effect on Financial Distress.

Determinants of audit fees in quoted financial and non-financial firms

2021 ◽  
Vol 3 (2) ◽  
pp. 30-40
Author(s):  
Wasiu Ajani Musa ◽  
Ramat Titilayo Salman ◽  
Ibrahim Olayiwola Amoo
Keyword(s):  
Financial Reporting ◽  
Audit Quality ◽  
Secondary Data ◽  
Sampling Technique ◽  
Audit Fees ◽  
Three Dimensions ◽  
Annual Reports ◽  
Lagrangian Multiplier ◽  
Financial Firms ◽  
Lm Test

Regulators have ensured the compulsory disclosure of audit fees in the financial statement to overcome abnormal fees and instill credibility in the financial report since audit pricing is contingent upon audit quality. However, discrepancies between audit fee dimensions are evidenced in the abnormal audit fees, resulting in accounting scandals. Hence, this study assessed the determinants of audit fees in quoted financial and non-financial firms by building a model underpinned by agency theory (Mitnick, 2006) and economic theory of product differentiation (Beath & Katsoulacos, 1991). Secondary data were utilized from companies’ annual reports between 2009 and 2018 using the purposive sampling technique. Furthermore, Breusch-Pagan Lagrangian multiplier (LM) test and the Hausman test indicated the consistency of the models. The static panel regression estimations showed that auditee size, risk, auditor size, reputation, engagement lag, and International Financial Reporting Standards (IFRS) implementation significantly affect audit fees in both sectors. This study concluded that the three dimensions largely determine audit fees. This study instructively proposed that assurance clients should devise an outline of guidelines and practices to guide activities in the sectors by monitoring the variables that impact audit fees

scholarly journals THE MODERATING EFFECT OF INDEPENDENT COMMISIONERS ON FINANCIAL POLICY AND PUBLIC OWNERSHIP TOWARD CORPORATE FINANCIAL PERFORMANCE

2020 ◽  
Vol 2 (2) ◽  
pp. 139
Author(s):  
Niko Silitonga
Keyword(s):  
Financial Performance ◽  
Stock Exchange ◽  
Measurement Instrument ◽  
Secondary Data ◽  
Sampling Technique ◽  
Annual Reports ◽  
Corporate Financial Performance ◽  
Financial Policy ◽  
Public Ownership ◽  
The Relationship

<p align="center"><strong>Abstract</strong></p><p><em>The corporate financial performance is one of the measurement instrument whether the company is sustainable. This study aims to determine the effect of financial policy and public ownership on corporate financial performance with Independence of commissioners as a moderating variable in mining companies listed on Indonesia Stock Exchanges. This research uses a quantitative research model using secondary data. The data in this study were processed by the Moderating Regression Analysis (MRA) method supported by the IBM SPSS and Microsoft Excel programs as support software with data analysis techniques in the form of a classic assumption test and R2 test, F test, and t test. The population in this study are companies that have reported annual reports consistently during the 2014-2017 period. This study used a purposive sampling technique and obtained as many as 19 companies in accordance with predetermined criteria. The results of this study indicate that financial policy proxied by debt policy (DER) has a significant and positive effect on corporate financial performance, public ownership has no significant effect on corporate financial performance, independence commissioners strengthen the relationship between financial policy on corporate financial performance and independence commissioners do not has a moderating role between the relationship between Public Ownership and corporate financial performance. This study uses data from mining sector companies, it is recommended for further research to use other sectors such as: Property &amp; Real Estate Sector, Manufacturing Sector, and others listed on the Indonesia Stock Exchange.</em> <em>The implications of this study for the company management, this research can provide input to the company to be able to choose and use an independent commissioner who fulfills expertise in the financial and business fields of his company in order to make a decision on his company's financial policy.</em></p><strong>Keywords:</strong> <em>Independence of Commissioners, Financial Policy, Public Ownership, Corporate Financial Performance</em>.

scholarly journals PENGARUH KEPEMILIKAN INSTITUSIONAL, KOMPETENSI DEWAN KOMISARIS DAN KUALITAS AUDITOR PADA NILAI PERUSAHAAN

2017 ◽  
pp. 3379
Author(s):  
Cok Istri Ratna Sari Dewi ◽  
Ni Made Dwi Ratnadi ◽  
Maria M. Ratna Sari
Keyword(s):  
Firm Value ◽  
Stock Price ◽  
Stock Exchange ◽  
Sample Selection ◽  
Secondary Data ◽  
Sampling Technique ◽  
Institutional Ownership ◽  
Annual Reports ◽  
Positive Effects

High firm value will increase the prosperity of shareholders. The higher the stock price, the higher the firm value could be. Generally investors will hand over its management to the professionals to achieve the company’s goal which is to increase the firm values. This study aims to examine the influence of institutional ownership, the competence of board of commissioners and the quality of auditor on firm values. The analyzed data is secondary data, taken from financial statements and annual reports of companies that listed in Indonesia Stock Exchange from 2012-2015. The sample selection determined by using purposive sampling technique, 48 companies were acquired. Multiple linear regression techniques were used to analyze the data. The results showed that institutional ownership, the competence of board of commissioners and the quality of auditor have positive effects on firm values.

The analysis of influencing factors on the going concern audit opinion – a study in manufacturing firms in Indonesia

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Thomas Averio
Keyword(s):  
Audit Quality ◽  
Stock Exchange ◽  
Secondary Data ◽  
Sampling Technique ◽  
Manufacturing Firms ◽  
Annual Reports ◽  
Content Type ◽  
Audit Opinion ◽  
Going Concern ◽  
Going Concern Opinion

PurposeIt is argued that the going concern opinion is issued if auditors have a doubt about financial condition of a company. Provision of the going concern audit opinion may worsen the company in terms of gaining public trust and may even indicate bankruptcy. This study aims to determine the factors that affect the auditor's going concern opinion.Design/methodology/approachThis research used secondary data obtained from annual reports and independent audit reports published by the Indonesia Stock Exchange. The population of this research included manufacturing firms registered in the Indonesia Stock Exchange from 2015 to 2019. The sample after the purposive sampling technique being applied consisted of 33 companies. The data were analyzed using logistic regression performed in the statistical analysis software, SPSS 24.0.FindingsThe results indicated that leverage positively affected the going concern audit opinion, then the audit quality, profitability and liquidity negatively affected the going concern audit opinion, whereas firm size and audit lag did not affect the going concern audit opinion.Originality/valueThis study is in contrast to several existing studies on the determinants of the auditor's going concern opinion and provides knowledge on developing more factors affecting the auditor's going concern opinion.

scholarly journals YAN vOL.8 ED 2

2019 ◽  
Author(s):  
Yan Irianis
Keyword(s):  
Intellectual Capital ◽  
Ownership Structure ◽  
Stock Exchange ◽  
Secondary Data ◽  
Sampling Technique ◽  
Annual Reports ◽  
Managerial Ownership ◽  
Company Size ◽  
Company Performance ◽  
Manufacturing Companies

The purpose of the research is to analyze the effect of Intellectual Capital, Company Size, and Ownership Structure, namely managerial ownership and institusional ownership toward company performance. This research used samples from manufacturing companies that listed on Indonesia Stock Exchange (IDX) during 2012-2015. Based on purposive sampling technique, it got 17 companies as research samples, so as long as 4 years observation there were 68 annual reports were analyzed. Type of data used is secondary data obtained from www.idx.co.id. The analyctical method used is multiple regression analysis.The results of this research showed than Intellectual Capital doesn’t have significant effect to company performance, company size has significant effect to company performance, managerial ownership has significant effect to company performance, and institutional ownership doesn’t have significant effect to company performance.

scholarly journals REVIEW OF SOME FINANCIAL RATIOS AND THE EFFECT ON CHANGES IN INCOME IN REGISTERED FOOD AND BEVERAGE COMPANIES IN INDONESIA STOCK EXCHANGE

2020 ◽  
Vol 8 (11) ◽  
pp. 76-88
Author(s):  
Syamsul Bahri Surbakti ◽  
Windy Aginta ◽  
Aria Masdiana
Keyword(s):  
Stock Exchange ◽  
Linear Regression Analysis ◽  
Secondary Data ◽  
Sampling Technique ◽  
Multiple Linear Regression Analysis ◽  
Profit Margin ◽  
Financial Ratios ◽  
Current Ratio ◽  
Purposive Sampling ◽  
Food And Beverage

This study aims to determine the effect of financial ratios such as current ratios, debt to assets ratio, gross profit margin on changes in earnings in food and beverage companies listed on the Indonesia Stock Exchange. The population of this research is food and beverage companies listed on the Indonesia Stock Exchange. The sampling technique was using purposive sampling method. Based on purposive sampling from 40 companies, it was obtained a sample of 19 companies that met the criteria. The research data is secondary data obtained from the Indonesian Stock Exchange (www. Idx.co.id) and ICMD 2016-2017. Testing the research hypothesis used multiple linear regression analysis techniques (Multiple Regression Model), with the application tool SPSS (Statistical Product and Service Solutions). The results of this study indicate that there is no significant effect between Current Ratio, Debt to Assets Ratio and Gross Profit Margin on partial changes in earnings, so it can be concluded that the first hypothesis is rejected. Likewise, the simultaneous test of Current Ratio, Debt to Assets Ratio, Gross Profit Margin simultaneously or together is unable to explain changes in the dependent variable, namely changes in earnings.

scholarly journals ANALISIS RASIO LANCAR RUMAH SAKIT X

2016 ◽  
Vol 1 (2) ◽  
Author(s):  
Marsdenia Marsdenia
Keyword(s):  
Secondary Data ◽  
Primary Data ◽  
Normal Range ◽  
Current Ratio ◽  
Qualitative Approaches ◽  
Secondary Data Source ◽  
Data Source ◽  
Cash Inflow ◽  
Turn Over ◽  
Acid Test

ABSTRACT – Increasing the efficiency of hospital management sustainability is an ongoing financialmanagement guidelines that absolutely must be adopted by any hospital. This study aims at obtaininginformation about the components that contribute to the fluctuations of the current ratio Hospital X between2000, 2001 and 2002. This study used quantitative and qualitative approaches, with the primary data source(in-depth interviews to the relevant parties ie Hospital Director, Chief Financial Officer and Vice DirectorAdiministrasi Finance) and the secondary data source include financial statements. The research shows thatRS X’s current ratio are still in a normal range except in the year of 2001 was below the standard (1.42). Themore sensitive ratio, Acid Test Ratio, is still in normal range in the year of 2000, but in the year of 2001, and2002, the ratios are in the lowest bend of the normal range. Cash Ratios for many years are also in the lowestbend except for the year of 2000, Receivable turn over ratios for the last three years go smaller showing thatreceivables took longer time to collect, the normal range for receivable turn over is 14 up to 20 days. Inventoryturn over ratios are below the standard range (24-32 times per year), the average inventory held in warehouseAnalisis Rasio Lancar Rumah Sakit XMarsdeniaVolume 1, Nomor 2, pp 61-8362is between 16 up to 21 days. The value of current ratio is got from comparison between current assets andcurrent liabilities. Nominally, RS X’s current ratio in 2002 is in the state bend, namely, 1.5 – 2.00, in the realterm, the ratio shows on contradictory pictures. The reasons are a) Guaranteed Receivables are valued abovethe normal practice (overstated) b) overstated of Non Guaranteed receivables/Personal Receivables.Based on this research, the author thinks that there are some rooms for RS X’s management to fittheir current ratio problem. There are several suggestions that the management can adopt, namely controllingcash outflow and cash inflow, reevaluating receivables policy, reforming the supply of inventories (medicine)procedures.Keywords: Current ratio, cash, patient receivables, inventory, current liabilities.

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