Non-financial measures reporting  in Iran

The study aimed to investigate the role of non-financial measures in predicting corporate financial distress in the Indian industrial sector. The proportion of independent directors on the board and the proportion of the promoters’ share in the ownership structure of the business were the non-financial measures that were analysed, along with ten financial measures. For this, sample data consisted of 82 companies that had filed for bankruptcy under the Insolvency and Bankruptcy Code (IBC). An equal number of matching financially sound companies also constituted the sample. Therefore, the total sample size was 164 companies. Data for five years immediately preceding the bankruptcy filing was collected for the sample companies. The data of 120 companies evenly drawn from the two groups of companies were used for developing the model and the remaining data were used for validating the developed model. Two binary logistic regression models were developed, M1 and M2, where M1 was formulated with both financial and non-financial variables, and M2 only had financial variables as predictors. The diagnostic ability of the model was tested with the aid of the receiver operating curve (ROC), area under the curve (AUC), sensitivity, specificity and annual accuracy. The results of the study show that inclusion of the two non-financial variables improved the efficacy of the financial distress prediction model. This study made a unique attempt to provide empirical evidence on the role played by non-financial variables in improving the efficiency of corporate distress prediction models.

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The Impact of Mergers and Acquisitions and Sustainability on Company Performance in the Pharmaceutical Sector

Sustainability ◽

10.3390/su13126525 ◽

2021 ◽

Vol 13 (12) ◽

pp. 6525

Author(s):

Diana Marieta Mihaiu ◽

Radu-Alexandru Șerban ◽

Alin Opreana ◽

Mihai Țichindelean ◽

Vasile Brătian ◽

...

Keyword(s):

Stock Market ◽

Mergers And Acquisitions ◽

Performance Improvement ◽

Score Function ◽

Pharmaceutical Companies ◽

Company Performance ◽

Direct Impact ◽

Pharmaceutical Sector ◽

Financial Measures ◽

The Impact

The primary goal of this study was to determine the impact of mergers and acquisitions (M&A) and the environmental, social, and governance (ESG) sustainability scores of companies. In this regard, efforts to measure and analyze the evolution of a company’s performance, taking into account financial and non-financial measures using a score function, are adapted to the pharmaceutical sector. The sample consisted of 100 leading pharmaceutical companies, ranked by stock market capitalization, who registered 30% (n = 492) of the total M&A transactions over the study period (2010–2020). There was a direct and positive link between the M&A process and the evolution of company performance. The ESG score, as an indicator for measuring sustainability, has a positive and direct impact on company performance, indicating that a high ESG score determines an increase in company performance. A similar impact is identified for companies involved in M&A processes, meaning that companies in the pharmaceutical sector tend to register a performance improvement.

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Board Characteristics and Firm Performance: Indian Textiles Sector Panorama

Management and Labour Studies ◽

10.1177/0258042x211026148 ◽

2021 ◽

pp. 0258042X2110261

Author(s):

Mukesh Nepal ◽

Rajat Deb

Keyword(s):

Firm Performance ◽

Positive Association ◽

Policy Implications ◽

Board Independence ◽

Board Size ◽

Significant Positive Association ◽

Jel Codes ◽

Financial Measures ◽

Panel Data Regression ◽

Data Regression

The study has attempted to examine whether the board size and board independence have any impact on the financial performances of the Indian textile firms. Accessing the data of the 40 sample firms representing the top 100 BSE-listed textile firms during the timeline 2015–2019 and applying the panel data regression model, it has assessed the impacts. Accounting- and market-based financial measures have been proxied, and a significant positive association between the board size and firm performance has been established. Interestingly, a significant inverse relationship between the board independence and financial performance has also been indicated. It has concurred policy implications as the inclusion of more number of board members would likely to increase the firm performance. Moreover, for improving the sound decision-making, firms may chalk out a policy with capping on the engagement of independent directors in other firms. It has acknowledged a few limitations and has sketched a roadmap for posterior studies as well. JEL Codes: G28, G30, M40

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How the Balanced Scorecard Is Implemented in the Spanish Footwear Industry

Sustainability ◽

10.3390/su13105641 ◽

2021 ◽

Vol 13 (10) ◽

pp. 5641

Author(s):

Carlos Suárez-Gargallo ◽

Patrocinio Zaragoza-Sáez

Keyword(s):

Balanced Scorecard ◽

High Grade ◽

Exploratory Research ◽

Online Questionnaire ◽

Financial Measures ◽

The Balanced Scorecard ◽

Cause And Effect ◽

Phone Calls ◽

Footwear Industry ◽

Final Sample

This paper provides a deeper knowledge of the implementation of the Balanced Scorecard (BSC) in the Spanish footwear industry, under an exploratory research which has been conducted with a final sample of seven firms. An online questionnaire was developed, supported by phone calls and a personal interview. An 18–24-month-period has been found to be enough to develop solid foundations for a BSC. Financial and non-financial measures are presented in the whole firms and in the majority of the four perspectives, linked by cause-and-effect relationships, showing a high development in the BSC implementation. BSCs with a high grade of development are more likely to identify their intangibles as well as include them in the firm’s strategy. A personal BSC has been identified as a limitation. Although the strategy is spread out with meetings in the whole firms, it is not known at all levels, showing a gap to be fulfilled. Strategy maps are key in BCS implementation: they are present in the majority of the firms and show that the performance drivers reach the strategy. Firms with a high grade of development and expectation, using both financial and non-financial measures linked by cause-and-effect relationships, are more likely to define sustainable measures, integrating them in their own BSC.

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Three strikes and you are out?

Journal of Strategy and Management ◽

10.1108/jsma-08-2016-0049 ◽

2017 ◽

Vol 10 (4) ◽

pp. 417-429 ◽

Cited By ~ 1

Author(s):

Michael Carriger

Keyword(s):

Negative Impact ◽

Univariate Analysis ◽

Market Valuation ◽

Financial Health ◽

Content Type ◽

Financial Measures ◽

Significant Negative Impact ◽

Three Strikes ◽

Underlying Disorder ◽

The Impact

Purpose Much has been written in both the management and finance literatures about the impact of downsizing on the financial health and market valuation of companies. However, surprisingly little attention has been paid to the frequency of downsizing and the impact of frequent downsizings. The purpose of this paper is to look at trends in downsizing, asking the question are companies that downsize once more likely to downsize again. The paper also looks at the impact of frequent downsizing, asking the question are frequent downsizers differentially impacted compared to less frequent downsizers. Design/methodology/approach Companies that appeared on the Fortune 500 in 2014 and were also on the list in 2008 were assessed for the impact of repeat downsizings on financial measures (profitability, efficiency, debt, and revenue) and market valuation. A trend analysis was conducted to assess the trend in downsizing and repeated downsizing from 2008 through 2014. A series of univariate analysis of variances were conducted to assess the impact of repeated downsizings on the financial and market valuation indicators. Findings Findings indicate that companies that downsize between 2008 and 2009 were more likely to downsize again in future years. And this repeat downsizing happened at a higher rate than would be expected by the percentage of companies that initially downsized. Findings also indicate that multiple downsizings had a significantly negative impact on the company’s financial performance as measured by two profitability ratios (return on assets and return on investment) and a borderline significant negative impact on the company’s market valuation as measured by stock equity, regardless of industry or initial financial health of the company. Originality/value Two competing theories were considered and the evidence found here support both. However, the “band-aid solution” theory, that downsizing may function as a band-aid addressing the symptoms that lead to the downsizing but not the underlying disorder or cause may be a more parsimonious explanation for the results here. It is hoped that these findings will inform both scholars and practitioners, giving both a clearer picture of the impact of multiple downsizings on corporate performance.

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Project Similarity Bias and Variance Neglect in Forecast Metric Evaluation

10.31234/osf.io/edzna ◽

2021 ◽

Author(s):

Shir Dekel ◽

Micah Goldwater ◽

Dan Lovallo ◽

Bruce Burns

Keyword(s):

Net Present Value ◽

Psychological Research ◽

Present Value ◽

Financial Measures ◽

Business Executives ◽

Management Students ◽

Financial Measure

Business executives often have to allocate resources across very dissimilar projects. They use financial measures, such as Net Present Value (NPV) that simplify this difficult comparison because they aim to be equally applicable to any kind of project, but these measures vary in their reliability. Psychological research suggests that comparing alignable objects will be easier than comparing non-alignable objects (Markman & Gentner, 1993; Markman & Medin, 1995). However, it is unclear how alignment might moderate people’s use of financial measure such as NPV. We found that laypeople accommodate their use of a financial measure (NPV) based on its reliability (as explicitly described in the introduction to the task) when allocating resources to a set of alignable projects, but use it regardless of reliability when allocating to a set of non-alignable projects. However, when NPV reliability information was presented numerically using ranges, participants’ allocation did not depend on the ranges—participants used NPV even when they had an opportunity to use the intrinsic features of the project. Overall, however, participants relied on NPV more when projects were low in alignment than when they were high in alignment. The result with numerical reliability was replicated with Masters of Management students. Our results demonstrate that considering dissimilar choices may hinder people’s ability to evaluate their importance, and that people might not be using useful variance information in their decisions.

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