scholarly journals Debt Capital and Financial Performance: A Comparative Analysis of South African and Sri Lankan Listed Companies

2017 ◽  
Vol 9 (2) ◽  
pp. 103
Author(s):  
Dilriukshi Yapa Abeywardhana ◽  
Katlego Magoro
Keyword(s):  
South Africa ◽  
Sri Lanka ◽  
Financial Performance ◽  
South African ◽  
Negative Impact ◽  
Debt Financing ◽  
Retail Sector ◽  
Short Term ◽  
Debt Capital

This study compares how the debt capital of the listed companies operating in the wholesale and retail sectors of South Africa and Sri Lanka affect their financial performance. Objective of this study is to examine whether debt capital affects the financial performance of the wholesale and retail sector companies in South Africa and Sri Lanka. To examine the impact of debt financing on financial performance of companies over the 2011-2015 period. Fixed-effects (within) regression model was used.The findings the study confirms that debt financing, in terms of short-term debt and long-term debt, has a negative impact on the financial performance of wholesale and retail sector companies in the context of South Africa. In Sri Lanka, debt financing, in terms of short-term debt has a negative impact on firm performance, while long-term debt has a positive impact. This study gives special focus to identify in which industries do different components of the capital structure have significant impact or weak-to-no impact on firm performances.This suggests for the South African wholesale and retail sector can use equity capital and retained earnings efficiently, thereby minimizing conflicts of agency or agency costs and remaining independent of external financiers. In the case of Sri Lanka, the owners and managers of the retail companies should consider reducing the use of short-term debt and increase long-term debt capital as long-term debt seems to influence their financial performances positively.  

scholarly journals Capital Structure and The Profitability of Listed Retail Firms

2018 ◽  
Vol 10 (1(J)) ◽  
pp. 171-181
Author(s):  
Jason Stephen Kasozi
Keyword(s):  
Capital Structure ◽  
Negative Relationship ◽  
Order Theory ◽  
Debt Financing ◽  
Retail Sector ◽  
Short Term ◽  
Return On Assets ◽  
Pecking Order Theory ◽  
Policy Interventions

The South African retail sector continues to experience a decline in sales and returns amidst growing external competition and a drop in consumer confidence stemming from the recent credit downgrades in the country. Yet, firms in this sector appear to maintain high debt to equity levels. This study investigated whether the capital structure practices of these firms influence their profitability. A Panel data methodology, using three regression estimators, is applied to a balanced sample of 16 retail firms listed on the Johannesburg Securities Exchange (JSE) during the period 2008-2016. The analysis estimates functions relating capital structure composition with the return on assets (ROA). Results reveal a statistically significant but negative relationship between all measures of debt (short-term, long-term, total debt) with profitability, suggesting a possible inclination towards the pecking order theory of financing behaviour, for listed retail firms. Additionally, retail firms are highly leveraged yet over 75% of this debt is short-term in nature. Policy interventions need to investigate the current restrictions on long-term debt financing which offers longerterm and affordable financing, to boost returns. While this study’s methodology differs slightly from earlier studies, it incorporates vital aspects from these studies, and simultaneously specifies a possible model fit.  This helps to capture unique but salient characteristics like the transitional effects of debt financing on firm profitability.  It therefore delivers some unique findings on the financing behaviour of retail firms that both in form policy change, while stimulating further research on the phenomenon. 

Nexus Between Debt Financing and Market Value Moderated by Firm Size: Panel Data Evidence from India

2021 ◽  
pp. 097226292110526
Author(s):  
Rajesh Desai
Keyword(s):  
Firm Size ◽  
Firm Value ◽  
Small Firms ◽  
Negative Impact ◽  
Market Value ◽  
Debt Financing ◽  
Least Square ◽  
Short Term ◽  
Using Data

This study examines the effect of debt financing on market value of firm and evaluates the moderating effect of firm size on this relationship. Tobin’s Q and market-to-book value ratio are used as proxy for market value whereas long-term as well as short-term debt ratios are considered to indicate debt financing. Using data of 164 capital goods sector companies for 10 years (from 2010 to 2019), panel least square (PLS) regression with fixed and random effects (RE) model has been applied for data analysis. Based on findings, the study reports significant negative impact of borrowings (both long-term and short-term) on market value of selected companies. Further, the outcome of study confirms that firm size moderates the relationship between debt financing and firm value. The magnitude and significance of the effect of debt are stronger for small firms as compared to medium and large firms. Present verdicts will assist managers in designing capital structure policies by considering its impact on market value according to firm-size.

Effect Of Debt Financing On Financial Performance Of Listed Non-Financial Firms In Kenya

2020 ◽  
Vol 8 (7) ◽  
pp. 485-496
Author(s):  
Philip Njau Kibunja ◽  
Olanrewaju Isola Fatoki
Keyword(s):  
Financial Performance ◽  
Negative Relationship ◽  
Debt Financing ◽  
Medium Term ◽  
Short Term ◽  
Return On Equity ◽  
Financial Firms ◽  
Panel Data Regression ◽  
Study Results

This study sought to examine the effect of debt financing on the financial performance of non-financial firms listed on the Nairobi Securities Exchange in the five-year period 2013 to 2017. Using a sample of 23 listed non-financial firms data was collected from published financial statements of the sampled firms and analysed statistical using the panel data regression method. The independent variables were short-term, medium term and long-term debt while the explained variable was return on equity. Three control variables, firm size, sales growth and growth opportunities, were included and considered as having an effect on the relationship between the independent and dependent variables.  The study results observed that medium-term debt had a negative and statistical significant relationship with return on equity. Long-term debt had a positive but statistically insignificant relationship while short-term debt had a negative relationship with return on equity.

scholarly journals Capital Structure and The Profitability of Listed Retail Firms

2018 ◽  
Vol 10 (1) ◽  
pp. 171
Author(s):  
Jason Stephen Kasozi
Keyword(s):  
Capital Structure ◽  
Negative Relationship ◽  
Order Theory ◽  
Debt Financing ◽  
Retail Sector ◽  
Short Term ◽  
Return On Assets ◽  
Pecking Order Theory ◽  
Policy Interventions

The South African retail sector continues to experience a decline in sales and returns amidst growing external competition and a drop in consumer confidence stemming from the recent credit downgrades in the country. Yet, firms in this sector appear to maintain high debt to equity levels. This study investigated whether the capital structure practices of these firms influence their profitability. A Panel data methodology, using three regression estimators, is applied to a balanced sample of 16 retail firms listed on the Johannesburg Securities Exchange (JSE) during the period 2008-2016. The analysis estimates functions relating capital structure composition with the return on assets (ROA). Results reveal a statistically significant but negative relationship between all measures of debt (short-term, long-term, total debt) with profitability, suggesting a possible inclination towards the pecking order theory of financing behaviour, for listed retail firms. Additionally, retail firms are highly leveraged yet over 75% of this debt is short-term in nature. Policy interventions need to investigate the current restrictions on long-term debt financing which offers longerterm and affordable financing, to boost returns. While this study’s methodology differs slightly from earlier studies, it incorporates vital aspects from these studies, and simultaneously specifies a possible model fit.  This helps to capture unique but salient characteristics like the transitional effects of debt financing on firm profitability.  It therefore delivers some unique findings on the financing behaviour of retail firms that both in form policy change, while stimulating further research on the phenomenon. 

Ökonomische Wirkungen der Fußball-WM 2010

2010 ◽  
Vol 61 (3) ◽  
Author(s):  
Stan du Plessis ◽  
Wolfgang Maennig
Keyword(s):  
South Africa ◽  
South African ◽  
Sporting Events ◽  
Short Term ◽  
World Cup ◽  
Positive Effects ◽  
Daily Data ◽  
Economic Impact Studies ◽  
Soccer Fans

SummaryWithout a doubt, the 2010 World Cup of soccer in South Africa was a great experience for both soccer fans, who enjoyed a safe and efficiently-run tournament, and their South African hosts. The sporting and social spectacle was broadcast around the world and focused unprecedented media attention on South Africa. Despite the manifest success of the tournament, its short-term effects on international tourism, which are the nucleus of all other short-term positive effects on economic variables such as employment, income and taxes, have turned out to be of a much smaller magnitude than expected or even as reported during the tournament. This may be attributable to self-defeating prophecy effects. This study is a warning against the abuse of economic impact studies, especially those pertaining to major sporting events. It is also a call to use the “correct” arguments of measurable awareness effects and potential long-term development effects in discussing major sporting events. Methodologically, this study is innovative in its economic analysis of major sporting events because it (i) uses data from social networks and (ii) uses high-frequency daily data on tourism.

scholarly journals Impact of Capital Structure on The Financial Performance of Listed Financial Institutions in Nigeria

2022 ◽  
Vol 05 (01) ◽  
Author(s):  
Bernard Wilson ◽  
Keyword(s):  
Capital Structure ◽  
Financial Performance ◽  
Negative Impact ◽  
Secondary Data ◽  
Least Square ◽  
Annual Reports ◽  
Short Term ◽  
Total Debt ◽  
Detrimental Impact

The influence of capital structure on deposit money bank financial performance was explored in this study. The secondary data was gathered from the annual reports and accounts of the 14 sampled Deposit Money Banks from 2014 to 2018, and generalized least square multiple regression was used to evaluate the secondary data. According to the findings, total debt to total assets, total debt to total equity, and long-term debt to total assets have little bearing on the financial performance of Nigerian banks. The study also discovered that the ratio of short-term debt to total assets has a considerable influence on a bank's financial success. In light of the findings, it is suggested that bank management strive diligently to reduce the short-term debt to total assets component of their capital structure, since this has a detrimental impact on their financial performance. They also have a tendency to enhance the ratio of total debt to total assets since it improves their financial performance. Long-term debt to total assets ratios should be reduced in capital structure components since they have a negative impact on financial performance.

scholarly journals Assessing The Macroeconomic Effects Of Water Scarcity In South Africa Using A Water-CGE Model

2021 ◽  
Author(s):  
Anne Briand ◽  
Arnaud Reynaud ◽  
Franck Viroleau ◽  
Vasileos Markantonis ◽  
Giuliana Branciforti
Keyword(s):  
South Africa ◽  
South African ◽  
Water Scarcity ◽  
Computable General Equilibrium ◽  
Negative Impact ◽  
Cge Model ◽  
Policy Simulations ◽  
Negative Impacts ◽  
Long Term Impact

Abstract We develop a dynamic computable general equilibrium (CGE) model to assess the macroeconomic impacts of water scarcity and water (in)security in South Africa. The water-CGE model which includes a detailed representation of water flows (surface water, groundwater, wastewater, and seawater) has been calibrated with an updated social accounting matrix enabling to conduct policy simulations up to 2030. We show that water scarcity will have an impact on the South African economy. With an increase of water scarcity by 17%, the CGE model predicts a decrease of South African GDP by -0.34% in 2030. The long-term impact of water scarcity varies from one sector to another, with the most negatively impacted sectors being those related to water (loss of GDP up to -2.48%). Due to the increase of water scarcity, the unemployment rate is expected to be 0.1% higher in 2020 which represents a loss of 18,000 jobs compared to the baseline year (2013). The 17% increase in water scarcity is also expected to have a negative impact on household welfare: by 2030, household consumption may decrease by -0.26%. Some policies can mitigate the negative impacts of water scarcity, the most promising one being to promote water saving.

Stochastic Investment Modelling: The Case of South Africa

1996 ◽  
Vol 2 (3) ◽  
pp. 765-801 ◽  
Author(s):  
R.J. Thomson
Keyword(s):  
South Africa ◽  
Time Series ◽  
Interest Rates ◽  
South African ◽  
Growth Rates ◽  
Time Series Models ◽  
Short Term ◽  
Model Based ◽  
Inflation Rates

ABSTRACTThe purpose of this paper is to describe a methodology for determining an appropriate structure for time-series models of inflation rates, short-term and long-term interest rates, dividend growth rates, dividend yields, rental growth rates and rental yields and to demonstrate the application of that methodology to the development of a model based on South African data. It is suggested that the methodology used in this paper may be applied to other economic environments.

Financial Performance of ECIL, Hyderabad – An Analysis

2013 ◽  
Vol 3 (2) ◽  
Author(s):  
N. Jyothi ◽  
Dr. T. Satyanarayana Chary
Keyword(s):  
Public Sector ◽  
Performance Analysis ◽  
Private Sector ◽  
Financial Performance ◽  
Business Environment ◽  
Present Position ◽  
Short Term ◽  
Comprehensive Manner

Financial performance of individual organizations differ very significantly, however, the performance is distinguishable between public sector companies and private sector companies as their nature and size of investment and business environment is different . The ECIL is a very vast growing company which requires additional funds on a regular basis, whether internal or external. Particularly, the company needs both long term and short-term finances in view of its present position and enormous scope for improvement in the services provided. The present paper is a modest attempt to discuss the financial performance analysis of ECIL, Hyderabad in terms operating profits, capital employed ratios and turnover in a comprehensive manner over a period of 10 years.

scholarly journals The interplay of gender, social context, and long-term unemployment effects on subjective health trajectories

2021 ◽  
Vol 21 (1) ◽  
Author(s):  
Laura Altweck ◽  
Stefanie Hahm ◽  
Holger Muehlan ◽  
Tobias Gfesser ◽  
Christine Ulke ◽  
...  
Keyword(s):  
Life Satisfaction ◽  
Social Context ◽  
Negative Impact ◽  
Subjective Health ◽  
Short Term ◽  
Self Rated Health ◽  
Health Trajectories ◽  
Lower Baseline ◽  
Baseline Values

Abstract Background While a strong negative impact of unemployment on health has been established, the present research examined the lesser studied interplay of gender, social context and job loss on health trajectories. Methods Data from the German Socio-Economic Panel was used, which provided a representative sample of 6838 participants. Using latent growth modelling the effects of gender, social context (East vs. West Germans), unemployment (none, short-term or long-term), and their interactions were examined on health (single item measures of self-rated health and life satisfaction respectively). Results Social context in general significantly predicted the trajectories of self-rated health and life satisfaction. Most notably, data analysis revealed that West German women reported significantly lower baseline values of self-rated health following unemployment and did not recover to the levels of their East German counterparts. Only long-term, not short-term unemployment was related to lower baseline values of self-rated health, whereas, in relation to baseline values of life satisfaction, both types of unemployment had a similar negative effect. Conclusions In an economic crisis, individuals who already carry a higher burden, and not only those most directly affected economically, may show the greatest health effects.

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