Merton-type default risk and financial performance: the dynamic panel moderation of firm size

PurposeThe main purpose of this study is to evaluate the probability of default and examine the relationship between default risk and financial performance, with dynamic panel moderation of firm size.Design/methodology/approachThis study utilizes a total of 1,500 firm-year observations from 2013 to 2018 using dynamic panel data approach of generalized method of moments to test the relationship between default risk and financial performance with the moderation effect of the firm size.FindingsThis study establishes the findings that default risk significantly impacts the financial performance. The relationship between distance-to-default (DD) and financial performance is positive, which means the relationship of the independent and dependent variable is inverse. Moreover, this study finds that the firm size is a significant positive moderator between DD and financial performance.Practical implicationsThis study provides new and useful insight into the literature on the relationship between default risk and financial performance. The results of this study provide investors and businesses related to nonfinancial firms in the Pakistan Stock Exchange (PSX) with significant default risk's impact on performance. This study finds, on average, the default probability in KSE ALL indexed companies is 6.12%.Originality/valueThe evidence of the default risk and financial performance on samples of nonfinancial firms has been minimal; mainly, it has been limited to the banking sector. Moreover, the existing studies have only catered the direct effect of only. This study fills that gap and evaluates this relationship in nonfinancial firms. This study also helps in the evaluation of Merton model's performance in the nonfinancial firms.

Pengaruh Profitabilitas, Likuiditas, Ukuran Perusahaan Dan Keputusan Investasi Terhadap Nilai Perusahaan

Companies need funds to finance their operational activities, therefore a company must be able to attract investors to be interested in investing their capital. The high and low value of the company can be an attraction for investors. In addition to reflecting current conditions, company value can also describe the company's prospects in the future. Because it is important to do a research on what factors can have an influence on the value of the company. This study aims to analyze the effect of profitability, liquidity, firm size and investment decisions on firm value. The study was conducted on banks listed on the Indonesia Stock Exchange in 2018-2020, the sampling method used a purposive sampling technique. The analytical technique used is multiple linear regression analysis with the help of the SPSS program. The results of this study indicate that the variables of profitability, liquidity and investment decisions have a positive and significant effect on firm value. While the firm size variable has a negative and insignificant effect on firm value. Keywords: firm value, profitability, liquidity, firm size, investment decisions

Pengaruh Profitabilitas, Likuiditas, Leverage, dan Ukuran Perusahaan terhadap Kebijakan Dividen

This study is intended to determine the effect of the independent variable (X), namely: Profitability, Liquidity, Leverage, and Company Size on Dividend Policy in the study of companies in the Consumer Goods Industry sector. The research method in this test uses quantitative descriptive and the data used is secondary data from official sources. The population in this study were all companies in the Consumer Goods Industry sector, totaling 60 companies. The sampling technique in this study was using purposive sampling by taking into account certain conditions that had been agreed upon so that the authors decided to use 10 companies as samples in this test. The data obtained with the observation time of 5 years is 50 data. The source of data in this study is secondary data. Test the quality of the data using Descriptive Analysis Techniques, Classical Assumption Test, and Multiple Linear Analysis. The data analysis technique in this test uses the t statistic test, f statistic test, and the coefficient of determination (Adjust R2). The partial test results in this test show that profitability and liquidity have a positive effect on Dividend Policy, while Leverage and Firm Size have a negative effect on Dividend Policy. Simultaneous test results show that the free factors of Profitability, Liquidity, Leverage, and Company Size also have a positive and significant effect on Dividend Policy in the Consumer Goods Industry sector on the IDX for the 2016-2020 period. Keywords: Profitability, Liquidity, Leverage, Firm Size, Dividend Policy

Pengaruh Firm Size, Leverage, Profitabilitas dan Kebijkan Deviden terhadap Manajemen Laba:Studi Kasus Perusahaan Manufaktur yang Terdaftar di BEI Tahun 2016-2019

Praktik manajemen pendapatan di Indonesia dinilai tinggi karena perlindungan investor yang buruk. Pengelolaan hasil dilakukan oleh para eksekutif dan tim penyus-un neraca karena mereka mengharapkan keuntungan. Tujuan dari penelitian ini adalah untuk secara bersama-sama menganalisis pengaruh ukuran perusahaan, hutang, profitabilitas dan kebijakan dividen. terhadap manajemen laba pada perusahaan manufaktur yang terdaftar di Bursa Efek Indonesia periode 2016 – 2019. Pengambilan sampel menggunakan teknik unknown sampling yaitu intensional sampling dengan sampel sebanyak 23 perusahaan dengan masa investigasi 4 tahun Pengujian hipotesis regresi linier berganda menggunakan metode Program IBM SPSS Statistics versi 23.Hasil penelitian ini menunjukkan bahwa ukuran perusahaan dengan nilai t 0,336 dan tingkat signifikansi 0,038 (<0> 0,05) memiliki pengaruh yang signifikan terhadap manajemen laba. Dengan nilai t-hitung sebesar 0,587, profitabilitas tidak berpengaruh terhadap manajemen laba dan memiliki tingkat signifikansi 0,560 (> 0 0,05). Dengan hitung 0,065 dan tingkat signifikansi 0,048 (ylt; 0,05), kebijakan dividen berpengaruh signifikan terhadap manajemen laba. Ukuran perusahaan, leverage, profitabilitas dan kebijakan dividen secara keseluruhan berpengaruh signifikan terhadap manajemen laba dengan nilai signifikansi 0,024 (ylt; 0,05).

The Factors Affecting the Acceptance of Going Concerned Audit Opinion (Empirical Study on Registered Agricultural Sector Companies in Indonesia Stock Exchange 2013-2019)

The study aimed to determine and analyze the effect of financial distress, firm size, profitability, cash flow ratio, leverage, and environmental performance on going concern audit opinion. The research object is the agriculture sector company listed on the Indonesia Stock Exchange (IDX). The population in this study were all companies listed in the agricultural sector on the Indonesia Stock Exchange for the 2013-2019 period. The total population in this study was 21 companies. The method used in determining the sample using the purposive sampling technique. The sample in the study was 17 companies with 119 data analyzed. The study used secondary data and used multivariate analysis. The results of this research state that financial distress, profitability, cash flow ratio, environmental performance do not affect the acceptance of going concern audit opinion. The firm size has a negative effect on the acceptance of going concern audit opinions. In contrast, leverage positively affects the acceptance of going concern audit opinions in the agriculture sector listed on the Indonesia Stock Exchange (IDX) for 2013-2019. Keywords: financial distress, firm size, profitability, flow ratio cash, leverage, going concern audit opinion.

An analysis of factors affecting the profits of new firms in Spain: Evidence from the food industry

Using the logistic model, this article investigates the influence of financial factors on gaining profits for new firms in the Spanish food industry. Specifically, the firms founded separately during the crisis period and during the postcrisis period are observed for their first three years. The findings suggest that indebtedness (for both periods), previous profitability (for the postcrisis period) and accounts payable (for the crisis period) were most frequently statistically significant in the logistic model. Hence, for new firms, controlling debt burden, accumulating internally generated funds and using payables to establish business relationships can help to gain profits. Firm size and asset rotation were significant in the first year (especially during the postcrisis period), with a positive relationship to profits. Given that the food industry is highly competitive, enlarging firm size to reach efficiencies of scale and using a low-price strategy with high asset rotation to obtain market share are effective marketing strategies for new firms. This article contributes to the empirical studies about the financial effects on new firms' profits in the food industry; it can also help potential entrepreneurs make better decisions about starting new businesses and help to manage new firms better in different macroeconomic environments.

Determinants of Good Corporate Governance (Empirical Studies on Companies Listed on The IDX)

The purpose of this study is the role of ownership concentration, firm size, and leverage in influencing good corporate governance. This research design is quantitative. The population used is 45 companies indexed LQ45 on the Indonesia Stock Exchange and with the Purposive Sampling method, obtained 17 companies with 3 years of observation, so the number of samples in this study is 51. The results show that the concentration of ownership, company size, and leverage have a significant effect. The test results show a positive and significant effect on the implementation of corporate governance partially for each variable and simultaneously for all variables.

effect of net trade cycle, firm size, and networking capital on profitability with cash holdings as intervening variables in cement companies in Indonesia

This study aims to examine a model that hypothesizes that the net trade cycle, company size, and net working capital of cement companies in Indonesia impact achieving a return on assets as a proxy for profitability through the company's cash holdings. The sample consists of 45 cement producers in Indonesia that have produced commercially before 2011 and regularly publish company annual reports. The results of the path analysis confirm that the net trade cycle, firm size, and networking capital do not affect the return on assets as a proxy for profitability. Likewise, statistically, it still shows the same results after being mediated with cash holdings. Moreover, found the effect of cash holdings on ROA. These findings can provide a starting point for further research to find a more appropriate formula to increase profitability, especially for companies in the cement sector in Indonesia, where utilization rates tend to be low, and market conditions are becoming very competitive.