The Role of Net Working Capital in the Financing of the Operating Activities of Mining Companies

The paper examines how companies’ net working capital is used to finance their operating activities. Net working capital is a source oflong-term financing (equity and long-term external capital) and is more expensive than financing through short-term sources, henceits rational use has a significant impact on the efficiency of companies’ operations. The computed level of net working capital is usedto calculate ratios enabling companies to control this capital. The ratios indicate the relationship of net working capital to currentassets, to the sum of accounts receivable and short-term investments, to cash and cash equivalents, and sales revenues. Based on thesecalculations of the relationships, an assessment was made of net working capital engagement in the financing of operating activities inmining companies. These companies maintain a high degree of current asset financing through long-term capital. In mining companieswith diverse mining activities, the level of current assets financing through long-term capital is higher than in coal mining companies.This is due to the maintenance of a higher level of inventories of extracted raw materials, the distance of outlets from the place ofextraction and the method of transport used. Based on the ratio of net working capital to cash and cash equivalents, it was found thatsome companies were overly liquid. Cash balances significantly exceed the value of this capital over a period of three to four years. Asurplus of cash over net working capital in the short term cannot be treated as excess liquidity, as it is the due to flexible managementof this capital.

System for evaluation of financial security of operational activity of oil-and-fat industry enterprises

Purpose. The purpose of the article is to develop a system for evaluation the state of financial security of operating activities of enterprises in oil-and-fat industry based on the coordination of the interaction of the main factors of influence and levels of its components. Methodology / approach. In the process of writing the article the following research methods were used: abstract-logical (at the systematization of scientific publications on the problems of management of enterprises in oil-and-fat industry, financial security of enterprises), grouping (by clustering enterprises depending on the obtained results), comparisons (by developing a model for assessing the degree of financial stability of operating activities of enterprises), coefficient (by developing a model for assessing the degree of liquidity of enterprises), formalization (by developing a matrix for diagnostics of the state of financial security of operating activities of enterprises), generalization (by formulating research conclusions). Results. In the process of research, the system of complex evaluation of degrees and levels of the main components of financial security of the operations activities of the enterprises in oil-and-fat industry was substantiated: a model for assessing the financial stability of operating activities and a model for assessing the liquidity of an enterprise. A diagnostic matrix for the financial security status of the operational activities of the enterprises in oil-and-fat industry was developed to define the security boundaries of the operation activity of enterprises. Approbation of the proposed system for assessing the financial security of operating activities on the materials of the selected group of enterprises in the oil-and-fat industry made it possible to analyze the dynamics of the state of the financial security of their operating activities. Originality / scientific novelty of the research is to develop tools for a comprehensive evaluation of the financial security of the operating activities of the enterprises in oil-and-fat industry. The method of determining the impact of the degree of financial stability and liquidity of the enterprise on the level of financial security of current activities was improved. For the first time, a nine-quadrant matrix of the state of financial security of operating activities of enterprises depending on the ratio of the degrees of the above factors was substantiated. Practical value / implications. The use of the proposed system of financial security evaluation of operating activities of the enterprise, according to the authors, can serve as an effective mechanism for managing the financing current activities of enterprises in oil-and-fat industry and become an informative tool for factor analysis in managing their overall financial security.

INFLUENCE INVESTMENT OPPORTUNITY SET, OPERATING PROFIT MARGIN, CASH FLOW FROM OPERATING ACTIVITIES AND CASH FLOW TO EQUITY ON POLICY DIVIDEND ON A METAL COMPANY THAT LISTED ON INDONESIA STOCK EXCHANGE

The research objectives in this study are to find out and analyze the effect Investment Opportunity Set, To find out and analyze the effect Operating Profit Margin, To find out and analyze the effect of Cash flow from operating activities, to find out and analyze the effect Cash flow to Equity to the dividend payout ratio, to determine and analyze the effect of the Investment Opportunity Set, Operating Profit Margin, Cash Flow from Operating Activities and Cash Flow to Equity simultaneously on the Dividend Payout Ratio in metal companies listed on the Indonesia Stock Exchange for the 2016-2020 period. This study uses a quantitative approach, the regression analysis technique used in this study is a multiple linear regression analysis technique. The results of this study indicate that there is an influence between the Investment Opportunity Set on Dividend Policy. There is an effect of Operating Profit Margin on Dividend Policy. There is no influence of Cash Flow From Operating Activities on the Dividend Policy in. There is an effect of Cash Flow to Equity on Dividend Policy and the Fcount Value is 12, 130 with a significant level of 0.000, while Ftable is known to be 2.68. Based on these results, it can be seen that Fcount > Ftable (12,130 > 2,68) so that H0 is rejected and Ha is accepted so it can be concluded that the variables of Investment Opportunity Set, Operating Profit Margin, Cash Flow From Operating Activities, Cash Flow to Equity together have significant influence on the Dividend Policy of Metal Companies Listed on the Indonesia Stock Exchange for the 2016-2020 period.

Operational Performance Evaluation of Korean Ship Parts Manufacturing Industry Using Dynamic Network SBM Model

The purpose of this study is to analyze the efficiency and productivity of the Korean ship parts manufacturing industry. To this end, the manufacturing process was divided into two stages (operating activities, financial activities), and the Dynamic Network SBM model and Malmquist Productivity Index were used. We collected analysis data from KIS-VALUE, and analyzed 40 companies from 2014 to 2020. As a result of the analysis, from 2014 to 2017, the average operating efficiency was 0.7825, the average financial efficiency was 0.5208, and the average total efficiency was 0.4537. It was found that improving efficiency requires improving both activities simultaneously, rather than focusing on a specific activity. Operating activities DMI was 1.0025, financial activities DMI was 0.9236, and OMI was 0.9464. In order to improve OMI, it is necessary to improve the financial activities DMI, which is the cause of the decrease in productivity. In order to improve financial activities DMI, government policy or technology change to improve DFS was found to be necessary. Finally, the effect of environmental factors on efficiency was analyzed by tobit regression. It was found that Firm Size had a negative (−) effect on efficiency, and Firm Age had a positive (+) effect on efficiency. The analysis results of this study will help to understand the relationship between input and output, which has been treated as a black box in the manufacturing industry, in two stages; and this will serve as a guideline for those working in Korea’s ship parts manufacturing industry to establish policies.

Formation and distribution of the enterprise profit

The purpose of the article is to study the stages of formation and distribution directions of enterprise profits, substantiation of proposals for improving the process of profit management in the enterprise. Profit occupies one of the main places in the general system of value instruments of a market economy. It ensures the stability of the enterprise, guarantees its full financial independence. The methods of analysis and synthesis, comparison were used in the article. The characteristic of a role of the enterprise profit in the conditions of market economy is resulted. Some types of the enterprise profit in accordance with the given systematization on the basic signs are considered. The main stages of calculation of profit (loss) from operating activities of enterprises are determined. It is proved that the profit from the sale of products (performance of works, provision of services) is the main type of the enterprise profit, which is related to the industry specifics of its activities. An analogue of this term is the term “profit from operating activities”. Enterprises distribute the profits that remain at their disposal to meet various needs: first, it is directed to the formation of financial resources of the state, the financing of budget expenditures. For the purposes of long-term development, the proportion of the distribution of net income for consumption and accumulation is of paramount importance. The main internal and external factors influencing the profitability of the enterprise are given. It is proved that the effectiveness of profit management processes largely depends on the quality of analysis, the reality of identifying reserves to increase it, the economic justification of plans for the formation and use of profits for the future. Thus, the factor of profit growth is the reduction of production costs. The reduction of production costs most fully reflects the savings of all types of resources available to the enterprise. Key words: profit, formation, enterprise, distribution, use, estimation.

INFLUENCE INVESTMENT OPPORTUNITY SET, OPERATING PROFIT MARGIN, CASH FLOW FROM OPERATING ACTIVITIES AND CASH FLOW TO EQUITY ON POLICY DIVIDEND ON A METAL COMPANY THAT LISTED ON INDONESIA STOCK EXCHANGE

The research objectives in this study are to find out and analyze the effect Investment Opportunity Set, To find out and analyze the effect Operating Profit Margin, To find out and analyze the effect of Cash flow from operating activities, to find out and analyze the effect Cash flow to Equity to the dividend payout ratio, to determine and analyze the effect of the Investment Opportunity Set, Operating Profit Margin, Cash Flow from Operating Activities and Cash Flow to Equity simultaneously on the Dividend Payout Ratio in metal companies listed on the Indonesia Stock Exchange for the 2016-2020 period. This study uses a quantitative approach, the regression analysis technique used in this study is a multiple linear regression analysis technique. The results of this study indicate that there is an influence between the Investment Opportunity Set on Dividend Policy. There is an effect of Operating Profit Margin on Dividend Policy. There is no influence of Cash Flow From Operating Activities on the Dividend Policy in. There is an effect of Cash Flow to Equity on Dividend Policy and the Fcount Value is 12, 130 with a significant level of 0.000, while Ftable is known to be 2.68. Based on these results, it can be seen that Fcount > Ftable (12,130 > 2,68) so that H0 is rejected and Ha is accepted so it can be concluded that the variables of Investment Opportunity Set, Operating Profit Margin, Cash Flow From Operating Activities, Cash Flow to Equity together have significant influence on the Dividend Policy of Metal Companies Listed on the Indonesia Stock Exchange for the 2016-2020 period.

Effect of Cashflow on the Networth of construction firms in Nigeria

The main objective of this study is to ascertain the effect of Cashflow on the Networth of construction firms in Nigeria. The specific objectives are to: determine the relevance of operating activities to Networth of construction firms in Nigeria; ascertain the relevance of investing activities to Networth of construction firms in Nigeria; and to verify the relevance of financing activities to Networth of construction firms in Nigeria. The study adopted the ex-post facto research design and the data for analysis were obtained from the annual reports and financial statements of accounts of two (2) sampled firms from the construction industry in Nigeria, namely Julius Berger Nig. Plc and MISTA Nig. Ltd. The data collected covered 10 years (2009-2018) for Julius Berger and MIXTA Nig. Ltd and were then pooled and analysed using SPSS v 20.0, the tools of analysis being correlation coefficient (r), coefficient of determination (R2), F-ratio (ANOVA), t-test (for the tests of hypotheses), and the regression analysis for fitting the models. Findings revealed that operating activities cost, investing activities costs and financing activities cost have no significant relevance to Networth of construction firms in Nigeria. The conclusion was that the construction industry in Nigeria, though bereft of adequate amount of data to accomplish the aim of this study, has at least opened a new dimension about this contemporary issue in research. That would be a welcome dimension in our effort to improve the Building and Construction sector for development. Based on the findings, the study recommends that Managers should adopt cost reduction practices that would increase efficiency of operations that could translate to higher Networth; more investment activities should be encouraged by Construction firms so as to consolidate on the present situation; and the managements of Construction firms are advised to increase the financing activities in the industry so as to improve total assets. This will grow more assets and reduce the size of liability of the firms in the future. The implication is that since all the three components do not have significant effect on the Networth of construction companies in Nigeria, it might be difficult to generalize the findings. Therefore, it might need further investigation using larger sample size and different analytical approaches to ascertain the effect of Cashflow on Networth of Building and Construction firms in Nigeria.

FINANCIAL STABILITY AS A FINANCIAL SECURITY INDICATOR OF AN ENTERPRISE

The system diagnostics of enterprise financial security developed by the authors are based on taking into account the combined effect of the main elements of the financial stability management process. On the basis of the justification of the interdependence of the main components of an enterprise’s financial security (on the one hand, the types of financial stability and the liquidity of the balance sheet, on the other hand, their correlative effect on the level of financial security) the authors proposed a model for its evaluation. It has been proposed that the type of financial stability of an enterprise should be determined on the basis of the identification of the financial situation in accordance with the scale developed on the basis of the values of the main financial stability ratios. The type of liquidity on the balance sheet is based on a comparison of liquidity-based items of assets with maturities. The unified impact of types of financial stability and balance sheet liquidity on the level of financial security became the basis for the development a matrix for diagnostics the general position of financial security of the enterprise. Based on the established relationship between the degrees of financial stability and liquidity of an enterprise on the one hand, and the level of financial security of operating activities on the other, a model has been developed to assess the level of financial security of the enterprise’s operating activities. It has been proposed that the financial stability and liquidity of an enterprise should be determined on the basis of a three-tiered indicator by classifying financial situations within the established indicator scale: depending on the priority of selecting funds to finance the tangible portion of a negotiable asset and the sufficiency and composition of a negotiable asset to meet current liabilities. On this basis, a diagnostic matrix of the financial security position of the enterprise’s operational activities has been developed. The interconnection of the positions of the financial security of the enterprise and the unification of its level enabled the authors to develop a matrix of zones of the general position of the financial security of an enterprise where, depending on the combination of financial security levels, zones are distinguished from absolute financial security to financial danger. The testing of each element of the proposed enterprise financial security diagnostic’s system on the materials of a selected group of enterprises of the oil-and-fat industry confirms the practical significance of the developed tools in the process of managing their general financial security. Keywords: financial security, financial security level, financial security position, financial security of operating activities, financial stability, liquidity, oil-and-fat enterprises. JEL Classification G30, M20, Q14 Formulas: 14; fig.:5; tabl.: 4; bibl.: 22.

CREATIVE ACCOUNTING BEHAVIOUR : MENCERMINKAN KINERJA BAIK ATAU MENYESATKAN ?

This study aims to test empirically about creative accounting which is proxied by the income smoothing variable. The population used in this study were all companies listed on the Indonesia Stock Exchange, while the sample of this study were property, real estate and construction companies totaling 48 companies using purposive sampling technique. The results of this study indicate that there is a significant negative effect on the variable return on equity, current ratio, dividend payout ratio. This shows that the smaller the value of the company's return on equity, current ratio, and dividend payout ratio, the more likely the company is to do income smoothing. The results of this study also indicate that there is a significant effect of the CFO variable on income smoothing. This means that the greater the CFO of the company, the more likely the company is to do income smoothing. The results of this study provide contributions and input for the report users in seeing which companies do creative accounting so that they can decide whether to invest or not. Keywords: Creative accounting, income smoothing, profitabilitas, deviden payout ratio, return on equity Abstrak Penelitian ini bertujuan untuk menguji secara empiris tentang akuntansi kreatif (creative accounting) yang diproksikan oleh variabel perataan laba. Populasi yang digunakan dalam penelitian ini adalah semua perusahaan yang terdaftar di Bursa Efek Indonesia, sedangkan sampel penelitian ini adalah perusahaan properti, real estate dan konstruksi yang berjumlah 48 perusahaan menggunakan teknik purposive sampling. Hasil dari penelitian ini menunjukkan bahwa terdapat pengaruh negatif signifikan variabel return on equity, current ratio, deviden payout ratio. Hal ini menunjukkan bahwa semakin kecil nilai return on equity, current ratio, dan dividen payout ratio perusahaan, maka semakin besar kemungkinan perusahaan melakukan perataan laba. Hasil penelitian ini juga menunjukkan bahwa terdapat pengaruh yang signifikan variabel Cash Flows From Operating Activities (CFO) terhadap income smoothing. Hal ini berarti semakin besar Cash Flows From Operating Activities (CFO) perusahaan maka semakin besar kemungkinan perusahaan melakukan perataan laba. Dapat disimpulkan bahwa tingginya nilai laba bukan berarti menunjukkan kinerja perusahaan dalam kondisi baik. Hal ini dikarenakan adanya indikasi perusahaan melakukan perataan laba untuk tujuan tertentu. Hasil penelitian ini memberikan kontribusi dan masukan bagi para pihak pengguna laporan dalam melihat perusahaan mana saja yang melakukan creative accounting sehingga dapat memutuskan untuk menanamkan investasinya atau tidak. Kata kunci: Creative accounting, income smoothing, profitabilitas, deviden payout ratio, return on equity