• The Journal of the Korea Contents Association
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• v.10 no.2
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• pp.361-371
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• 2010

This paper analyses the information contents of the trade credit in Korea. Trade credit is not only a settlement device in business cycle but also an information messenger in the financial market with an asymmetric information. The empirical results support that in addition to the bank loan, trade credit takes a significant role in that it provide a cheap and reliable credit to firms that have financial difficulties because of the information problem.

• Journal of Navigation and Port Research
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• v.39 no.1
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• pp.69-75
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• 2015

The concrete purpose of this study is to suggest actually a debt ratio to optimize the capital structure providing a kind of approach to estimate the proper debt ratio with an analytical model and empirical data in Korean shipping industry. The mathematical and analytical model is started from the first equation about ROE, return of net operating income on equity, with an independent variable, debt ratio. It is constructed with several parameters, ROS(return of operating income on sales), TAT(total assets turnover), and NFCL(net finance cost to liabilities). There could not be a certain relationship between debt ratio and ROS or TAT, while some correlation or causality between debt ratio and NFCL. In other words, most of firms with high debt ratio is likely to burden higher finance cost than others with low one. In this case, there is a linearity relationship between debt ratio and NFCL, so then the second equation considering this relation could be included within the analytical approach of this paper. To be short, if the criteria of adequate debt ratio has to be defined as some level of debt ratio to optimize ROE, the ROE could be illustrated as a quadratic equation to debt ratio from two equations. Next, this research estimated those parameters' numbers through the single regression method with data over 12 years of Korean shipping industry, and identified empirically the fact that optimal debt ratio would be approximately 400%. To conclude, if that industry's sales and operating incomes are stable, the debt ratio could be accepted until twice of 200% had forced in order to guarantee its financial safety in past time.

• Journal of the Korea Academia-Industrial cooperation Society
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• v.19 no.3
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• pp.301-308
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• 2018

This study explores an analytical mathematical model designed to estimate the optimal debt ratio of the Korean automobile industry, which has a more significant effect on the national economy than that of other industries, and attempts to estimate the optimal debt ratio based on objective data. The analytical model is based on ROA and ROE which uses the debt ratio as an independent variable and employs ROS, TAT, and NFCL as the related parameters. Regarding the NFCL, the optimal debt ratio is usually defined as the debt ratio that maximizes the ROA and ROE and is calculated using analytical procedures, such as by adding an equation that considers the debt ratio and the linearity relationship to the analytical model. This is because the optimal debt ratio can be calculated reliably by making use of an estimated value within a certain range, which is derived from more than two calculations rather than a single estimation starting from one calculation formula. In this study, for the estimation of the optimal debt ratio, the ROA and ROE are expressed as a quadratic equation with the debt ratio as the independent variable. Using this analysis procedure, the optimal debt ratio obtained using the data from the Korean automobile industry over a sixteen year period, which would optimize the profitability of the Korean automobile industry, was found to be 188% of the debt ratio in the ROA and 213% of the debt ratio in the ROE. This result was obtained by overcoming the problem of the reliability of the estimation value in spite of the limitations of the logical theory of this study, and can be interpreted as meaning that maintaining a debt ratio of 188% to 213% can enhance the profitability and reduce the risks in the Korean automobile industry. Furthermore, this indicates that the existing debt ratio of the Korean automobile industry is lower than the optimal value within the estimated range. Consequently, it is necessary for corporations to change their future debt ratio policies, given that the purpose of debt ratio management is to maintain safety and increase profitability, and to take into account the characteristics of the specific industry.

• Journal of the Korea Academia-Industrial cooperation Society
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• v.18 no.4
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• pp.135-142
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• 2017

This study employs an analytical mathematical model to estimate the optimal debt ratio of Korean agricultural corporations, more sensitive to the government debt ratio policy compared to other industries, and the estimation of the optimal debt ratio based on objective data. The analytical model utilizes the equation for ROE, with the debt ratio as an independent variable, and related parameters include ROS, TAT, and NFCL. Regarding the NFCL, the optimal debt ratio standard is defined as the debt ratio that maximizes the ROE by analytical procedures such as adding an equation concerning the debt ratio and a linearity relationship to the analytical model, and from these equations, a quadratic equation with the debt ratio as an independent variable describes the ROE. This methodemploys fourteen years of corporate data. Results show that 138% of debt ratio is the optimal debt ratio to increase the ROE of the corporations, which implies that the existing debt ratio of Korean agricultural corporations is higher than optimal. Consequently, it is required for authorities to change future debt ratio policies in view that the purpose of debt ratio management is to maintain safety and increase profitability.Management should emphasize characteristics of the specific industry rather than standardized judgements based on numerical indexes.

• Journal of the Korea Academia-Industrial cooperation Society
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• v.15 no.4
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• pp.1932-1937
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• 2014

This paper examines whether debt ratio effects earnings management. There are various methods that estimate earnings management. This paper examines whether these methods impact on the relationship between earnings management and debt ratio. In addition, this study examines whether these relationship effects of debt type. Previous studies in this area haven't examined the relationship between debt ratio and earnings management in Korea. These studies didn't consider earnings management's method to analysis for this relationship. This paper tests the relationship between earnings management and debt ratio with methods of earnings management unlike from previous studies. Results are summaried as following. First, the relationship between debt ratio and earnings management was different for these methods. Abnormal Accruals that used estimation of eanrnings management in previous studies didn't examine these results that debt ratio effects of earnings management. However, it was significant positive the relationship between real activity management and debt ratio.

• Journal of Digital Convergence
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• v.12 no.6
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• pp.115-123
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• 2014

The first, this study analyzed empirically the effects of net profit on sales, total asset turnover and debt ratio on return on equity, the second, verified debt' s mediating effect on return on investment and return on equity and finally, tested the effect of adjusted debt ratio on return on equity in the small medium sized enterprises. Generally speaking, using debt has a positive effect on return on equity. Meanwhile, using debt accelerate return on equity through leverage effect in the quadric function curve model. Eventually, using debt has a positive and negative effects on return on equity. Accordingly, because of the debt' janus-faced reality, using debt is restricted within the level that operating cash flow(or return on asset) excess interest(or rate of interest).

• The Journal of the Korea Contents Association
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• v.17 no.6
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• pp.98-105
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• 2017

The medical institution considers liability management problems as a direct factor in managerial risks, such as bankruptcy. Cash Flow provides useful information to necessary funds and predicting bankruptcy. The study for 24 general hospitals and 23 hospitals, a regression analysis was performed to determine the impact of cash flows on the debt repayment capability, a multivariate discrimination analysis was conducted to find out how to manage cash flow for the risk posed by debt. The analysis results, For general hospitals, the level of debt repayment capability was done to net income, increase of payables from operating activities and decrease of patient receivables and inventories from operating activities. If there is no dept repayment capability, it is necessary to increase the net income, increase the expenses not involving cash outflows, decrease of patient receivables and increase of payables from operating activities. For hospitals, the level of debt repayment capability was done to net income, increase of expenses not involving cash outflows and payables from operating activities, decrease of income not involving cash inflows, decrease of patient receivables and inventories from operating activities. If there is no dept repayment capability, it is necessary to increase of payables from operating activities.

• Journal of Digital Convergence
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• v.17 no.3
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• pp.79-92
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• 2019

This study analyzes the effects of freight transportation income, capital, asset, non-operating expenses, and debt ratio on the debts of inner port freight transportation businesses through the GLS of panel regression analysis and the estimation of fixed effects model. The factors and hypotheses were established through a theoretical background review, and the financial statement and profit and loss data of inner port freight transportation businesses for 10 years from 2006 to 2015 were analyzed. The results showed that assets had positive effects on debts, and negative effects on capital, non-operating expenses, and debt ratio, but no effect on freight transportation income. This result empirically demonstrates the tendency of inner port freight transportation businesses to secure assets by increasing debts, creation of debt reduction leverage effect using non-operating expenses such as interest expenses through bank borrowing, and the adoption of management characteristics and financial operation method to lower the debt ratio by reducing capital more than debts. In future studies, it is necessary to analyze coastal port freight transportation business by industry (oil tankers, cargo ships, and barge ships), and regions such as East, West and South sea.

• The Korean Journal of Financial Studies
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• v.10 no.1
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• pp.73-105
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• 2004

1997년 말 우리나라의 경제위기는 외화보유고의 부족에서 비롯된 것이나 근본적으로는 1996년부터 시작된 한보, 삼미, 기아그룹 등 우리나라 재벌기업의 연쇄도산으로 대변되는 기업의 실패에서 기인하였다. 지난 30년 간 빠른 성장을 지속해 온 우리나라 기업이 90년대 후반부에 총체적 부실의 위기에 직면하게 된 것은 기업외적인 요인보다도 과다차입과 과잉투자, 전근대적인 지배구조 등의 기업 내부적 요인에서 주로 기인한 것으로 지적되고 있다. 그러나 일반적으로 기업실패의 원인으로 지적되는 과다차입과 과잉투자는 문제에 대한 정밀한 진단 없이 국민정서에 부응하여 인구에 회자되는 면이 없지 않았다. 따라서 본 연구에서는 지난 40여년간 높은 부채비율을 유지하면서도 고도성장을 지속해 온 우리나라 기업이 왜 90년대 말에 와서 그것으로 인하여 도산하게 되었는지에 대한 심층적인 분석을 도모하고자 하였다. 분석 결과 우리나라 기업의 연쇄도산은 80년대 말 이래 급격하게 변화된 영업환경으로 인하여 기업의 영업위험이 커진 것이 직접적인 원인으로 작용하였으며 높은 부채비율은 총위험을 줄이지 못했다는 점에서 기업도산의 간접적인 배경을 형성한 것으로 나타났다. 또한 우리나라 기업이 지난 30여년간 투자수익이 자본비용에 못미치는 것으로 드러나 과잉투자를 해 온 것은 사실이나 과잉투자의 배경은 일반 물가상승률을 크게 상회하는 높은 지가상승에 있었으며 또한 80년대까지 정부의 성장에 대한 인센티브와도 직결되어 있었다.

• Journal of the Korea Convergence Society
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• v.10 no.12
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• pp.299-305
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• 2019

This study analyzed the relationship between the debt ratios of Korean and Japanese manufacturing firms with accruals and actual earnings managements after the global financial crisis. This study was conducted on Korean and Japanese firms from 2008 to 2015. As a result, the Korean firms, the higher (lower) debt ratio is, more up(down)side earnings management using discretionary accruals and operating cash flow. In contrast, the Japanese firms found that the higher(lower) the debt ratio is, more up(down)side through its actual activities (operating cash flows, manufacturing costs, discretionary costs) rather than accruals. This study establishes the academic basis for the decision-making of Korean-Japanese firmss by using the sample of each country to check what kind of decision-makers are making earnings managements at the present time when the relationship between Korea and Japan has suffered due to export restrictions. It is meaningful in that it was.