• The Journal of Asian Finance, Economics and Business
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• v.8 no.3
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• pp.423-431
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• 2021

This study aims to examine the effect of liquidity, activity, leverage, and profitability on firm value, as well as the effect of disclosure of corporate social responsibility (CSR), which in this study is a moderator and company size as a control variable. The sampling technique used in this study is a purposive sampling method with certain criteria, to obtain a sample of 22 LQ45 index companies listed on the Indonesia Stock Exchange in 2014-2019. The data analysis method in this study used was the Multiple Linear Regression Analysis with the SPSS 18 Program. The results show that the ratios of liquidity, activity, leverage, and profitability are significant to firm value in accordance with the initial hypothesis of the study. Corporate Social Responsibility (CSR) plays a role as a moderating variable and company size variable as a control variable on the effect of financial ratios (liquidity, activity, leverage, and profitability) on firm value. The implication of this research is that CSR has a very important role in increasing company value. To attract more investors, companies must pay attention not only to financial performance but also to social performance. Large-scale companies tend to do more CSR so that the company value will increase.

• The Journal of Asian Finance, Economics and Business
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• v.7 no.12
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• pp.1005-1015
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• 2020

This paper aims to propose a Comprehensive Decision Support Model to evaluate retail companies' financial performance traded on the Vietnam Stock Exchange Market. The financial performance has been examined in terms of the valuations ratios, profitability ratios, growth rates, liquidity ratios, efficiency ratios, and leverage ratios. The data of twelve companies from the first quarter to the fourth quarter of 2019 and the first quarter of 2020 were employed. The weights of 18 chosen financial ratios are calculated by using the Standard Deviation method (SD). Grey Relational Analysis technique was applied to obtain the final ranking of each company in each quarter. The results showed that leverage ratios have the most significant impact on the retail companies' financial performance and gives some long-term investment recommendations for stakeholders and indicated that the Taseco Air Services Joint Stock Company (AST), Mobile World Investment Corporation (MWG), and Cam Ranh International Airport Services Joint Stock Company (CIA) are three of the top efficient companies. The three of the worst companies are Viglacera Corporation (VGC), Saigon General Service Corporation (SVC), and HocMon Trade Joint Stock Company (HTC). Furthermore, this study suggests that the GRA model could be implemented effectively to ranking companies of other industries in the future research.

• The Journal of Asian Finance, Economics and Business
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• v.6 no.3
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• pp.67-79
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• 2019

This study examines the impact of corporate governance on capital structure decisions based on a large panel of Chinese listed firms. Using the system Generalized Method of Moments (GMM) estimator to control for unobserved heterogeneity, endogeneity, and persistency in capital structure decisions, we document that the ownership structure plays a significant role in determining leverage ratios. More specially, we find that managerial ownership has a positive and significant impact on firms' leverage, consistent with the incentive alignment hypothesis. We also find that managerial ownership only affects the leverage decisions of private firms in the post-2005 split share reform period. State ownership negatively influence leverage decisions implying that SOEs may face fewer restrictions in equity issuance and may receive favourable treatments when applying for seasoned equity ¿nancing, thus use less debt. Furthermore, our results show that while foreign ownership negatively influences leverage decisions, legal person shareholding positively influences firms' leverage decisions only for state controlled firms. We also find that the board structure variables (board size and the proportion of independent directors) do not influence firms' capital structure decisions. Our findings suggest that recent ownership reforms have been successful in terms of providing incentive to managers through managerial shareholdings to take risky financial choices.

• The Journal of Asian Finance, Economics and Business
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• v.7 no.7
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• pp.49-58
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• 2020

This paper examines the impact of mergers on the financial performance of the Jordanian banking sector. This paper applies the financial approaches in analysing the effects of mergers on Jordanian banks' performance for two the periods: four years pre-merger and four years' post-merger for the period from 2001 to 2009. The sample of the study solely contains the case of the merger of the Jordan Ahli Bank (AHLI bank) with Philadelphia Bank in 2005. Data are tested for normality using the Shapiro-Wilk Test and Kolmogorov Smirnov test. The financial ratios and a statistical technique as a Mann-Whitney U test were used to assess the significant differences in the financial performance of the selected banks pre- and post-merger by investigating the performance-related financial ratio groups that are expressed by leverage, liquidity, efficiency, and cash flow ratio. The results show that there is an insignificant improvement in the ratios of AHLI bank in the period after the merger, except for the superior result provided by this study indicating that the leverage ratios improved significantly. The reason for the insignificant improvement in financial ratios may be that the post-merger period corresponds to the period of the global financial crisis that began in 2007.

• Journal of the Korea Academia-Industrial cooperation Society
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• v.13 no.5
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• pp.2096-2109
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• 2012

This study investigates empirical issues that have received little attention in the previous research in the Korean capital market. It is to find any financial determinants on the capital structure for the firms listed in the KOSDAQ(Korea Securities Dealers Automated Quotation). Another test is performed to find any possible discriminating factors by utilizing a robust methodology, which may distinguish between the firms belonging the 'prime section' and the 'venture section' in terms of their financial aspects. Moreover, the null hypothesis that the changing trend or movement of a firm's capital structure with respect to its industry mean (or median) may be random, is also tested. For the book-value based debt ratios, size(INSIZE), growth(GROWTH), Market to book value of equity(MVBV), volatility(VOLATILITY), market value of equity (MVE) and section dummy (SECTION) showed their statistically significant effects on the book-value based leverage ratios, respectively, while size(INSIZE), growth(GROWTH), market value of equity(MVE), beta(BETA) and section dummy (SECTION) showed their statistically significant effects on the market-value based leverage ratios. This study also found an interesting result that a firm belonging to each corresponding industry has a tendency for reversion toward its mean and median leverage ratios over the five-year tested period.

• The Journal of Asian Finance, Economics and Business
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• v.9 no.2
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• pp.177-183
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• 2022

The COVID-19 pandemic has hurt the economy and negatively impacted all enterprises' financial performance. The COVID-19 pandemic has put a strain on global manufacturing capacity and supply chains, and it is also the pandemic that has given up new opportunities for the logistics industry to develop as e-commerce has developed. By analyzing the financial performance of logistic firms listed on the Vietnam Stock Exchange, this study tries to quantify those consequences. A total of 114 logistic companies were included in the study's sample. The Wilcoxon Signed Rank Test was performed to test the difference between some ratios in 2019 and 2020. This study found that the financial performance of 114 logistic firms listed on the Vietnam stock exchange has not improved. The data show that during the COVID-19 pandemic, the leverage ratio increased while the profitability and efficiency ratios decreased. The liquidity ratio did not show any significant differences. On the contrary, these businesses' performance, such as returns on assets, receivable turnover, and leverage, has decreased. The COVID-19 had a global impact on supply chains, therefore export activity and international transportation were badly hampered, with only a few domestic logistic enterprises growing.

• The Journal of Asian Finance, Economics and Business
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• v.6 no.1
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• pp.91-105
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• 2019

The paper aims to combine balance sheet analysis at the firm level with the International Monetary Fund's public debt sustainability assessment framework to assess state-owned enterprises' (SOE) leverage as a contingent liability to the public sector. Based on company data and the interest coverage ratio as a measure of debt at risk, aggregate baseline scenarios are projected to gauge the magnitude of SOE debt as a contingency. SOE's financial and debt ratios are first bootstrapped to generate firm-level distributions and then averaged into a fan chart of the economy-wide SOE contingent liability. Applied to the People's Republic of China as an example, the study finds that by the end of 2015 SOE leverage had grown to a substantial liability. However arbitrary the assumptions underlying these projections, it would appear that even if authorities had to mop up as much as 20% of SOE debt at risk gone bad, this would have been manageable at roughly 2.7% of the gross domestic product in 2016 or 5.5% by 2021. This projection framework is fully amenable to alternative assumptions and settings, which makes it a useful analytical tool to monitor contingent liabilities from non-financial corporate debt that have been building in emerging and advanced economies alike.

• Journal of the Korea Academia-Industrial cooperation Society
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• v.12 no.2
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• pp.699-711
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• 2011

This study is to perform several major analyses to find any differences in the leverage between the pre- and post-period of the currency crisis. Moreover, another aspect is to investigate a financial aspect which has received relatively little attention to the firms and/or industries in the emerging capital markets in comparison to those in the advanced markets. The purpose of this empirical study is to confirm whether or not, it is myth or reality that Korean business conglomerate, chaebol, firms with subsidized financing from government-owned domestic financial institutions in the pre-financial turmoil, may still maintain their higher leverage, even after the crisis. It was found that firms belonging to the chaebol in Korea maintained higher average book-value and market-value based debt ratios, relative to their counterparts not belonging to the chaebol across all of the tested models. There were positive relationships of IND3(=the chemical industry) and Ind5(=the construction industry) to the book-value leverage. This study identified that there were no differences in the explanatory variables included, between the tested models (that is, without and with including the present value of an operating lease) related to each debt ratio. Since the Korean government continue to improve the corporate governance of the domestic firms in terms of accounting transparency and corporate ownership, it would be more efficient, if utilizing this "new" ratio considering an operating lease as an effective measurement of the level of leverage. In terms of the capital structure, it may also be possible for foreign firms to utilize and benefit from the results obtained in this study when operating their new businesses in Korea, given the economic circumstances such as the ongoing progress of the Korea-America FTA or the Korea-China FTA.

• The Journal of Asian Finance, Economics and Business
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• v.7 no.1
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• pp.47-58
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• 2020

The research aims to investigate the determinants of the financial performance of 1343 Vietnamese companies categorized into six different industries listed on the Vietnamese Stock Exchange over a four-year period from 2014 to 2017 using STATA software. Those determinants include firm size, liquidity, solvency, financial leverage, and financial adequacy while the financial performance is evaluated by three different ratios: return on assets (ROA), return on equity (ROE), and return on sales (ROS). The research results from these companies during the given period indicate that: (1) Firm size has a positive impact on both ROA and ROS, especially ROA but it has the opposite effect on ROE, (2) Adequacy ratio impacts positively on ROA and ROS but negatively on ROE, (3) Financial leverage considerably negative influences on ROE and ROS but positively impacts on ROA, (4) Liquidity has a positive effect on both ROA and ROE but a negative one on ROS and (5) Solvency has a positive impact on ROA and ROS but the negative impact on ROE. Furthermore, agriculture accounted for the highest percentage of profitability at the beginning, which was replaced by service for ROA but manufacture for ROE from 2016 to 2017 as opposed to the least in transportation.

• The Journal of Asian Finance, Economics and Business
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• v.7 no.9
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• pp.329-340
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• 2020

This study investigates the effect of capital structure on the financial performance of pharmaceutical enterprises which are listing on Vietnam's stock market. The study builds the regression using ROE as dependent variable and four independent variables, including self-financing, financial leverage, long-term asset and debt to assets ratios. In addition, we use other variables as controlling ones, such as firm size, fixed asset rate and growth. We collect data for the period from 2015 to 2019 of all 30 pharmaceutical enterprises which are currently listing on Vietnam's stock market. The least square regression (OLS) is used to test the effect of capital structure to the firms' financial performance. The analysis results show that the financial leverage ratio (LR), long-term asset ratio (LAR) and debt-to-assets ratio (DR) have positive relationship with firm performance, meanwhile the self-financing (E/C) affects negatively to the return on equity (ROE). Upon the findings we suggest that the Vietnamese government should focus on stabilizing macro environment to create favorable environment for enterprises. And the pharmaceutical enterprises should build more reasonable capital structure with higher debt proportion than equity, diversifying loan mobilization channels such as issuing long-term bonds. Additionally, the firms should expand the scale appropriately to maintain development and ability to pay debts.