The purpose of the research is to determine the effect of return on assets, debt to asset ratio (DAR), currentratio (CR), firm size, and dividend payout ratio (DPR) to the firm value of manufacturing companies listed in Indonesia Stock Exchange for the period 2013-2016. The sampling method was purposive sampling techniques and obtained from 32 samples out of 138 firms that met the criteria. The analysis technique applied was a multiple regression analysis. The research found that the return on asset and firm size have effects on firm value, DAR, CR, and DPR, but do not affect firm value. This paper shows that return on asset has an effect firm value, DAR does not effects firm value, firm size has an effect firm value, and payout ratio has no effect on firm value.
Fawad Hussain has concluded that Z-score model is accurate for bankruptcy predictions in Pakistan, he examined 21 Textile companies (12 stable and 9 bankrupt) listed in KSE through Z-Score Model. In that Study bankruptcy predictions of Z-Score model is investigated for four years prior to bankruptcy and concluded that Z- score Model is good predictor for bankruptcy predictions (Fawad Hussain, Iqtidar Ali, 2014). Another Study Conducted on Sugar sector, companies listed on KSE by applying Z-Score and CurrentRatio. Total population sampling technique was used in the study and so all thirty five sugar companies listed on stock exchange were taken for analysis purpose. The output of the research indicated that currentratio and Altman’s Z-Score Model are trustworthy tool for measuring financial health of sugar sector listed companies of KSE (Ijaz & Hunjra, 2013) Other Study showed the Comparison of Z-Score and Currentratio for the assessment of financial health of Malaysian Listed Firms. The results revealed that both models are successful in determining the differences of bankrupt and non-bankrupt firms. (REF) (Alkhatib & Al Bzour, 2011) Examined the Jordanian listed companies which were liquidated in 1990-2006, by applying Altman model for predicting bankruptcy. 16 firms were bankrupt out of 32 firms. The study concluded that Altman’s Model has ability to predict the bankruptcy and showed 75% precision rate for the 5 th year, 94% for the 4 th and 100% for the third year. It also concluded that prediction frequency of Z-Score is better than Kida’s Model (Alkhatib & Al Bzour, 2011).
Abstract- Banking is the fastest growing economy in India. A major consequence faced by banks nowadays is Non – Performing Assets. A high level of NPA in banks will increase the credit values and affects the profit of banks. Thus, the banks will lose their investment for the long turn. The main objective of the study is to highlight the NPA trend growth of each banks and the Correlation Analysis of Net Profit and Net NPAs of each bank. The study is descriptive in nature and secondary data are collected and analyzed using Trend Ratio, CurrentRatio, Assets on Equity Ratio and Pearson Correlation Co-efficient Analysis to examining NPAs, Net Profit and Assets quality of banks. The study is observed for the financial years from 2013-14 to 2017-18, Annual Reports of Selected Private Sector Banks such as Axis Bank, Federal Bank, IndusInd Bank. The trend analysis is used to understand the increasing profitability and bad loans structures in the banks and Correlation Analysis is used to compare the Net NPA and Net Profit. Through the study, it was concluded that IndusInd Bank is having positive growth in Net Profit as well as growth in NPAs which is not affecting the banking performance when comparing with other two banks.
The study is primarily based on secondary data and therefore annual reports of the selected cement companies were approached and calculations were made out of it. The period of the study taken in this research is five years which ranges from financial year 2012-13 to 2015-17. The research is based on two companies UltraTech Cement and India Cement. These companies are selected because UltraTech Cement is the biggest company in terms of market capitalization and profit whereas India Cement is at the bottom in the list of top ten cement companies. The study used multiple linear regression to examine the impact of various proxy variables of working capital on ROCE (return on capital employed) of UltraTech Cement and India Cements. Table 1 highlights the Research Model of the study. The independent proxy variables for working capital are taken as currentratio (CR), inventory turnover ratio (ITR), and debtors turnover ratio (DTR) whereas ratio of ROCE (return on capital employed) was taken as dependent proxy variable for profitability.
The purpose of this research is to know how profitability and liquidity ratios influence the growth of profit of manufacturing companies sector food and beverages listed on Indonesia Stock Exchange period 2010-2012. The variables examined in this thesis are currentratio, quick ratio, cash ratio, gross profit margin, return on asset and return on equity as the independent variables and profit growth as the dependent variable. The collection of secondary data was done by taking it from the financial statements of manufacturing companies of food and beverages sector listed on Indonesia Stock Exchange during the period 2010-2012. The analysis method used is descriptive quantitative using the program of Eviews 7.0. The results of this research indicates that simultantly currentratio(CR) , quick ratio (QR), cash ratio, gross profit margin, return on assets, and return on equity have significant influence towards the growth of profit. Partially, all the six independent variables have no significant influence towards the growth of profit of manufacturing companies of food and beverages sector listed on Indonesia Stock Exchange during the period 2010-2012.
CurrentRatio has an influence on stock returns, meaning that the higher the CurrentRatio (CR) will result in fewer net profits generated by the company. Debt to Equity Ratio has an influence on stock returns, meaning that every company policy in determining the use of funds in company operations will affect the company to make a profit. The composition of the debt that is too large will reduce the company's profit because in this condition the company must pay a higher loan interest expense. Assets Growth has an influence on stock returns, meaning companies that have a large growth in total assets will be easier to get the attention of investors and creditors because it reflects the company is able to generate profits that are used to increase the number of assets which can then increase the value of the company through stock returns. Inflation has an influence on stock returns, meaning that high inflation rates usually result in economic conditions experiencing demand for products that exceed the product supply capacity, so prices tend to increase. High inflation can reduce the level of corporate income and the number of stock returns obtained. Return on Assets has a positive influence on stock returns, meaning that the higher the level of profitability of the company will increase stock returns.
The data and information required for this study comes in the secondary data. The data has been mainly collected from the Annual Reports, budgets and statistical Reports of the company. Apart from these some of the data has been collected through personal interview and discussions with the concerned executives of the corporate. For analyzing data, statistical techniques like simple regression analysis and multiple regressions are used for analyzing the data. For this empirical study one major private sector sugar industry namely Balrampur Chinni Mills Limited (BCML) has been purposively selected. The study covers a period of 10 years (2001-02, to 2010-2011). The present study is focused on understanding the impact of efficient working capital management on the profitability and liquidity of the company. Further in order to identify the influence of profitability, a linear multiple regression models were used. For this purpose, currentratio (CR), liquid ratio (LR), Working capital Turnover (WTR), Receivable Turnover Ratio (RTR), Creditor’s Turnover Ratio (CTR), (all indicators working management policies and practices ) have been taken as the independent variables and Profit before tax (PBT) to total assets ratios is taken as dependent variable. However, in the course of analysis, it was found that ITR is highly correlated. Therefore, ITR is removed for the analysis. The model taken was given under.
currentratio, quick ratio, interest rate, exchange rate and STDV which are positive correlation with ROA. Currentratio, quick ratio and STDV are small significant related with ROA because each of them has p-value <0.1 (0.083, 0.093 and 0.085 respectively) but interest rate and exchange rate show that they are insignificant related with ROA (p- value more than 0.1). On the other hand, the table 4.3 shows that debt to income ratio, operational ratio, CGI and GDP is negative insignificant correlation with ROA (p-value of them >= 0.1). Debt to income ratio is an important ratio to monitor when applying for credit. In addition, inflation rate is negative small significant correlation with ROA with 0.065 (p- value < 0.1). While, the average collection period is high negative correlation with ROA (- 0.897) and it is moderate significant related to ROA where its p-value is < 0.1 & < 0.05 (0.02). It means that when the average collection period increases the ROA will decrease significantly and vice versa.
A sol-gel method was applied with acetates as precursors under standard atmospheric conditions to fabricate ZnO semiconducting thin-films. We evaluated the performances of thin-film transistor (TFT) which has a ZnO active channel layer and the effects of stannum (Sn) doping on the threshold voltage of ZnO TFTs at a low temperature (300 ℃), which was compared with the performances of the un- doped ZnO and stannum-doped zinc oxide (ZTO) TFT. The electrical characteristics of thin-films and TFTs doped with stannum concentrations of 0.3 mole ratio were examined; and reductions at the threshold voltage of 5.6 V were found. At 300 ℃, it was observed that the stannum-doped zinc oxide (ZTO) device has a mobility of 4.2 × 10 −4 cm 2 /V-s, a threshold voltage of 5.3 V, and an on/off currentratio of 10 4 .
According to Bhunia (2010) liquidity plays a significant role in the successful functioning of a business firm. A firm should ensure that it does not suffer from lack- of or excess liquidity to meet its short-term demands. There are various methods for analyzing liquidity for a business enterprise. Liquidity ratios used in liquidity management by each organization in the form of a currentratio and quick ratio. Quick ratio has a significant effect in the course of operation in which high ratio level will enable the company to avoid immediate payment and non-payment of debt or dependence on debt. While the currentratio (containing cash and near-cash assets such as inventories) could be an indication of short-term debt repayment capability and long-term installment payment by an organization (Saleem and Rehman, 2011). Therefore both ratios provide good indicator for assessing level of liquidity management in an organization.
Short term financing decisions are important financing decisions in the domain of a finance manager. A wrong decision in this regards will not only affect the ability of the business to pay obligations on time, also known as liquidity position of the business but also the ability of the business to earn profit, also known profitability of the business. Hence, working capital decisions affect both liquidity and profitability position of the business. Working capital management implies managing the current assets and current liabilities of the business optimally. In this paper, an attempt is made to study how the working capital management affects the overall profitability of the business by taking an example of a leading company from oil and refinery sector in India, which is Oil and Natural Gas Corporation ( ONGC). The study takes into account the some of the important working capital ratios like currentratio, quick ratio, working capital ratio, inventory turnover ratio, debtor turnover ratio, working capital to total assets ratio and how each one of them affect the profitability of the business which measured in terms of PBD divided by Owner’s equity. The study is based on the data of five years from 2010-11 to 2014-15.
The data presented in Table 1 were extracted from the annual financial statements of the respective banks. The computation of the ratios for each bank is shown as Appendix A. From the Table, the current ratios (current asset to current liability) of the various banks show some distinctive but similar characteristics. Specifically, the Table reveals that the currentratio of some of the banks (First Bank, UBA, Zenith Bank, Access Bank, Diamond Bank, Fidelity Bank, Stanbic-IBTC Bank, Wema Bank) is greater than 1. This means that the current assets of these banks provide more than 100 % coverage for current liability. While this might be a good liquidity management practice it should also be recognized that it implies tying down of investable funds.
When considering the currentratio and acid-test ratio, THY has a declining trend and there is an increasing trend for Pegasus. The reason for the decreasing trend in the return on assets ratio of THY is the increasing rate of short-term liabilities, which is higher than the current assets. In view of Pegasus, current assets growth rate is faster than that of the short-term liabilities. The current ratios are less than 2 for both companies. It shows that aggressive working capital policy is applied. Considering the high costs to be effective in the aviation industry, both of the company's working capital management is considered efficient and companies can maintain the activities without experiencing any debt payment difficulties.
Currentratio indicates how the management can be able to meet current liability which demand deposits with the current asset. The lower currentratio is more preferable to measure the ratio of current assets. Furthermore, the high of current asset ratio can indicate that a bank has more liquid assets. A lower ratio is a sign for liquidity as more of the assets are long term in nature. Thus, the higher the ratio, the higher the liquid assets of the management or the bank. Credit risks are known as the risk of default on a debt that may arise from a borrower fail to make required payments. According to the Invetopedia it definite that the credit risk is significantly affected by GDP Growth, housing price indices, unemployment rates, interest rates, credit growth, real exchange rates and the recent financial crisis. W Waemustafa, S Sukri (2015) found that the formation of credit risk includes, inappropriate credit policies, poor lending practice, limit institutional capacity, volatile interest rate, poor management, inappropriate laws, direct lending, massive licensing of banks, low capital and liquidity risk, laxity in credit assessment, and poor lending practice. Therefore, credit risks are important for any management or bank to know the ability to repay any payment back later.
The present paper examines the Financial Strength of the identified units in the steel industry in India in terms of short- term solvency and long-term solvency. Companies are selected for the study from the ‘A group of steel companies’ listed in the stock exchanges in India. Data have been collected for a period of ten years ranging from 2003-04 to 2012-2013. The important variables used in the study includes currentratio, quick ratio, absolute liquid ratio, debt-equity ratio, total assets to debts ratio, long-term debt to net working capital, proprietary ratio, fixed assets to net worth ratio, and interest coverage ratio. To evaluate the impact of these selected variables on the Financial Strength of the steel industry, ANOVA-Test is used.
From table 4, it is inferred that there has been a close positive correlation between currentratio and liquidity ratio in ICL (0.978), followed by CC (0.831). There is a moderate positive correlation between the liquidity ratio and super quick ratio and defensive internal ratio in ICL and CC. There is a high degree of co-efficient of correlation between super quick ratio and defensive internal ratio in ICL and CC. The inventory to working capital ratio of the ICL and CC had negative correlation coefficients with other liquidity ratios.
At first two years scenario of currentratio and quick ratio are much more above than the standard level. Those assets may have unused or earned little. In case of short term obligations to pay suppliers, creditors, lenders etc. paying days have been decreasing significantly from year to year, whereas collection days more are less same which may causes liquidity problems for Beximco Pharmaceuticals.
This study aims to find out the impact of working capital management on profitability. Return on assets is used as a proxy of profitability. Other variables that are used in this study are Currentratio, debt to equity ratio, operating profit to debt ratio, and inventory turnover ratios of the firms. Secondary data of electrical equipment firms listed on Karachi stock exchange was taken for a period of six years i.e. 2007-2012. Regression analysis was applied to the data. Normality and linearity test was also applied. Results showed significant positive results. It is concluded that working capital management has positive significant impact on profitability of the firms.
It is clear from the above calculations that the currentratio is Medium Average. We cannot say that the Co operative society,waroli is having higher solvency. Hence steps have to be initiated to increase the sales as well as liquidity of the society. During the year 2012-13 the currentratio was not good. The current assets are just equal to the current liabilities. However during the year 2008-9 there was great improvement in the liquidity position of the society. It is concluded that the overall Liquidity is Good of the Cooprative society has to be increased and the management has to Improw its currentratio and current responsibility Position.
DOI: 10.4236/ojmsi.2017.54017 234 Open Journal of Modelling and Simulation other electronic equipment manufacturing, electrical machinery and equipment manufacturing), 10 listed companies belong to software and information tech- nology services, and the remaining 16 listed companies belong to other sectors. This article chooses four categories of 12 financial indicators to analyze the competitiveness of the above 87 listed companies. The first category reflects the solvency: currentratio, quick ratio, equity ratio. The second category reflects the operating performance: receivables turnover, current asset turnover, total asset turnover. The third category reflects the profitability: operating margin, net profit margin and return on total assets. The fourth category reflects growth ca- pability: total asset growth rate, net profit growth rate and net asset growth rate. These 12 indicators are recorded as X X 1 , 2 , , X 12 . According to the 2016 an-