Search results for "return on equity"
showing 10 items of 11 documents
THE FINANCIAL PERFORMANCE OF COMMERCIAL BANKS LISTED AND TRADED ON BUCHAREST STOCK EXCHANGE
2015
Even though banks are playing the role of financial intermediaries, their main objective is to obtain profit. The most commonly used indicator of the profitability assessment, according to the shareholder vision is represented by the return on equity. This study has focused on achieving a factor analysis on financial profitability obtained by the top three commercial banks by using the Du Pont. The purpose of this analysis was to identify the causes rate developments. The analysis was done over a period of eight years, respectively from 2007 since 2014. Data were taken from the financial statements published by the three credit institutions. The results have demonstrated that banks in order…
Goodwill and Criteria for its Recognition in Financial Statements
2004
The article summarises a research on goodwill which is one of the most controversial assets. The research includes a comparison between the descriptions of the economic nature of goodwill and an analysis of various valuation methods and accounting policies. The article discusses the internationally recognised problem that there coexist several accepted methods of accounting for goodwill arising from the acquisition of an enterprise, as a result of which the accountancy data of different enterprises and countries are incomparable.
CLUSTER APPROACH AS ONE OF DETERMINANTS FOR INCREASING COMPETITIVENESS OF RIGA FREEPORT
2011
The cluster-based approach offers a new way of dividing and understanding an economy and competitiveness. The main objective of the present study was to reveal the influence of industrial clusters on Freeport’s of Riga business competitiveness and integrated development. The cluster environment stimulates competitiveness and competition inside the cluster and the industry. One of the reasons for the current problems of Latvia’s competitiveness is the low level of business entities’ co-operation and business integration in the national economy of Latvia and the Freeport of Riga in particular. Companies are isolated in their approaches to increasing their competitiveness and entering the glob…
From NGOs to Banks: Does Institutional Transformation Alter the Business Model of Microfinance Institutions?
2017
© 2016 Elsevier Ltd In the microfinance industry an increasing number of providers are undergoing an institutional transformation from NGO to a shareholder-owned and typically regulated financial entity. Little is known about the extent to which this transformation affects the way microfinance institutions (MFIs) conduct their business. Our results obtained by applying an event study methodology to 66 transformed MFIs suggest that portfolio yield is driven down by 3.9 percentage points due to transformation, indicating that clients get more favorable interest rates. MFIs are able to significantly cut down their operational expenses, of which 1.1 percentage points can be attributed to transf…
The Influence of the Endogenous and Exogenous Factors on Credit Institutions’ Return on Equity
2015
Abstract The research’s purpose is to study the credit institutions’ performance, from the shareholders’ point of view, through return on equity (ROE). It aims to identify a dependency relationship between return on equity (ROE) and endogenous factors (the growth rate of credit portfolio, the growth rate provisions, the solvency ratio), on the one hand and, on the other hand between ROE and the exogenous ones (GDP and inflation rate). The research was done over an horizon of 10 years (2004-2013) on the evolution of the return on equity indicator of two credit institutions listed on Bucharest Stock Exchange (Carpathian Commercial Bank SA and Banca Transilvania SA), highlights their vulnerabi…
Assessing the impact of operating lease capitalization with dynamic Monte Carlo simulation
2019
Abstract The European Commission has recently adopted a new accounting standard for leases that will be implemented in 2019, which requires operating lease contracts to be included in the balance sheet, affecting key ratios, leverage and profitability. We simulate the impact of IFRS 16 using Monte Carlo method, which incorporates the uncertainty of the future value of variables when making predictions. Unlike prior studies based on historical data, our study considers a five-year forecast horizon and, more importantly, contemplates several probable scenarios. Based on the STOXX All Europe 100, our results confirm that, in 2019, liability maturity, liquidity and return on assets will decreas…
Does Capital Structure Influence Company Profitability?
2017
Abstract Every company has a different structure of balance sheet. Some of the companies have more liabilities than equity. Considering the industry or debt-to-equity ratio, the balance sheet structure affects the company profitability measured by DuPont system. The main objective of the paper is to analyze the structure of balance sheet and to identify some optimal levels in order to increase company profitability. The DuPont returns like ROA (return on assets) and ROE (return on equity) will be used to measure the company profitability, while the debt-to-equity ratio will be used as a measure (reflection) of capital structure. The samples consist on the most profitable non-financial compa…
ANALYSIS OF THE IMPACT OF EXOGENOUS FACTORS ON THE FINANCIAL PERFORMANCE OF ROMANIAN COMMERCIAL BANKS LISTED ON BUCHAREST STOCK EXCHANGE
2015
The interest of both creditors and debtors of a credit institution on the performance registered by commercial banks imposed shaping high prudential standards designed to not upset the credit institution and to contribute decisively to increase their health profitability. On bank performance it shows a significant influence on many factors. The study focuses its attention on the impact of research that external factors are likely to print to financial rate of credit institutions (one of the classic indicators used to measure bank performance). The variables studied were represented by: - external factors: GDP, inflation and exchange rate leu-euro - considered to be independent variables and…
Classification of Target Markets and Features of Segmentation in Marketing Places
2008
This paper examines target markets and the strategy of marketing places as an economic instrument directed to the development of countries, regions, cities and towns. The authors give a classification of potential target markets of a territory and their characteristics on an example of Latvia.Markets’ segmentation for realizing the strategy of marketing places is of great value as it allows concentrating activity on the most perspective directions of territory development and on methods of particular group attraction. It gives an opportunity to work with separate categories of consumers, to make marketing policy more direct and more expressive, to promote competitiveness of a territory and …
The euro–dollar exchange rate and equity flows
2009
Abstract I examine equity flows between the US and the euro area and their impact on the euro–dollar exchange rate. I explain equity flows by examining the behavior of an international investor who maintains a minimum variance portfolio. An excess of euro area equity returns over US equity returns generates a flow of equity from the euro area to the US. The equity flow, the purchase of US equities by the euro-area residents, causes appreciation (depreciation) of the dollar (euro), while the purchase of euro area equities by US residents causes appreciation (depreciation) of the euro (dollar).