Purpose -This study seeks to identify financial characteristics that can be employed to assess and predict corporate financial distress in publicly traded firms quoted in the London Stock Exchange. Design/Methodology/Approach -The model incorporates three existing literatures as an alternative to bankruptcy. The model has two stages: the first stage discriminates financially healthy or distressed firms utilizing Binary Logit Regression while in the second stage with the use of the univariate analysis, firms are further categorized into four possible outcomes: financially healthy, potentially healthy targets and financially distressed or potentially distressed acquisition targets. Findings -It was found that financial distress could be identified even three years prior the event. Moreover, statistical significant differences were found between the four firm sample groups. Research limitations / implications -The vast changing environment and the financial crisis, highlight the need for future research on the area that will consider the world trade implications along with the individual macroeconomic variables of each country. Originality / Value -It is the first time that a model is developed for the United Kingdom to follow the hazard model"s procedure based on recent financial data. Moreover, due to the scope of the analysis, a new version of the latter procedure is employed. A further innovation that makes the produced model unique is its ability to classify a firm into one of several a priori groupings according to the latter"s individual characteristics. This overcomes the limitation of earlier studies that considered only two possible outcomes for firms.
<p>The purpose of our research is to analyze Acquired and Acquiring companies in the Maritime Transport sector in order to determine whether the two groups can be distinguished from each other based on their different financial characteristics. Although this area of research is considered as very fruitful by many academics, it was given less attention due to the rare sequence of such events and the difficulty to gain access to valuable data. The authors are not aware of any other papers that have examined the maritime transport sector in such a way in the past.</p><p>However, since many shipping companies have taken the opportunity to access stock markets around the world, in order to gain equity finance to upgrade or expand their merchant fleets, their financial statements became public. Moreover, the fact that over the last decades Mergers and Acquisitions are considered by many managers as very efficient method of company expansion, the view of the past that considered Mergers & Acquisitions in the maritime sector as a difficult area of research is starting to change.</p><p> The study will be based upon a sample of 60 companies, consisting of 37 targets (either through merger or acquisition), occurring during the calendar years from 1994 to 2009 and 23 acquirers (some of them multiple acquirers). In the analysis, ratios measuring different aspects of business activity will be investigated; such as profitability, liquidity, efficiency and leverage, with the utilization of multiple Logit Regression Analysis.</p>
The demolition market assists in balancing the supply and demand in the shipping industry and is a major driver of market equilibrium and the level of freight rates. Even so, literature related to ship demolition, focuses mainly on the environmental and regulatory aspects of the topic. Literature related to the economic analysis of the industry and the factors affecting demolition activity is rather limited and sporadic. From this perspective the current paper is helpful to further build up insight of the shipbreaking industry. The decision to sell a ship for scrap is driven by a number of factors with the most important being the state of the market cycle. The offered scrap price for the ship will also affect the decision of the shipowner. In this paper we analyse the process of ship sale for scrap with particular focus on the monetary flows of the ships sale process.
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