The study attempts to show the impact of working capital management on the profitability of ninety-eight Kosovo-based SMEs, primarily in the manufacturing and construction sectors. The data were obtained from the financial statements of these companies for the years 2010 through 2020, and the assumptions were verified using the Ordinary least square (OLS) method. To express SMEs profitability, return on assets (ROA) is taken as a dependent variable, while to express working capital management, independent variables are taken: the inventory turnover period (INTP), receivables collection period (TRCP), trade payable period (TPP), and cash conversion cycle (CCC). In addition, are taken four control variables (size of companies, current ratio, sustainable growth, and leverage), which are not a variable of interest in the study but could influence the outcomes. The results reveal that SMEs increase profitability by decreasing the cash INTP and increasing TRCP, TPP, and CCC. By analyzing the effect of working capital management on profitability in the context of SMEs in Kosovo, this research contributes new knowledge to the existing literature.
The main goal of the present research is to address the role and importance of audited financial statements in increasing the efficiency of credit risk management in the banking system of Kosovo. In addition, the research will help users understand the financial statement assurance process and the audit process work for a proper assessment of credit risk by banks. The research is treated in sections as below: the first section includes a review of literature (theoretical and empirical review) related to theoretical concepts regarding the importance and development of financial statement audit at financial institutions, in region and beyond. The second section includes a general overview of the relationship between audit of financial statements of clients that establish financial relations with banks and credit risk management. The third section presents the results of the survey and the confirmation of the formulated hypotheses. The last part of the paper presents conclusions and recommendations that have arisen from our study. The main method during our research has been the use of qualitative/quantitative analysis, which has been carried out during various techniques, among which the main ones are the survey interviews & internal observation of processes based on our own professional experience in the banking channels. The paper aspires to provide a better understanding of challenges in assuring qualitative accounting information for decision-making, as well as presents the basis for further study of this issue in the future. The results of the study aim at adding the value to regulatory bodies’ documents such as politics/strategies/instructions and also setting new rules in regard to credit risk management.
This paper provides guidance for all those interested in research related to tax. In the study are included three main areas dealing with taxes and about taxes: (1) the role of information in corporation tax expenditures under the rules and laws of the country against financial statements according to international accounting standards, (2) case study PTK; how much effective tax and tax on extra profit has it paid (3) the impact of tax rules on investment decisions - the reasons and profits of the company and the host country. We will try to summarize here the three areas of study and come to some conclusions on how to deal with fiscal policy in Kosovo. In addition, we will offer our opinion on some interesting and important questions for future research.
Profitability expresses the ability to make a profit from all the business activities of the company. It shows how efficiently management generates profit by utilizing all available resources. This paper examined the effects of specific company factors, namely independent variables such as: liquidity, company size, company age, tangible asset, leverage, company capital and growth of com-pany, on profitability represented by return on assets (ROA) and net profit margin (NPM) as a dependent variable. The sample in this study includes eleven insurance companies for the period 2015 - 2020. The regression results indicate that size, leverage and age of company, have significant effects on the ROA. Meanwhile in NPM of insurance companies in Kosovo size of company and firm growth have significant effects.
This study analyzes the impact of auditing on the financial performance of insurance companies in Kosovo. The data of the companies that are used are for the period 2015-2020. The data are panel type. Through Gretl software, with OLS we tested our hypotheses. As a dependent variable (measure of financial performance) we used ROA, while as independent variables we took the leverage, firm age, firm size, firm capital, tangible assets, liquidity and firm growth. We also tested the ROA ratio as a variable dependent on specific factors of insurance companies (independent variables). While their relationship with the audit was tested using the following three variables as representatives for the audit: the size of the audit firm, the mandate / term of the audit firm and the relationship between the audit firm and the insurance firm (rotation). From all the models we have tested, trying to exhaust all the possibilities of testing for the possible impact of external audit on the performance of insurance companies in Kosovo, we have noticed that the most important or statistically significant variables are the size of the firm, leverage, and growth of the firm. From audit variables, only the audit mandate has turned out to be positive and significant, in the performance of audit companies in Kosovo. Therefore, insurance companies in Kosovo should pay significant attention to these variables, of course trying to increase the role of external audit in their performance.
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