Capitalization of Operating Lease and Its Impact on Firm's Financial Ratios

Nuryani, Nunung; Heng, Tan Thing; Juliesta, Nadya

doi:10.1016/j.sbspro.2015.11.034

Cited by 23 publications

(22 citation statements)

References 19 publications

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“…Before reviewing the benefits of financial leasing, it is crucial to keep in mind the existence of mutual interest of the parties in the leasing deal. The main benefits for lessees are: fiscal and economic allowances regarding leasing deals, reduction of initial financial burden due to balanced and periodical volumes of payments [ 8 ], for new companies and start-ups, with no initial financing, leasing may be the only source of funding. …”

Section: Resultsmentioning

confidence: 99%

Financial Leasing as a Funding Instrument: Benefits and Opportunities

Salomatina

Lebedeva

2020

Lecture Notes in Networks and Systems

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Limited capacity in usage of the borrowed funding sources, high loan pressure, macroeconomical and geopolitical instability and current reorganization of all banking system – these are the reasons why the development of financial leasing in Russia is now discussed at a practice level, and that is why scientific researches in this field are relevant. Currently, as productive state-owned and private capital stocks are being formed or renewed, the organizations experience an extreme lack of financial resources. Financial leasing in this situation seems an adequate and relevant investment tool with high effectiveness rates, financial difficulties aid and possibilities of raising a capital. The goal of the article is to justify the benefits of financial leasing in comparison to other funding tools, and to review current trends in development of leasing services. To achieve the goal mentioned, the authors used a systematic approach in order to analyze the problem in complex and to propose concrete steps for the solution.

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Section: Resultsmentioning

confidence: 99%

Financial Leasing as a Funding Instrument: Benefits and Opportunities

Salomatina

Lebedeva

2020

Lecture Notes in Networks and Systems

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“…The finding shows that all determinants except financial constraints influence operating lease policies, although most operating leases are explained by factors other than economic determinants (Nuryani, et al, 2015).…”

Section: "The Objective Of the Lease Project Is To Develop A Standamentioning

confidence: 91%

“…Many scholars have studied leases (Barone et al, 2014); while some of them have focused on the effect on stock market prices (Ro, 1978, Bowman, 1980, most of them have focused on the analysis of the impact of capitalization of operating leasing on key financial ratios (Ashton, 1985, Imhoff, Lipe, & Wright 1991, Beattie V. et al, 1998, Goodacre, 2003, Durocher, 2008, Jesswein, 2009, Grossman & Grossman 2010, Singh, 2010, Fitò, Morgan & Orgaz, 2013, Nuriani, Hengb, & Jeliesta, 2015.…”

Section: "The Objective Of the Lease Project Is To Develop A Standamentioning

confidence: 99%

The Effects on Financial Leverage and Performance: The IFRS 16

Magli¹,

Nobolo²,

Ogliari³

2018

IBR

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This paper analyses the potential impacts of the introduction of a new accounting standard, International Financial Reporting Standard 16 (IFRS 16) -Leases, on financial leverage and performance of entities. This new accounting standard was introduced on 13 January 2016, and will become effective on 1 January 2019; it will have material impacts on the financial statements of listed companies adopting IFRS and change the basic principles of the current accounting system. Our aim is to estimate the impacts of the application of IFRS 16 on listed issuers of financial statements and the different impacts that the new standard could have in different activity sectors. This research estimates the effects of IFRS 16 on the ratios of debt/total assets, EBITDA/revenues and debt/equity. The conclusions summarize the effects on entity performance and net financial position. The research shows that in the financial statements of the lessee, there will be important changes. In particular, in the balance sheet, there will be an increase in lease assets, an increase in financial liabilities and a decrease in equity, while in the income statement, there will be an increase in EBITDA and an increase in finance costs. The impact of the application of IFRS 16 will be different depending on the use of operating lease contracts among the different business sectors. Leases are an important and flexible source of financing; listed companies, using IFRS and U.S. GAAP, are estimated to have around US$ 3.3 trillion in lease commitments. Finally, this study aims to analyse the possible impacts of communication of entities, focusing on alternative performance measures.

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“…Financial ratio is a comparison between the two elements of the financial statements that show an indicator of financial health at a particular time [7]. Ratios as a mathematical relationship disclosure of an amount by the number of other or comparison between the one post with a post to another.…”

Section: Financial Ratiosmentioning

confidence: 99%

The Impact of the Capital Adequacy Ratio, Non-Performing Loan Against to Return on Equity (Case Study Private Bank in Indonesia)

Sebayang

2020

SHS Web Conf.

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Banks in Indonesia always pay attention to the Capital Adequacy Ratio (CAR) to obtain adequate bank performance, while also paying attention to Non-Performing Loan (NPL). Banks want a high Return on Equity (ROE) to be able to be declared healthy and the bank's performance is also very good. Banking companies always make financial reports related to the banking performance. This study has two objectives namely, first to examine the effect of Capital Adequacy Ratio (CAR) on Return on Equity (ROE). Second, to examine the effect of Non-Performing Loans (NPLs) on Return on Equity (ROE) in foreign private banks that have been determined by the government. This study uses multiple regression analysis techniques using a sample of 20 banks. The test results show that there is an increase in capital Adequacy Ratio (CAR) that will be able to increase the Return on Equity (ROE) of foreign private banks in Indonesia. Increased Non-Performing Loans (NPLs) can have a positive effect and increase Return on Equity (ROE). Simultaneous tests carried out obtained the variable Adequacy Ratio (CAR) and Return on Equity (ROE) to have a joint impact on the Return on Equity (ROE) of private banks.

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Capitalization of Operating Lease and Its Impact on Firm's Financial Ratios

Cited by 23 publications

References 19 publications

Financial Leasing as a Funding Instrument: Benefits and Opportunities

Financial Leasing as a Funding Instrument: Benefits and Opportunities

The Effects on Financial Leverage and Performance: The IFRS 16

The Impact of the Capital Adequacy Ratio, Non-Performing Loan Against to Return on Equity (Case Study Private Bank in Indonesia)

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