Dependency of return on equity and use of finance sources in building companies in v4 countries

Růčková, Petra

doi:10.15240/tul/001/2015-3-007

Cited by 4 publications

(3 citation statements)

References 12 publications

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“…Various statistical methods are used to analyse the factors determining the level of ROE based on the DuPont-a model, such as regression models [66,76,77,[95][96][97][98], Generalised Method of Moments (short timelines) [99,100], a logarithmic and functional method within the multiplicative linkage [93], the Ordinary Least-Squares (OLS) method [79,95], and the deterministic (differentiation) method [66].…”

Section: Methodsmentioning

confidence: 99%

Determinants of Return-on-Equity (ROE) of Biogas Plants Operating in Poland

et al. 2022

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Poland has a large potential for biogas production from agricultural sources and food waste. This potential is still poorly used. There are many reasons for this state of affairs. We can indicate both the policy of the state towards renewable energy sources (RES) with a small amount of energy from biogas contracted at auctions, investment risk, and especially low return on investment in the absence of investment support. An important reason is also the limited state budget. The purpose of this work was to determine the endogenous factors that determine ROE, the direction of the impact of these factors, as well as the strategy of biogas plants in shaping the ROE level. The DuPont model was used in the analysis of ROE changes. We used the deviation method to determine the impact of the various factors on ROE. Against the background of the energy sector in Poland, the value of ROE in the examined biogas plants should be considered satisfactory, and in 2020 it was, on average, 13.9%. The decrease from 17.2% in 2019 occurred despite the increase in energy prices and the increase in the net profit margin (NPM). It resulted from the reduction of ROE’s financial leverage through external capital. A high level of debt characterized the examined biogas plants, and the pursuit of risk reduction and debt reduction negatively impacts on ROE. This may indicate the need for state investment support at the plant construction stage or low-interest investment loans to develop biogas plants. In addition, using only price guarantees under the feed-in tariffs, with dynamic changes in costs, may bring the industry a relatively high investment risk compared to other RES, where the operational costs during the lifetime are low, as it is in PV or wind systems.

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Section: Methodsmentioning

confidence: 99%

Determinants of Return-on-Equity (ROE) of Biogas Plants Operating in Poland

et al. 2022

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“…This means that when the level of liquidity increases, there is usually a decrease or stagnation in pro tability. (Růčková, 2015) In this respect, the availability of funds can therefore be limiting in terms of pro tability, which is important for business owners. This leads to the question of whether there will be a different relationship between pro tability and liquidity at different levels of ownership concentration.…”

Section: Literature Reviewmentioning

confidence: 99%

Financial Management Among Selected Automotive Leaders in the EU: Essential Techniques to Investigate the Structure of Moments While Using the GMM With Dynamic Panel Data

Růčková

Heryán

Cerulli

2023

Preprint

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Despite interest in financial management, few studies have considered paying attention to the ownership structure among stockholders. Two alternative approaches related to the ownership structure are generally regarded as the leading cause of different management behaviours. First, managers should be less controlled in the case of less concentrated ownership with many owners, and thus could be more willing to not cooperate in the interests of owners. Second, vice versa, the less concentrated ownership structure causes the more pronounced control of management, and hence the pressure on its functioning. The results of this paper have proven the second approach in one country and just suggested the first among two different countries belonging to the EU leaders within the automotive industry. Furthermore, this study reveals that, without deploying techniques, subsequently introduced a modified version of GMM estimators with panel data by providing an implementation using Stata statistical software. Otherwise, these particular econometric tools to analyse a dynamic panel can often give false significant estimates. JEL classification:C58, D25, E21, G39

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“…The level of risk in the development sector, measured by the amount of the alternative cost of equity, decreased significantly from 24.63% in 2008 to 13.63% in 2018. It can be stated that the average return on equity reflects the development of construction activity in the Czech Republic (Růčková, 2015). The return on equity (ROE) in the industry in 2018 was 12.69%, the alternative cost of equity was 13.63% and the risk-free rate…”

Section: Introductionmentioning

confidence: 99%

National and Foreign-controlled Companies Operating in Development Activities in Czechia and Aspects of their Capital Structure Management

Kalová

Brychta

2021

SHS Web Conf.

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Research background: Entities operating in the field of development activities show significant specifics, including a high level of indebtedness. Given the nature of development projects, which are long-term, and their financial complexity, companies take, at the same time, high risks. Therefore, there is need of a high standard of financial management and risk management in this type of companies. Purpose of the article: The aim of the paper was to provide information regarding return on equity and point out the risk factors of financial management. A partial aim of the conducted preliminary research was to identify and evaluate selected differences in financial management of national companies and foreign-controlled companies. Methods: The research was conducted as mixed research. It started with the undertaking of qualitative research focused on textual analysis of the text and collection of selected relevant quantitative data. For evaluation, we used INFA methodology, which links financial controlling and risk controlling indicators. The data under investigation were those related to the evaluation of return on equity in relation to risks taken. The indicators of the assets, self-financing ratio and debt ratio were assessed, including the assessment of the impact of these factors on return on equity and taken risks. Findings & Value added: The research provides new knowledge regarding the extent to which equity capital is used in the financial management of companies operating in the Czech Republic in development activities. The results indiciate that companies under foreign control and domestic companies show differences in financial structure and financial stability indicators, as well as in the effectiveness of using their capital.

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Dependency of return on equity and use of finance sources in building companies in v4 countries

Cited by 4 publications

References 12 publications

Determinants of Return-on-Equity (ROE) of Biogas Plants Operating in Poland

Determinants of Return-on-Equity (ROE) of Biogas Plants Operating in Poland

Financial Management Among Selected Automotive Leaders in the EU: Essential Techniques to Investigate the Structure of Moments While Using the GMM With Dynamic Panel Data

National and Foreign-controlled Companies Operating in Development Activities in Czechia and Aspects of their Capital Structure Management

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