Determining the impact of financial performance factors on bankruptcy risk: an empirical study of listed real estate companies in Vietnam

Nguyen, Van Tinh; Nguyen, Nga Thi Viet; Le, Oanh Thi Tu; Nguyen, Trong Than

doi:10.21511/imfi.16(3).2019.27

Cited by 8 publications

(11 citation statements)

References 11 publications

Supporting

Mentioning

Contrasting

Unclassified

Order By: Relevance

“…So, in the first or second year, retained earnings are not of particular importance. Asset holders typically deposit about 30% so that in order to finance the remainder of investments, the real estate firms have to use large loans from banks (Nguyen et al, 2019).…”

Section: Resultsmentioning

confidence: 99%

“…Vietnamese real estate market is known as a young but budding market 1 and hence the variation of the market is large, mainly conditional on macro-economic conditions (Nguyen et al (2014) for a review). Additionally, the market is sensitive to government policies (Quang and Kammeier (2002), Nguyen et al (2019) for a review). Unlike other sectors and countries, Vietnamese real estate firms also encounter more financial and default risks than other ones 2 .…”

Section: Asian Economic and Financial Reviewmentioning

confidence: 99%

“…Basically, Vietnamese real estate firms do not tend to intensively invest and always incur a higher rate of interest than other firms, resulting in low efficiency. Overall, Vietnamese real estate firms are more likely to face financial and default risks stemming from the inability of the payment of loans (Nguyen et al, 2019).…”

Section: Literature Review and Hypothesis Developmentmentioning

confidence: 99%

See 2 more Smart Citations

Untitled

2019

Asian Economic and Financial Review

View full text Add to dashboard Cite

The purpose of this paper is to investigate the relationship between risk and stock returns for Vietnamese real estate stocks. We used the three-factor model and took advantage of the differences in the Vietnamese real estate market to introduce the fivefactor model including three factors explained by Fama and French (1993) and two additional factors namely asset liquidity and financial leverage for testing the correlation between risk and stock returns for Vietnamese real estate stocks. Our empirical findings from a comprehensive secondary data set of stocks listed on both the Hochiminh Stock Exchange (HOSE) and Hanoi Stock Exchange (HNX) between 2011 and 2016 showed that the required rate of return was driven not just by market risk, but also by other factors such as value, liquidity and financial leverage. Specifically, market risk was positively related to the expected rate of return. Liquidity risk premium was positively correlated with stock returns. The relationship between size risk and stock returns was also significantly positive for small sized companies, which is contrary to the negative relationship for large sized companies. Additionally, the HML factor was negatively and positively correlated with the rate of return for large sized and small sized firms, respectively. Contribution/ Originality: Our novel contribution is that we took advantage of the characteristics of real estate market in a developing country as Vietnam to use the five-factor model to investigate the relationship between risk and stock returns for listed real estate firms.

show abstract

Section: Resultsmentioning

confidence: 99%

Section: Asian Economic and Financial Reviewmentioning

confidence: 99%

Section: Literature Review and Hypothesis Developmentmentioning

confidence: 99%

See 1 more Smart Citation

Untitled

2019

Asian Economic and Financial Review

View full text Add to dashboard Cite

show abstract

“…Net profit margin shows the percentage of each remaining dollar sale after all costs and expenses, including interest, taxes, and preferred stock dividends, have been reduced (Bordeianu and Radu, 2020;Mulyadi et al, 2020). Operating profit margin measures how much profit a company makes on sales before paying interest or tax (Nguyen et al, 2019). It is a measure of the long-term performance of companies (Lukic, 2018).…”

Section: Economic Profitability Ratiomentioning

confidence: 99%

Directions for Management in Small and Medium Hotels and Restaurants Companies

Lucas¹,

Ramires²

2022

GTG

View full text Add to dashboard Cite

The primary goal is to validate if there is a relationship between liquidity and economic profitability in hotels and restaurants sectors, in small and medium companies (SMCs). The question to be answered is whether the short-term view will not compromise the future results of those companies. After a literature review, hotels and restaurants financial ratios were analysed over 5 years. Data were also treated using linear regression, to understand if there is a relation between liquidity and economic profitability. All the financial information was obtained from the SABI database. According to the studied literature, it was not expected to have any relationship between liquidity and economic profitability. The study consists of the Portuguese context in the latest 5 years period before COVID-19, in the hotels and restaurants sector, and it does validate those previous studies. Indeed, findings show no relationship between both ratios. Findings show to hotels and restaurants managers that liquidity-based management does not necessarily lead to future economic profitability. Even if liquidity is necessary for accurate short-term management, it shall not be used to guide them in the decision-making process concerning economic profitability. The results obtained are of enormous importance to both practitioners and academics. Managers must understand that they must take into account the need for liquidity in a short-term vision, but they must also understand that this fact alone is not a guarantee of good profitability in a long-term vision. The results in the empirical study also help to reinforce the inexistence of a relationship between the liquidity ratio and the economic profitability ratio in the literature.

show abstract

“…(Linna, 2019) The purpose of using the bankruptcy instrument is to liquidate the assets of the debtor and then be distributed to all creditors, according to the degree of each creditor (Gawron, 2019). Bankruptcy risk will be felt by not only bankrupt companies but by all stakeholders so that it will affect the economy at large (Nguyen, 2019). The bankruptcy law instrument is expected to function as an alternative law instrument to more, efficiently, effectively and balance to settle debtor's debts to creditors.…”

Section: Introductionmentioning

confidence: 99%

Legal Restriction of Bankruptcy of State-Owned Enterprise (Seo) and Sustainability: The Case of Indonesia

Shubhan

Indrawati

2020

HSSR

View full text Add to dashboard Cite

Purpose of Study: This research examines the possibility of state-owned enterprises being nailed in the legal system in Indonesia. According to the bankruptcy regulation in Indonesia, those who are unable to pay debts can be declared bankrupt by the creditors, including SOEs. However, other regulations state that the government’s assets (including those within SOEs) cannot be confiscated, including within bankruptcy confiscation. Methodology: The research method used in this study is qualitative research using the type of doctrinal law research. The approach used is to use the statutory approach, conceptual approach, and case approach. Data from this study were obtained from commercial courts in Jakarta and Surabaya. Main Findings: This study found that there was a desynchronization of the regulations regarding the SOEs’ bankruptcy, i.e., between the Bankruptcy Law and the other laws, and even points within the Bankruptcy Law itself. The example that can be taken in this study is PT Kertas Leces /Limited Liability Company (LLC) Kertas Leces) that had already gone bankrupt and experienced confiscation of its bankrupt assets. Implications: The ideal bankruptcy model for SOEs is that the bankruptcy applicants for SOEs in the form of public companies or state-owned companies should be the Minister of Finance. The Ministry of Finance is responsible for the operational policies and supervision of SOEs, amounting to approximately 115 companies in the form of public companies or state-owned companies, including those that have already gone public and those which have not. Novelty: Previous studies have only focused on the assets of state-owned enterprises that have been separated and therefore bankrupt. This study examines another matter, namely that not all state-owned enterprises can be declared bankrupt and found one state-owned bankruptcy.

show abstract

Determining the impact of financial performance factors on bankruptcy risk: an empirical study of listed real estate companies in Vietnam

Cited by 8 publications

References 11 publications

Untitled

Untitled

Directions for Management in Small and Medium Hotels and Restaurants Companies

Legal Restriction of Bankruptcy of State-Owned Enterprise (Seo) and Sustainability: The Case of Indonesia

Contact Info

Product

Resources

About