Influence of some financial indicators on return on equity ratio in the Romanian energy sector - A competitive approach using a DuPont-based analysis

Bunea, Ovidiu-Iulian; Corboş, Răzvan-Andrei; Popescu, Ruxandra-Irina

doi:10.1016/j.energy.2019.116251

Cited by 50 publications

(47 citation statements)

References 28 publications

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“…As (UK) businesses are required to publish financial statements, financial ratios 3 can be used to characterise LEBs' financial status. Financial ratios are established tools used by many actors to support decision-making related to business stability and growth [40]. They have been used since the beginning of the 20th century, initially to assess credit-worthiness [41][42][43].…”

Section: Theoretical Backgroundmentioning

confidence: 99%

“…Such indicators have allowed comparative assessments of companies' financial status [50,51]. As financial ratios are derived from financial statements, their applicability transcends specific industries [52], making them a useful measure of financial status of businesses, including energy businesses [40,[53][54][55][56][57][58][59].…”

Section: Theoretical Backgroundmentioning

confidence: 99%

“…[40] Bunea OI, Corbos RA, Popescu RI. Influence of some financial indicators on return on equity ratio in the…”

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confidence: 99%

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Local energy businesses in the United Kingdom: Clusters and localism determinants based on financial ratios

González

Webb

Sharmina

et al. 2022

Energy

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This paper presents the first financial analysis of the United Kingdom's local energy business sector. This analysis 17 relies on financial ratios and degrees of localism as inputs for descriptive statistics, cluster, and canonical 18 discriminant analyses. Our findings suggest that privately-owned energy businesses, typically with limited 19 commitments to localities, account for the great majority of sectoral assets and turnover, and are in comparatively 20 good financial condition. Highly-local energy businesses typically have low profitability and a high reliance on 21 debt. The latter is the key variable differentiating them from other less local energy businesses. Moreover, we find 22 financial commonalities within different groups of local energy businesses, which correlate with their specific 23 level of localism. In the context of increasing digitalisation in energy markets, more technological innovation may 24 help strengthen local energy businesses' revenue sources and value creation. Further research is needed in terms 25 of investability, specific financing terms and conditions, and geographical aspects of value creation, retention, and 26 delivery to localities. This work can improve the understanding of sectoral dynamics and development needs, with 27 value for policy making to incentivise investment in this emerging sector.

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Section: Theoretical Backgroundmentioning

confidence: 99%

Section: Theoretical Backgroundmentioning

confidence: 99%

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Local energy businesses in the United Kingdom: Clusters and localism determinants based on financial ratios

González

Webb

Sharmina

et al. 2022

Energy

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“…While the financial ratio of ROE measures the capability of a company in generating income from the company's investments of its shareholders' equity, in which it reflects how much the profit a company can earn from every value of the utilization of its shareholders' equity (Brobbey, 2017). ROE is also categorized as a potential measurement for the interested parties, especially for investors, in propose to know the company's efficiency in utilizing its source of fund from shareholders' equity to generate better company's profit (Bunea et al, 2019). It is basically concerned with how much profit a company can generate in comparison with total amount of shareholders' equity invested in the company.…”

Section: Literature Reviewmentioning

confidence: 99%

Factors Affecting the Performance of F&B Industry in Malaysia and Indonesia

Fawzi

Sunarti

2021

JECO

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This study investigated the influence of financial ratios on company’s performance in Malaysia and Indonesia F&B industry period 2011 – 2018. The samples generated 37 F&B companies and 12 F&B companies listed on Bursa Malaysia and Indonesia Stock Exchange respectively. By using multiple regression analysis for panel data, the study revealed that CR and DER had no influence on ROA, while TAT and NPM had positive effect on ROA. Also, CR and DER had no influence on ROE in Malaysia F&B industry, but then, these variables had positive effect on ROE in Indonesia F&B industry. While TAT and NPM had positive effect on ROE. This paper is expected to provide beneficial information to related parties to take better consideration on the actual variables having significant effect on company’s ROA and ROE. This paper is also academically expected to be a beneficial reference for further research development.Keywords: F&B Industry, financial ratios, company’s performance, Indonesia, Malaysia. Faktor-Faktor yang Mempengaruhi Kinerja Industri Makanan dan Minuman di Malaysia dan Indonesia Abstrak: Penelitian ini bertujuan untuk menganalisis pengaruh rasio keuangan terhadap kinerja perusahaan di industri makanan dan minuman di Malaysia dan Indonesia periode 2011 - 2018. Sampel penelitian adalah 37 perusahaan makanan dan minuman yang terdaftar di Bursa Malaysia dan 12 perusahaan makanan dan minuman yang terdaftar di Bursa Efek Indonesia. Hasil penelitian dari analisis regresi berganda untuk data panel menunjukkan bahwa CR dan DER tidak berpengaruh terhadap ROA, TAT dan NPM berpengaruh positif terhadap ROA. CR dan DER tidak berpengaruh terhadap ROE pada industri makanan dan minuman di Malaysia, namun berpengaruh positif terhadap ROE di Indonesia. TAT dan NPM berpengaruh positif terhadap ROE. Makalah ini diharapkan dapat memberikan informasi keuangan yang bermanfaat bagi manajemen perusahaan terkait untuk lebih mempertimbangkan variabel aktual yang berpengaruh signifikan terhadap penilaian ROA dan ROE pada perusahaan. Makalah ini juga diharapkan secara akademis dapat menjadi referensi yang bermanfaat untuk pengembangan penelitian selanjutnya.Kata kunci: industri makanan dan minuman, rasio utang terhadap ekuitas, kinerja perusahaan, Indonesia, Malaysia

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“…Such analytical models usually start with the formal mathematical definitions for specific measures of profitability. These are disaggregated based on fundamental theoretical interrelations, such as the so-called DuPont identity or the financial leverage effect (Bunea et al 2019). Empirical studies on profitability often use the parameters of such decomposition models as predefined sets of independent variables for regression models on profitability (Burja and Marginean 2014) or as subjects of specific research (Mishra et al 2012).…”

Section: Earnings Before Interest and Taxes Rocementioning

confidence: 99%

European benchmarking of determinants of profitability for companies with accrual accounting in the agricultural sector

Beyer¹,

Hinke²

2020

AGR ECON-CZECH

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In this study, differences in common measures of profitability, such as return on sales, return on capital employed and return on equity, are analysed in agricultural firms with accrual accounting in 10 European countries. The resulting differences in profitability are broken down using an additive decomposition method, which addresses the quantified impact of several affecting factors. This approach is based on a ratio system, which follows the principles of the DuPont identity. According to the general intention of benchmarking, the leading country within the sample for each measure of profitability provides the relevant reference point, representing best practice. This approach provides insight into the specific comparative strengths and weaknesses of the agribusinesses in the countries within the sample and indicates useful starting points for effective improvements. In addition to the value-creating operations, this involves, in particular, labour productivity, the efficient use of fixed assets and the degree of debt financing.

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Influence of some financial indicators on return on equity ratio in the Romanian energy sector - A competitive approach using a DuPont-based analysis

Cited by 50 publications

References 28 publications

Local energy businesses in the United Kingdom: Clusters and localism determinants based on financial ratios

Local energy businesses in the United Kingdom: Clusters and localism determinants based on financial ratios

Factors Affecting the Performance of F&B Industry in Malaysia and Indonesia

European benchmarking of determinants of profitability for companies with accrual accounting in the agricultural sector

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