Innovative Financial Indicators: Marketing ROI

Lipták, Katalin; Hajdú, Noémi; Markovics, Klára Szűcsné; Musinszki, Zoltán

doi:10.1007/978-3-030-94672-2_9

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2023

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“…The ROI has countless versions known both in the theoretical literature and in practice. (Lipták et al, 2022) This is because the indicator has several uses. It is used to measure the profitability of individual investments, specific processes (e.g., research, market acquisition, learning).…”

Section: Literature Overviewmentioning

confidence: 99%

Leverage Effect between ROA and ROE During the Covid-Crisis Based on a Hungarian Company Database

Bozsik,

Szemán

2023

TMP

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This paper is devoted to examining two extremely popular financing principles in the practice of Hungarian companies during the Covid-crisis. The leverage effect explains how the Return on Equity can be improved compared to the Return on Assets, the risk matching principle states that the risky assets should be financed mostly from equity and the secure assets should be financed mostly from debt. The Covid-crisis is an excellent opportunity to study the relevance of these principles. The validity of these principles is examined in a sample containing about 30.000 company financial reports. The most important findings are the following: The profitability does not determine the leverage, but the high leverage determines the low profitability. The profitability is the consequence of former decisions about the debt-equity relationship, the debt/equity ratio would be the consequence of the profitability. The risk matching principles cannot be justified by the used sample.

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Section: Literature Overviewmentioning

confidence: 99%