Operating Liquidity and Financial Leverage: Evidences from Indian Machinery Industry

Goel, Utkarsh; Chadha, Saurabh; Sharma, Anil

doi:10.1016/j.sbspro.2015.03.230

Cited by 35 publications

(34 citation statements)

References 6 publications

(4 reference statements)

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“…They use a sample size of 4,374 firms during the period 1979-2010; they acquire these data from Center for Research in Securities Prices. Goel, Chadha, and Sharma (2015) report that the impact of financial leverage on operating liquidity is significant in Indian machinery firms. Their sample data are obtained from CMIE database for the period 2004-2005 and 2012-2013; the sample data include 151 Indian machinery firms.…”

Section: Determinants' Relationship On Financial Leveragementioning

confidence: 99%

Effect of determinants on financial leverage in Indian steel industry: A study on capital structure

Dakua

2018

Int. J Fin Econ

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Because India is neither a developed country nor its steel companies are financially self‐sufficient, they are bound to depend on the external capital, resulting the decision to be taken on the leverage ratio as even more crucial. India being the top exporter of iron ores has the potential to be counted as one of the top exporters of steel if the steel companies follow optimal capital structure. Thus, the leverage ratio needs thorough investigation in order to decide the optimal capital structure. Although there have been some attempts, they are not extensive. The objective of this study is to empirically investigate the present capital structure of Indian steel industry from years 2010 until 2017 and the determinants of capital structure and how these determinants correlate with financial leverage. The research objectives are (1) to identify the significant determinants that affect the capital structure and (2) to conduct an extensive and empirical research in order to estimate the correlations of the determinants with the financial leverage. Seven key determinants have been found: They are profitability, asset structure, size, growth opportunities, non‐debt tax shield, liquidity, and risk. The profitability is found to be highly correlated with the debt ratio as was expected and reported in previous studies. The correlations among the determinants such as asset structure, size, and non‐debt tax shield are statistically significant. Profitability and liquidity carry positive relationship with debt ratio, although there is a negative relationship between debt ratio and asset structure.

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Section: Determinants' Relationship On Financial Leveragementioning

confidence: 99%

Effect of determinants on financial leverage in Indian steel industry: A study on capital structure

Dakua

2018

Int. J Fin Econ

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“…In this vein, as leverage gets lower, the cost of financing increased working capital falls down. Goel, Chadha and Sharma (2015) assert that financial leverage is positively correlated with the cash conversion cycle (CCC) and financial leverage has significant effect on current ratio and has a positive relation. Financial leverage has negative relationship with the liquidity measure.…”

Section: Business and Economic Researchmentioning

confidence: 99%

“…The relationship between borrowed and owner's investment in the capital structure of an organization is determine by financial leverage. It includes preferred equity, common equity, and debt that are used to finance the firm's operations, assets and financial growth (Goel, Chadha and Sharma, 2015). Firms need external debt in financing their operation activities, solely depending on equity poses high risk of not meeting market demands.…”

Section: Introductionmentioning

confidence: 99%

The Interaction of Financial Leverage and Firm's Operational Efficiency

Coleman

Baidoo

2020

BER

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The study examines the effect of financial leverage on operational efficiency. This study used a panel data of 102 non-financial companies listed on Nigeria and Ghana stock exchange for the period 2012 – 2016. It was revealed that there is an S-curve relationship between financial leverage and working capital management and cash holding. Also there is a significant moderating effect on the relationship between internationalization and dividend payout. This implies that firms that are involved in international activities are highly concerned with having borrowing as part of their capital structure than solely operating with owners’ capital which might be the case of most domestic firms. Relationship between financial leverage and working capital management and cash holding is considered to be non-monotonic which gives management insight of choosing the right leverage management policy to achieve desired goal.

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“…The age of the firm is measured as the difference between the year of the information gathering, and year of the initiation of the business (Autio, Sapienza & Almeida, 2000). Financial leverage denotes the overall liability reported to the firm, which reflects its capacity to attract external financial resources (Bhardwaj, 2018;Goel, Chadha & Sharma, 2015;Lestari & Riyadi, 2018;Malshe & Agarwal, 2015;Sodeyfi, 2016).…”

Section: Control Variablesmentioning

confidence: 99%

Strategic Resources and Firm Performance: An Application of the Resource Based View

Hussain¹,

Waheed²

2019

LJB

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Under the influence of the framework that defines the Resource Based View, the purpose of this paper is to examine the contribution of the strategic resources (intellectual capital) that create value for the firm. More specifically, we assess the effect of intellectual capital on operating, financial and stock market performance of the firms listed in the personal goods sector of Pakistan Stock Bourse, for the period of 2005 to 2014. The notion of intellectual capital is measured by intellectual capital efficiency, and the “value added intellectual coefficient” method proposed by Pulic (1998), which comprises of capital employed efficiency, human capital efficiency, and structural capital efficiency. The results depict that intellectual capital has a significant, positive effect on operating and financial performance of the firms, while capital employed resources have an insignificant, and mixed effect on operating and financial performance of the firms. This means that the more the firms will accumulate intellectual capital resources, the higher will be their operating and financial performance. Capital employed resources have a significant, positive effect on stock market performance of the firm, and intellectual capital also affects stock market performance, but this relationship is insignificant in nature. The accumulated effect of all the resources (physical & intellectual) shows a positive relationship with the performing areas of the firm in the sector.

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Operating Liquidity and Financial Leverage: Evidences from Indian Machinery Industry

Cited by 35 publications

References 6 publications

Effect of determinants on financial leverage in Indian steel industry: A study on capital structure

Effect of determinants on financial leverage in Indian steel industry: A study on capital structure

The Interaction of Financial Leverage and Firm's Operational Efficiency

Strategic Resources and Firm Performance: An Application of the Resource Based View

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