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Impact of Financial Leverage on Cash Flow Ratio: A Comparative Study Between MNCs and Domestic Companies Listed on DSE
Syed Mohammad Khaled Rahman,
Md. Tahidur Rahman
Issue:
Volume 5, Issue 5, September 2017
Pages:
177-184
Received:
20 June 2017
Accepted:
6 September 2017
Published:
16 October 2017
Abstract: Financial structure decisions have strategic role on owners’ welfare and also on survival of companies. Every company is supposed to maintain its optimum capital structure, although its measurement is very difficult. Based on secondary data the study intends to analyze and compare the impact of financial leverage on cash flow ratio of Multinational Companies (MNCs) and domestic companies listed on the Dhaka Stock Exchange (DSE) over a period of 20 years starting from 1996 to 2015. A total of 14 companies consisting of seven MNCs and equal number domestic companies were selected as sample from six industrial sectors. The explained variable of the study was Cash flow ratio (CFR), whereas the explanatory variables were indicators of financial leverage such as: Debt to assets ratio (TD/TA), Debt to equity ratio (TD/SE) and Debt to capital employed ratio (TD/CE). The study has found that Debt to asset ratio is positively related but Debt to equity ratio is negatively related with CFR in domestic companies. A mere 1% increase in Debt to asset ratio and Debt to equity ratio result in 0.501% increase and 0.03% decrease of CFR respectively. In MNCs, unlike domestic companies, Debt to asset ratio is negatively related, whereas Debt to equity ratio is positively related with CFR. For 1% increase of Debt to equity ratio, CFR decrease by 1.5% and vice-versa. On the other hand, for 1% increase in Debt to equity ratio, CFR increases by 0.0039% and vice-versa. The study concludes that financial leverage ratios have significant influence on cash flows of domestic companies but not on cash flows of MNCs in Bangladesh.
Abstract: Financial structure decisions have strategic role on owners’ welfare and also on survival of companies. Every company is supposed to maintain its optimum capital structure, although its measurement is very difficult. Based on secondary data the study intends to analyze and compare the impact of financial leverage on cash flow ratio of Multinational...
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Analysis of the Critical Success Factors of Integrated Financial Management Information Systems in Selected Kenyan Counties
Issue:
Volume 5, Issue 5, September 2017
Pages:
185-192
Received:
3 May 2017
Accepted:
19 May 2017
Published:
23 October 2017
Abstract: This study sets out to analyze the critical success factors of integrated financial management systems in selected county governments in Kenya. The study focused on the following objectives: perceived benefits, top management commitment, change management, human capital development and technological infrastructural development as success factors for IFMIS implementation at county governments. A descriptive survey was adopted targeting 135 county employees who use IFMIS in selected counties. The research sample size consisted of 45 county employees in Kiambu, Bungoma, Machakos, Nairobi and Nakuru counties. The study involved finance departments of two counties with significant financial wastage and 3 counties with good financial records. The sampling technique used was snowballing sampling technique which involved 45 participants. Questionnaires were the main tool for data collection. A pilot study was conducted using 10 IFMIS employees in Mombasa County. It enabled the researcher to improve on reliability of the instrument used and familiarize researcher with data collection process. Data obtained was both quantitative and qualitative. Quantitative data was coded and keyed into an SPSS package for statistical analysis. The study revealed that change management, technological infrastructure, human capital development and top management commitment are all critical success factors in adoption of IFMIS in county governments. The study recommends that for IFMIS implementation to be very effective and efficient in enhancing transparency and accountability within the counties: change management should be handled better; the National treasury and Counties should organize regular skills advancement courses on IFMIS, encourage phased implementation and testing of the financial management software. A political class support is mandatory at county levels to ensure good financial management and hence reduced corruption.
Abstract: This study sets out to analyze the critical success factors of integrated financial management systems in selected county governments in Kenya. The study focused on the following objectives: perceived benefits, top management commitment, change management, human capital development and technological infrastructural development as success factors fo...
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Deadly Incidents in Bangladeshi Apparel Industry and Illustrating the Causes and Effects of These Incidents
Md. Morshadul Hasan,
Appel Mahmud,
Md. Samiul Islam
Issue:
Volume 5, Issue 5, September 2017
Pages:
193-199
Received:
27 August 2017
Accepted:
22 September 2017
Published:
28 October 2017
Abstract: The purposes of this paper are to explore the major deadly incidents of the apparel industry in Bangladesh and to illustrate the causes for these deadly incidents with the effect of these incidents. Different types of deadly incidents of the recent decade have made Bangladeshi apparel industry questionable. This paper will explore the causes of the different incidents and will show the precautionary measure of these problems of apparel industry which affected their sustainability and profitability.
Abstract: The purposes of this paper are to explore the major deadly incidents of the apparel industry in Bangladesh and to illustrate the causes for these deadly incidents with the effect of these incidents. Different types of deadly incidents of the recent decade have made Bangladeshi apparel industry questionable. This paper will explore the causes of the...
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Revaluation of Fixed Assets Before IPO: A Study on Textile Industry in Bangladesh
Issue:
Volume 5, Issue 5, September 2017
Pages:
200-205
Received:
12 September 2017
Accepted:
23 September 2017
Published:
2 November 2017
Abstract: The textile and clothing sector of Bangladesh contributes more than 81 percent of foreign exchange earnings of the country. Considering the number of companies listed on the Dhaka Stock Exchange (DSE), textile was the second largest sector having 44 companies after insurance. Around fifty percent companies of the sector became listed on the DSE through Initial Public Offerings (IPO) during the period of January 2010 to March 2016. The study, based on prospectus data, intended to explore the practice of pre-IPO revaluation of fixed assets by textile industry in Bangladesh. Related objective of this study was to find out the factor(s) that influence(s) the growth of revaluation amount. Among the years under study, the highest number of textile companies became listed on DSE during 2014 and 2015 that accounted for about 55 percent growth of the sector. In the midst of controversies and doubts about the application and fairness of asset revaluation practice, a large number of textile companies in Bangladesh have been found revaluing their fixed asset as an option outlined in IAS 16. Thanks to the revaluation of fixed asset, average Net Asset Value (NAV) of textile companies raised from BDT 16.95 per share to BDT 28.54 per share with an increase of 68.38 percent. The study has observed an average increase in the value of fixed assets by 42 percent with a minimum of 4 percent and a maximum of 130 percent. Intensity of fixed assets has been found to have significant negative influence on the growth of fixed assets. This implies that textile companies which have low percentage of fixed assets on total asset observed hefty growth of fixed asset after revaluation. It is expected that the outcomes of the study will be useful to regulators, investors, financial analysts, and academics. Reporting of fixed assets in current market prices would assist investors and others make unbiased predictions about firms’ future performance. However, the condition is that asset revaluation should be made with utmost fairness and transparency.
Abstract: The textile and clothing sector of Bangladesh contributes more than 81 percent of foreign exchange earnings of the country. Considering the number of companies listed on the Dhaka Stock Exchange (DSE), textile was the second largest sector having 44 companies after insurance. Around fifty percent companies of the sector became listed on the DSE thr...
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