• Journal of the Korea Academia-Industrial cooperation Society
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• v.20 no.11
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• pp.151-156
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• 2019

This study aims to develop a distress prediction model and to evaluate distress prediction power for the food services industry by using 2017 food service industry financial ratios. Samples were collected from 46 food service industries, and we extracted 14 financial ratios from them. The results show that, first, there are eight ratios (financial ratio, current ratio, operating income to sales, net income to assets, ratio of cash flows, income to stockholders' equity, rate of operating income, and total asset turnover) that can discriminate failures in food service industries and the top-level food service industries. Second, by using these eight financial ratios, the logit function classifies the top-level food service industries, and failures in the food service industry can be estimated by using logit analysis. The verification results as to accuracy in the estimated logit analysis indicate that the model's distress-prediction power is 89.1%.

• The Korean Journal of Financial Management
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• v.23 no.2
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• pp.27-56
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• 2006

This paper analyzes whether corporations which have done capital reduction fulfill the objectives of their capital reduction as planned and also asks how did the capital reduced corporations fare in terms of stock returns, by investigating the capital reduced corporations on the Exchange and the Kosdaq between 2000 and 2004. Most capital reduced companies aim to improve their capital structure. Debt to Equity ratio among financial ratios has improved significantly after capital reduction, yet the profitability of corporations wasn't up to expectations. The analysis of cumulative abnormal returns (CARs) indicates that the CARs were below '0' during whole investigation period. Besides, the CARs of companies listed on the Kosdaq have plummeted to -53.5%. Half of the companies on the Kosdaq in this sample which have reduced their capital to avoid delisting have been eventually delisted after capital reduction. This Study concludes that simple capital reduction without having value-added projects is not beneficial to shareholders.

• Asia-Pacific Journal of Business Venturing and Entrepreneurship
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• v.14 no.4
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• pp.179-190
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• 2019

To alleviate financing difficulties of small and medium sized enterprises (SMEs), the government and municipal governments are providing a variety of SME policy funding programs. This study introduced the policy funding program of Gangwon-do and quantitatively analyzed the financial performance of companies supported by the Gangwon-do SME policy fund in the year 2014. Specifically, we compared the financial ratios for three years, from 2013 to 2015, between funded firms and non-funded firms. In addition, we applied a regression analysis to see if the policy funding program contributed to profitability (the operating profit growth and return on equity), stability (the interest coverage ratio and debt-to-equity ratio), and growth (the asset growth and sales growth) of the funded firms. The empirical results show that the firms that received the policy funds did not show any improvement compared to non-funded firms in terms of profitability, stability, and growth. This suggests that Gangwon-do should improve the policy funding program, that currently provides only an interest amount of 2-4% of the corporate loan principal, without any strategic selection criteria for the target funded firms, and without any follow-up management system, after support.

• Korea Trade Review
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• v.41 no.1
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• pp.67-90
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• 2016

This study examines whether there is any significant relation between executive compensation and future firm performance for the Korean export manufacturing small and medium-sized firms. We sorted the whole sample firms into the sub-groups of 10 deciles by firm size and the KSIC standard. We found the following empirical results. First, Korean export manufacturing small and medium-sized firms typically showed lower or even negative profitability in terms of return on equity and operating profit ratio to sales. Foreign equity ownership is very low with an average of 3.77%. Second, for the firms with higher ratio of excess executive compensation to asset had lower future firm performance. It implies that the typical owner-manager in Korean export manufacturing SMEs earns excess pay, but do not contribute much to firm performance. Third, as for future cumulative abnormal returns for future one- and three-year periods, firms with higher owner-executive pay had lower returns compared with firms with lower pay. So the stock market investors set a lower value on them. Fourth, there is a positive relation between excess executive pay and executive overconfidence, and it implies that owner-CEOs with higher pay may become overconfident, thereby lowering future firm performance somehow.

• Journal of the Korea Academia-Industrial cooperation Society
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• v.18 no.2
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• pp.600-608
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• 2017

This study analyzed the management index, debt ratio, and business performance of livestock agricultural farming corporations since the Korea international financial reporting standards (K-IFRS) was introduced in 2011. In addition, this study was based on credible accounting reports by the financial supervisory service's DART (data analysis, retrieval and transfer) system. First, after analyzing the key management index, the results showed that the current ratio, debt ratio, and current liabilities ratio decreased and the ratio of the owners increased on the safety index. Regarding the profitability index, the ROA (return on total assets), ROE (return on equity), and ROS (return on sales) increased slightly in 2014 compared to 2013. The overall growth and external growth on the growth index have not increased. Second, an analysis of the debt ratio and business performance, the debt ratio has a negative effect on the ROA and ROS. These results show that the use of debt of livestock agricultural farming corporations contributes to the external growth but it has a negative effect on business performance. These results show that management should consider solutions for the increase in sales to achieve cost reductions. In addition, the debt ratio should be reduced and solutions for an increase in revenue are needed to reduce management expenses, such as propagation of technical development.

• Asia-pacific Journal of Multimedia Services Convergent with Art, Humanities, and Sociology
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• v.9 no.6
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• pp.773-782
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• 2019

Basel III (Third Basel Accord or Basel Standards) is a global, voluntary regulatory framework on bank capital adequacy, stress testing, and market liquidity risk. Basel III regulatory ratios include capital adequacy, asset soundness, and liquidity. The capital adequacy variables include BIS capital adequacy ratio, BIS tier 1 capital ratio, and tangible common equity ratio. The asset soundness variables include non-performing loan ratio and non-performing loan coverage ratio. The liquidity regulation variables include KRW liquidity coverage ratio and foreign currency liquidity coverage ratio. This study aims to investigate how capital adequacy standard affects efficiency of internet primary banks. As a result of this study, BIS capital adequacy ratio of domestic internet primary banks is lower than that of commercial banks. In order to maintain sustainable operation considering capital adequacy regulations, it is necessary to expand additional capital. In addition, the delinquency rate and non-performing loan ratio of domestic internet primary banks is gradually increasing due to the maturity of high-yield loans in 2019.

• KSCE Journal of Civil and Environmental Engineering Research
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• v.34 no.5
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• pp.1599-1608
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• 2014

This study is to suggest specialty contractors with countermeasures to construction orders falling off, one of the construction business indicators for the construction industry, by analyzing the impact of dwindling construction orders to business performance indicators of specialty contractors as well as identifying inter-relationships between those performance indicators. For specialty contractors of civil construction, it is analyzed that their current ratio is significantly affecting obtention of construction orders, which in turn greatly affecting the ratio of owner's equity. It seems that the amount of construction orders has a direct relationship with the corporate stability. Therefore, this type of specialty contractors are determined to be able to obtain more orders for construction by improving current ratio.

• Journal of Digital Convergence
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• v.14 no.8
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• pp.105-113
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• 2016

This study analyzed and verified panel data based on CSMAR (China Stock Market & Accounting Research) DB from 2002 to 2014 in order to find out significant differences of conservative accounting before and after Chinese companies adopted international accounting standards. Financial changes in companies can occur at the point of change in accounting standards, and as the difference would affect conservative accounting, it is important to understand conservatism in financial transaction. In this study, earnings per share and price, return on equity, and debt ratio were measured. As a result of analysis, conservative accounting has increased after the introduction of accounting standards, and as the debt ratio was higher, the proportion of conservative accounting was higher. Thus, at a certain point of change in accounting standards, companies apply conservative accounting in order to improve reliability in an unstable future financial environment. Therefore, this study is expected not only to practically influence business practice in changes in GAAP rules but also to provide useful guidance for future studies.

• East Asian Economic Review
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• v.23 no.4
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• pp.353-379
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• 2019

This paper aims to determine factors causing the stagnation of Korean firms' fixed investment after the global financial crisis, using panel data for the period of 1999-2016. Fixed investment remained sensitive to cash flow and Tobin's q although their effects decreased after the global financial crisis. A decreasing trend of cash flow and an increase in Tobin's q since the early 2000's imply that the worsening cash flow was a major factor behind the sluggish investment after the crisis. Meanwhile, debt-equity ratio remained significant for non-chaebol affiliated firms, reflecting disparity in access to external financing. Volatility of stock returns also became insignificant after the crisis, casting doubt on the argument that uncertainty was a major factor contributing to the decline of fixed investment. Analysis of financial investment confirmed the significant effect of cash flow, larger than that on financial investment than on fixed investment. In particular, debt repayment and other financial investment, except share repurchase, were sensitive to cash flow. However, the substitution of fixed investment by financial investment is a consequence, rather than a cause of declining fixed investment.

• Korean Management Science Review
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• v.32 no.1
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• pp.15-33
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• 2015

Under complete information, introducing additional constraints to a portfolio will have a negative impact on performance. However, real-life investments inevitably involve use of error-prone estimations, such as expected stock returns. In addition to the reality of incomplete data, investments of most Korean domestic equity funds are regulated externally by the government, as well as internally, resulting in limited maximum investment allocation to single stocks and risk free assets. This paper presents an investment framework, which takes such real-life situations into account, based on a newly developed portfolio selection model considering realistic constraints under incomplete information. Additionally, we examined the effects of additional constraints on portfolio's performance under incomplete information, taking the well-known Samsung and SK group stocks as performance benchmarks during the period beginning from the launch of each commercial fund, 2005 and 2007 respectively, up to 2013. The empirical study shows that an investment model, built under incomplete information with additional constraints, outperformed a model built without any constraints, and benchmarks, in terms of rate of return, standard deviation of returns, and Sharpe ratio.