• Title/Summary/Keyword: debt service ratio

Search Result 29, Processing Time 0.023 seconds

A CASE STUDY ON INVESTMENT EVALUATION OF A PRIVATE SECTOR PROJECT WITH GEOTECHNICAL RISKS

  • Yoshiki Onoi;Hiroyasu Ohtsu
    • International conference on construction engineering and project management
    • /
    • 2005.10a
    • /
    • pp.824-829
    • /
    • 2005
  • This paper focuses on construction cost volatility for the purpose of private sector investment by use of a financial model with key indices of IRR and DSCR (Debt Service Coverage Ratio). A case project, 1,000 MW pumped storage hydropower plant, has shown that its financial impacts by cost volatility of underground works are less measured than interest rates impacts by interest rate of loans. Probabilistic analysis of costs under geotechnical conditions has been made by Indicator Kriging method. And, in the modeling of interest rates, geometric Brownian motion has been applied. Both of these impacts are measured on the same financial model.

  • PDF

Chinese Corporate Leverage Determinants

  • Ferrarini, Benno;Hinojales, Marthe;Scaramozzino, Pasquale
    • The Journal of Asian Finance, Economics and Business
    • /
    • v.4 no.1
    • /
    • pp.5-18
    • /
    • 2017
  • Total debt in the People's Republic of China surged to nearly 290% as a ratio to GDP by the second quarter of 2016, mostly on account of non-financial corporate debt. The outpouring of credit to stem the impact of the global financial crisis accentuated industrial overcapacity in traditional sectors, such as steel, cement, and energy, while feeding asset bubbles in the property, equity and bond markets. At the Chinese corporate level, this has translated into weakened fundamentals and a fall in industrial profits, particularly of SOEs. As debtors struggle to service interest payments, non-performing loans (NPLs) have been on the rise. This paper assesses the financial fragility of the Chinese economy by looking at risk factors in the non-financial sector. We apply quantile regressions to a dataset containing all Chinese listed companies in Standard & Poor's IQ Capital database. We find higher sensitivity over time of corporate leverage to some of its key determinants, particularly for firms at the upper margin of the distribution. In particular, profitability increasingly acts as a curb on corporate leverage. At a time of falling profitability across the Chinese non-financial corporate sector, this eases the brake on leverage and may contribute to its continuing increase.

Factors Affecting the Performance of Local Public Hospitals (지방의료원의 경영성과에 미치는 영향)

  • Yang, Jong-Hyun;Lee, Jung-Woo
    • The Korean Journal of Health Service Management
    • /
    • v.11 no.3
    • /
    • pp.1-11
    • /
    • 2017
  • Objectives : The purpose of this study was to analyze factors affecting the performance of public hospitals in South Korea. Methods : We collected management performance data from 2013 to 2015 from income statements, balance sheets, and annual reports from 32 local public hospitals. The dependent variable used was profitability, which included operating margin, return on assets and net profit to gross revenues. The independent variables were general characteristics, liquidity, stability, and activity. Results : Patient revenues, total assets, and total capital had increased steadily but patient expenses had increased to a greater extent. Operating profit, and net profit were consistently in deficits and the management status of local public hospitals had recently been in difficulty. The debt ratio, quick ratio, ratio of fixed liability and fixed assets turnover rate have a significant positive(+) effect on performance in the years 2013-2015. Conclusions : We suggest management strategies for these hospitals based on the results analyzed.

Risk Analysis of Household Debt in Korea: Using Micro CB Data (개인CB 자료를 이용한 우리나라 가계의 부채상환위험 분석)

  • Hahm, Joon-Ho;Kim, Jung In;Lee, Young Sook
    • KDI Journal of Economic Policy
    • /
    • v.32 no.4
    • /
    • pp.1-34
    • /
    • 2010
  • We conduct a comprehensive risk analysis of household debt in Korea for the first time using the whole sample credit bureau (CB) data of 2.2 million individual debtors. After analysing debt service capacity profiles of debtor groups classified by the borrower characteristics such as income, age, occupation, credit scoring, and the type of creditor business companies, we investigate the impact of interest rate and income changes on debt service-to-income ratios (DTIs) and default rates of respective debtor groups. Empirical results indicate that debt service burdens are relatively high for low income wage earners, high income self-employed, low income capital and card loan holders, and high income mutual savings loan holders. We also find that debtors from multiple financial companies are particularly weak in their debt service capacity. The scenario analysis indicates that financial companies, with the current level of capital buffers, may be able to absorb negative consequences arising from the increase in DTIs and loan default rates if the interest rate and income changes remain modest. However, the negative consequences may fall disproportionately on non-bank financial companies such as capital, credit card, and mutual savings banks, whose debtors' DTIs are already high. We also find that the refinancing risk of household debt is relatively high in Korea as more than half of household mortgage debts are bullet loans. As the DTIs of mortgage loan holders are already high, under the current DTI regulation, mortgage loans may not be readily refinanced especially when the interest rate rises. Disruptions in mortgage loan refinancing may put downward pressure on housing prices, which may in turn magnify refinancing risk under the current loan-to-value (LTV) regulation. Overall our analysis suggests that, for more effective monitoring of household debt risk, it is necessary to combine existing surveillance schemes based on macro aggregate indicators with more comprehensive and detailed risk analyses based on micro individual data.

  • PDF

A Study on the Determinants of Capital Structure of Agricultural Corporations (농업법인의 자본구조 결정요인 연구)

  • Byun, Ji-Yeon;Im, In-Seob
    • The Journal of the Korea Contents Association
    • /
    • v.21 no.10
    • /
    • pp.368-377
    • /
    • 2021
  • This study analyzed the determinants of capital structure based on the financial statements of agricultural corporations disclosed on the DART(data analysis, retrieval and transfer system) of the Financial Supervisory Service since 2011, when the Korea international financial reporting standards (K-IFRS) was introduced. There have been many empirical studies on the capital structure so far, but there are no studies targeting agricultural corporations. The sample period of agricultural corporations was from 2015 to 2019, with the debt ratio as the dependent variable, and among the variables suggested as meaningful in existing empirical studies, ROA(profitability), SIZE(corporate size), LIQ(liquidity), TA(tangible asset ratio), FA(fixed long-term suitability ratio), and GROWTH(growth potential) were selected as independent variables and panel data analysis was performed. As a result of the analysis, it was found that the debt ratio decreased as the ROA and SIZE of agricultural corporations increased. This can be interpreted as supporting the pecking order theory rather than the static trade-off theory in the relationship between the ROA and SIZE of Korean agricultural corporations with the capital structure. In addition, it was found that the debt ratio increased as the FA increased. These results suggest that Korean agricultural corporations need to establish a financing policy in consideration of ROA, SIZE, and FA.

Analysis for Financial Ratio of Korean Professional Soccer Citizen Teams (프로축구 시민구단의 재무비율 분석)

  • Kang, Ho-Jung;Song, Kang-Young
    • The Journal of the Korea Contents Association
    • /
    • v.8 no.7
    • /
    • pp.224-232
    • /
    • 2008
  • Sport industry creates value-added by production and distribution of product or service related with sports or sports. Professional sports will lead to major area of sport service industry in the future. The purpose of study is to analyze financial condition and management performance by using financial statement(2005-2007) of korean professional soccer citizen teams. The analysis of financial condition and management performance is executed by financial ratio analysis method. The content of this study involve comparison with standardization ratio and financial ratios among professional soccer citizen teams. The results of this study are as follows. First, liquidity ratio measured by current ratio and quick ratio was high with compared to standardization ratio. Second, leverage ratio measured by debt ratio was very high. Third, activity ratio was good condition. Finally, profitability ratio was very low having minus ratio generally.

A Comparative Analysis of Business Performance of University Hospitals for the Past 10 Years (최근 10년간 대학병원 경영성과 비교분석)

  • Yang, Jong-Hyun
    • The Korean Journal of Health Service Management
    • /
    • v.10 no.3
    • /
    • pp.13-25
    • /
    • 2016
  • Objectives : The purposes of this study was to analyze business performance of university hospitals for the past 10 years. Methods : Management and finance data from 2005 to 2014 were collected from balance sheets, income statements and annual reports from 27 university hospitals. The dependant variable used was profitability which included return on assets, operating margin and net profit to gross revenues 1. The independent variables were general characteristics, liquidity, stability, activity and financial ratios. Results : University hospitals over the last 10 years had achieved good management performance. Using financial leverage, patient revenues, operating profit, nonpatient revenues, total assets and total debt, the total amount had increased by more than double. The ratio of fixed liability and fixed assets turnover was found to have a significant positive (+) effect on management performance in the years 2012-2014. Conclusions : Based on these results, this study suggests a more in-depth analysis using fixed liabilities and fixed assets.

Comparative Analysis of Financial Performance in University Hospital (대학병원의 재무성과 비교 분석)

  • Yang, Jong-Hyun
    • The Korean Journal of Health Service Management
    • /
    • v.14 no.2
    • /
    • pp.15-27
    • /
    • 2020
  • Objectives: The purpose of this study is to compare analysis of financial performance in university hospitals. Methods: Data from 2005 to 2017 were collected from income statement, balance sheet, and annual reports in 23 university hospitals. The dependent variables are used financial performance, namely, medical profit to total assets, medical profit to medical revenue, and net profit to medical revenue. The independent variables are establishment type, hospital province, bed, open liquidity, stability, and activity. Results: From 2005 to 2007, university hospitals steadily increased medical revenues, nonmedical revenues, medical profit, net profit, and reserve fund for essential business by investing fixed assets using financial leverage. From 2015 to 2017, the debt ratio was minimized based on existing management performance. Results showed that university hospitals maintained high profitability by actively investing in medical equipment, medical environment, and facilities using reserve fund for essential business. Conclusions: Results suggest that this will be the basic data for efficient management of university hospitals.

The Effects of Corporate Insolvency Cause on Turnaround Strategies and Turnaround Performance (기업부실 원인이 회생전략과 회생성과에 미치는 영향)

  • Song, Sin-Geun;Shin, Sung-Wook;Park, Chang-June
    • Management & Information Systems Review
    • /
    • v.34 no.1
    • /
    • pp.211-225
    • /
    • 2015
  • This paper investigate the impact of insolvency cause(internal insolvency cause, external insolvency cause) on firms' turnaround strategies(strategy of improving efficiency, strategy of creating revenue) and examines the impact of firms' turnaround strategies on firms' turnaround performance(debt ratio, sales growth ratio). For this study, a survey was conducted among administrative assistants and four hypotheses were verified. The findings of this research are summarized as follows: First, internal insolvency cause had a positive effect on strategy of Improving efficiency(expense reduction, asset reduction), but external insolvency cause had a positive effect on strategy of creating revenue(product/service reduction, product/service expansion). Second, strategy of improving efficiency positively effect on decreasing debt ratio, but strategy of creating revenue positively effect on the sales growth ratio. These results show that turnaround strategies different across the corporate insolvent cause, and turnaround performance also different across the corporate turnaround strategy.

  • PDF

Influences of Energy Production Estimation Errors on Project Feasibility Indicators of a Wind Project and Critical Factor Analysis by AHP (풍력발전사업 에너지생산량 산정 오차가 사업성지표에 미치는 영향 및 AHP를 이용한 중요인자 분석)

  • Kim, Youngkyung;Chang, Byungman
    • Korean Management Science Review
    • /
    • v.30 no.2
    • /
    • pp.1-10
    • /
    • 2013
  • Case studies are made to investigate the relationship between the accuracy of energy production estimation and project feasibility indicators such as rate of return on equity (ROE) and debt service coverage ratio (DSCR) for three wind farm projects. It is found out that 1% improvement in the accuracy of energy production estimation may enhance the ROE by more than 0.5% in the case of P95, thanks to improved financing terms. AHP survey shows that MCP correlation of measured in situ wind data with long term wind speed distribution and hands-on experiences of flow analysis are more important than other factors for more precise annual energy production estimation.