Analysis of Sustainable Growth Rates of Companies Included in the Mixed Holding Power Utility of Republic of Srpska

Abstract

This paper analyzes selected data on the performance of companies that are part of the power utility Elektroprivreda Republike Srpske with the aim of determining their sustainable growth rates. The energy sector was chosen because of its importance both for the Republic of Srpska capital market (measured by the participation in the total market capitalization of the Banja Luka Stock Exchange and the basic Stock Exchange index) and the entire Republic of Srpska economy (measured by the participation in gross domestic product). The analysis considered data from published financial statements for 2019, with an emphasis on the following: operating assets, liabilities, capital, operating income and net profit. The dividend policy was also considered, but it was concluded in the paper that none of the observed companies paid dividends from profit for 2019 by the end of this analysis. The research results show that the rate of sustainable growth exceeds 1% in only one case, while in several other cases there are negative rates of sustainable growth caused by the loss in the observed period. Such facts could raise concerns, but also indicate possible directions for future actions in order to improve the performance of the considered companies.

Is Fintech a Sustainable Business Model for the Future? Empirical Study in Indonesia

“…Consequently, H2a is accepted and H2b is rejected as market capitalization significantly and positively affects the sustainable growth rate of the fintech banks and does not significantly influence the sustainable growth rate in conventional banks. Larger market capitalization may provide companies with increased access to capital, enabling them to pursue growth opportunities (Lee, 2020;Suresh & Thirumagal, 2020;Radivojac & Krčmar 2020;Roosmawarni et al, 2023). This aligns with the perspective from signaling theory and existing literature, where a higher market capitalization may signal greater investor confidence and attractiveness, potentially leading to favorable conditions for sustainable growth (Bhuyan et al, 2017;Chandra & Suhendah, 2023).…”

“…Companies perceived by the market as large and stable may find it easier to garner support from investors and other stakeholders, including those committed to sustainability issues (Lee, 2020;Suresh & Thirumagal, 2020;Roosmawarni et al, 2023). Furthermore, the research by Radivojac and Krčmar (2020) suggests that the advantage of high market capitalization extends to conventional banks as well. With greater financial resources, including capital and liquidity, conventional banks can invest more substantially in sustainable projects, thereby contributing to a higher sustainable growth rate.…”