Monitoring mechanisms and financial distress of public listed companies in Malaysia

Kazemian, Soheil; Shauri, Noor Azura Ahmad; Sanusi, Zuraidah Mohd; Kamaluddin, Amrizah; Shuhidan, Shamila Mohamed

doi:10.14254/2071-8330.2017/10-1/6

Cited by 55 publications

(81 citation statements)

References 42 publications

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“…Research findings by Chan and Chen (1991) showed that financial distress firm have leverage and cash flow problem and thus perform poorly leading to lose in their market value. Similarly, according to Kazemian et al (2017) financial distress, firms are firms that encounter numerous financial problems and have a weak financial performance. Furthermore, Wesa and Otinga (2018) noted that financial distress firms are usually faced with two possible major problems either they are experiencing cash shortage on the asset side or overdue obligation on the liabilities sides of the statement of financial position.…”

Section: Introductionmentioning

confidence: 99%

“…The findings from the study will provide firms and the regulators an outlook and idea on what actually determines financial distress of manufacturing firms as this will trigger initiatives and early warning signals that could help avert the probability of corporate financial distress in the sector. According to Kazemian et al (2017) financial distress affects an organization profitability and it operates via its cost implication such as legal cost and administrative cost which is often linked with bankruptcy cost (that is, direct financial cost) and increased cost for supplies and debt (indirect financial distress cost). The implication of these cost (direct and indirect financial distress cost) lowers the market value of firms (Rahman et al, 2016).…”

Section: Introductionmentioning

confidence: 99%

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Firm specific determinants of financial distress: Empirical evidence from Nigeria

Ikpesu¹

2019

J. Account. Taxation

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This paper in an attempt in answering the basic research question on what actually determines financial distress of firms in the manufacturing sector in the country employed the fully modified ordinary least square (FMOLS) on annual time series data of eighteen listed manufacturing firms on the Nigeria stock exchange (NSE) which was obtained from their audited financial statement. The endogenous variable used in the study is financial distress which is measured using the Altman Z score while the exogenous variables employed in the study are firm size, liquidity, profitability, and leverage. The study also employed a list of control variables such as revenue growth and share price. Findings from the study showed that leverage, liquidity, profitability, firm size, revenue growth, and share price are the firmspecific determinant of financial distress of firms in the manufacturing sector in the country. The findings of this study pose significant policy directions. First, managers and owners of the corporate organization need to pay critical attention to these variables when making financial decisions. Second, to ensure smooth operation and continued survival of firms, corporate managers need to design policies that will determine the appropriate level of liquidity, leverage, profitability and revenue growth. Also, management needs to set up control measures that will detect early warning signal of financial distress.

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Section: Introductionmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

Firm specific determinants of financial distress: Empirical evidence from Nigeria

Ikpesu¹

2019

J. Account. Taxation

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“…Crisis management creates more favorable conditions for the company to create a competitive advantage, which allows it to produce products consumed by the market and receive enough money for the further development of the organization (Ganebnykh, 2017). Firms with lower profitability would have a higher possibility of financial distress (Kazemian, 2017).…”

Section: Literature Reviewmentioning

confidence: 99%

Competitiveness and economic profit analysis of Kazakhstan’s poultry companies

Hájek¹,

Zhunissova²,

Oralbaeva³

et al. 2019

Journal of International Studies

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Measuring competitiveness in Сentral Asian post-socialist countries is problematic as many well-known metrics systems fail to warn about bankruptcy risks sufficiently early or at all. With 2013-2017 data, we have compared data on the selected poultry sector companies operating in Kazakhstan to analyze their competitiveness, while financial analysis metrics provided us with the financial performance data. In particular, we have analyzed two publicly traded companies-Alatau-Kus JSC and Ust-Kamenogorskaya pticefabrika JSC, and two non-publicly traded companies-Alel-Agro JSC, and Sever Ptica JSC. These are compared with the largest Czech poultry meat producer Vodnanska drubez, JSC. Firstly, we measured competitiveness through bankruptcy and creditworthiness models and compared competitiveness as compared to financial situation of the main competitors at that market. To measure competitiveness, we used such indicators as IN99, IN01, IN05. We show the IN models can be beneficial in the case of the post-socialist countries. By using

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“…The harmonization of Shariah principles and current business affairs has become a norm in business transactions, as well as provides an overview and appreciation of full compliance with Islamic law (Falaika, 2002 Kazemian, et al, (2017), and Ujah and Brusa (2011). However, the degree and extent of earnings management varies and often depends on the type of economic group or industry (Ujah and Brusa, 2011).…”

Section: Managerial Opportunism and Earnings Managementmentioning

confidence: 99%

Managerial Opportunism: Monitoring Financial Risk of Malaysian Shariah-compliant Companies

Waznah¹,

Taufik²,

Sanusi³

et al. 2018

GJAT

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Managerial opportunism, such as earnings management, is a rampant, but often discreet, among certain managers. Agency theory and the notion of conflict of interest are used as bases to assume that managers would resolve to engage with inappropriate activities for their personal benefits. Distortion of earnings would erode investor confidence and is detrimental to the capital market. The Islamic capital market with Shariah-compliant firms is expected not to engage in activities that go against the religion code of conduct. The main purpose of this study is to investigate managerial opportunism among Shariah-compliant companies, specifically the relationship between real earnings management and the risk of financial distress, leverage, and free cash flow. This study employs 4,115 data from 694 sample companies for five years (2009)(2010)(2011)(2012)(2013). Findings conclude that the risk of financial distress, leverage, and free cash flow have a significant relationship with earnings management among Shariah-compliant companies. This study provides evidence that further improvements on corporate governance are necessary to ensure that Shariah-compliant companies adhere with the Shariah requirement.

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Monitoring mechanisms and financial distress of public listed companies in Malaysia

Cited by 55 publications

References 42 publications

Firm specific determinants of financial distress: Empirical evidence from Nigeria

Firm specific determinants of financial distress: Empirical evidence from Nigeria

Competitiveness and economic profit analysis of Kazakhstan’s poultry companies

Managerial Opportunism: Monitoring Financial Risk of Malaysian Shariah-compliant Companies

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