The Performance Determinants of Trading Companies: A Stakeholder Perspective

Abstract

This research aims to propose a model adding to the competitiveness of companies by identifying factors that determine the profitability of the selected companies (both publicly traded and unquoted private companies of all sizes). Another aim is to prove a dichotomy between the motivation of equity holders and senior lenders as far as acceptable financial leverage is concerned. The paper is innovative based on its combination of several different factors influencing corporate profitability (i.e. firm-specific effects: current ratio, labor cost ratio, working capital financing ratio, long-term financing ratio, return on sales, age of the firm; industry-specific effects and other macroeconomic effects) and by assessing determinants concerning the interests of shareholders and other stakeholders using a panel regression analysis with fixed effects. The authors prove that the determinants of the operating performance of Czech trading companies differ substantially when the performance is measured by ROA or by ROE. This clearly shows discrepancies between the equity holder interest to maximize their returns on investment and the other stakeholder interests. Specifically, the authors have found that the leverage, both in terms of working capital and long-term financing, negatively impacts returns on assets. On the other hand, it positively impacts returns for equity holders both in the Wholesale and Retail sub-samples. Interestingly, other determinants of operating performance, such as capital intensity, labor cost ratio, historical profitability, and macroeconomic variables, are of comparable significance, impacting both the ROA and ROE analyses.

Financial performance and bankruptcy concerns of SMEs in their export decision

“…The reason for SMEs in this research having less healthy financial conditions less intensively perceive cultural-linguistic barriers might be related with their export orientation. The year of business activity (Tousek et al, 2021) is also an important fact, because time increases the awareness (Ključnikov et al, 2020a) of SMEs regarding the differences in various markets. As it is presented in Table 2, 74.76% of SMEs in the research sample have more than 10 years of business activity.…”

Pengaruh Liquidity dan Leverage Terhadap Firm Performance Dengan Firm Size Sebagai Variabel Moderasi

“…Ketika perusahaan berada dalam posisi yang tidak menguntungkan, perusahaan dapat mengambil langkah untuk memutar keadaaan yang ada. Pengukuran ini tidak hanya didasarkan pada satu individu, tetapi terhadap semua pihak internal dan eksternal (Tousek et al, 2021).…”

“…Namun, ada beberapa penelitian yang menyatakan hal sebaliknya yaitu leverage tidak berpengaruh terhadap firm performance. Penelitian tersebut ialah penelitian (Shibutse et al, 2019), (Abu-Abbas et al, 2019), (Hussain et al, 2020, (Tousek et al, 2021), dan (Perera, 2022). H2: Leverage Memberi Pengaruh Signifikan Positif pada Firm Performance.…”

The Effect of Intellectual Capital Disclosure on Financial Performance in Indonesian Banking Companies

“…Various studies have been conducted to explore the impact of intellectual capital disclosure on financial performance, such as Rizkya & Sadikin, (2022); Sutanto & Siswantaya, (2016); Tousek et al, (2021). But there is also research Nicolo' et al, (2020); Raimo et al, (2020) which show that exposure to intellectual capital has no effect financial performance (ROE).…”