Factors Affecting the Financial Performance of Jordanian Insurance Companies Listed at Amman Stock Exchange
09 Apr 2012-Journal of Management and Research (Macrothink Institute, Inc.)-Vol. 4, Iss: 2, pp 266-289
TL;DR: In this paper, a study aimed at investigating the factors that mostly affect financial performance of Jordanian Insurance Companies is presented, which showed that the following variables (Leverage, liquidity, size, management competence index) have a positive statistical effect on the financial performance.
Abstract: This study aimed at investigating the factors that mostly affect financial performance of Jordanian Insurance Companies. The study population consisted of all insurance companies' enlisted at Amman stock Exchange during the period (2002-2007) which count (25) insurance company. The data collected was analysed by using a number of basic statistical techniques such as T-test and Multiple- regression. The results showed that the following variables (Leverage, liquidity, Size, Management competence index) have a positive statistical effect on the financial performance of Jordanian Insurance Companies. The researcher recommended that a high consideration of increasing the company assets will lead to a good financial performance and there is a significant need to have highly qualified employees in the top managerial staff.
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TL;DR: In this article, the authors investigated the relationship between capital structure on the performance of non-financial companies listed in the Nairobi Securities Exchange (NSE), Kenya and found that financial leverage had a statistically significant negative association with performance as measured by return on assets and return on equity.
Abstract: Corporate failure among companies in Kenya has often been associated with the financing behaviour of the firms. Momentous efforts to revive the ailing and liquidating companies have focused on financial restructuring. A great dilemma for management and investors alike is whether there exists an optimal capital structure and how various capital structure decisions, both short-term and long-term, influence business performance. This study therefore investigated the relationship between capital structure on the performance of non-financial companies listed in the Nairobi Securities Exchange (NSE), Kenya. The study employed an explanatory non- experimental research design. A census of 42 non-financial companies listed in the Nairobi Securities Exchange, Kenya was taken. The study used secondary panel data contained in the annual reports and financial statements of listed non-financial companies. The data were extracted from the Nairobi Securities Exchange hand books for the period 2006-2012.The study applied panel data models (random effects). Feasible Generalised Least Square (FGLS) regression results revealed that financial leverage had a statistically significant negative association with performance as measured by return on assets (ROA) and return on equity (ROE). The study recommended that managers of listed non-financial companies should reduce the reliance on long term debt as a source of finance.
134 citations
Journal Article•
TL;DR: In this paper, the authors used Pearson correlation to ascertain the interrelationship between the variables, whereas multiple-regression was used to assess the extent of the effect of the independent variables on the dependent variable.
Abstract: With the increasing trend of sudden corporate failure in both global and local context, shareholders and other stakeholders are increasingly becoming more concerned of the financial performance of their firms. The study therefore aimed to find out the factors affecting the financial performance of listed companies at Nairobi Securities Exchange in Kenya. It was informed by trade off and the agency theories. The study adopted an explanatory research design and 29 listed firms (excluding listed banks and insurance companies) which have consistently been operating at the Nairobi securities exchange during the period 2006-2012 were sampled. Purposive sampling technique was used. The analysis of the data collected from financial statement followed a number of basic statistical techniques. Descriptive statistics (mean and standard deviation) and inferential statistics (Pearson correlation and multiple-regression) were used to analyze data. Pearson correlation was used to ascertain the interrelationship between the variables, whereas multiple-regression was used to assess the extent of the effect of the independent variables on the dependent variable. Study findings showed that leverage had a significant negative effect on financial performance (? 1 = -0.289, ?<0.05). Findings also showed that liquidity had a significant positive effect on financial performance (? 2 = 0.296, ?<0.05). Company size had a significant positive effect on financial performance (? 3 = 0.480, ?<0.05). The study also revealed that company age had a significant positive effect on financial performance (? 4 = 0.168, ?<0.05). The study provides some precursory evidence that leverage, liquidity, company size and company age play an important role in improving company’s financial performance. The study suggests that there is need to determine an optimal debt level that balances the benefits of debt against the costs of debt and developing sound techniques of managing current assets to ensure that neither insufficient nor unnecessary funds are invested in current assets as maintaining a balance between short-term assets and short-term liabilities is critical. The study also suggest that firms should expand in a controlled way with the aim of achieving an optimum size so as to enjoy economies of scale which can ultimately result in higher level of financial performance. Keywords: Financial Performance, Liquidity, Leverage, Company Size and Age
132 citations
Cites background from "Factors Affecting the Financial Per..."
...Thus the study hypothesizes that; H02: Liquidity has no significant effect on the Financial Performance (Return on assets) of Companies listed at Nairobi Securities Exchange....
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...Thus the study hypothesized that; H04: Company age has no significant effect on the Financial Performance (Return on assets) of Companies listed at Nairobi Securities Exchange....
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...Research hypothesis 2 stated that, Liquidity has no significant effect on the Financial Performance (Return on Assets) of Companies listed at Nairobi Securities Exchange (HO2)....
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...The estimated equation for multiple linear regression-models is: ROA = −0.295 − 0.289 + 0.296 + 0.482 + 0.168 + 0.06723 According to hypothesis 1, Leverage has no significant effect on the Financial Performance (Return on assets) of Companies listed at Nairobi Securities Exchange (HO1)....
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...Thus the study hypothesizes that; H01: Leverage has no significant effect on the Financial Performance (Return on assets) of Companies listed at Nairobi Securities Exchange....
[...]
24 Feb 2014-International Journal of Academic Research in Accounting, Finance and Management Sciences
TL;DR: In this paper, the authors analyze the determinants of the financial performance in the Romanian insurance market during the period 2008-2012, by applying specific panel data techniques, according to the final results achieved by applying certain panel-based techniques, the determinant of financial performance are the financial leverage in insurance, company size, growth of gross written premiums, underwriting risk, risk retention ratio and solvency margin.
Abstract: The financial analysis of a company is an important tool used by actuaries in the process of decision- making on underwriting and investment activities of the insurance company. The financial performance of insurance companies is also relevant within the macroeconomic context since the insurance industry is one of the financial system’ components, fostering economic growth and stability. The financial performance of insurance companies can be analyzed at micro and macroeconomic level, being determined both by internal factors represented by specific characteristics of the company, and external factors regarding connected institutions and macroeconomic environment. This study attempts to analyze the determinants of the financial performance in the Romanian insurance market during the period 2008–2012. According to the final results achieved by applying specific panel data techniques, the determinants of the financial performance in the Romanian insurance market are the financial leverage in insurance, company size, growth of gross written premiums, underwriting risk, risk retention ratio and solvency margin.
107 citations
Cites methods from "Factors Affecting the Financial Per..."
...In order to identify the factors that affect the financial performance of the Jordanian insurance market, Almajali et al. (2012) analyze the insurance companies listed on the Amman Stock Exchange during 2002-2007, by applying tests and multiple regressions....
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TL;DR: Zhang et al. as discussed by the authors explored the effects of organizational stakeholder pressure and regulatory stake-holder pressure on green logistics practices and financial performance, and investigated if environmental reputation and social reputation are missing links in mediating the relationships between organizational and regulatory stakeholders.
84 citations
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TL;DR: In this paper, a six-step framework for organizing and discussing multivariate data analysis techniques with flowcharts for each is presented, focusing on the use of each technique, rather than its mathematical derivation.
Abstract: Offers an applications-oriented approach to multivariate data analysis, focusing on the use of each technique, rather than its mathematical derivation. The text introduces a six-step framework for organizing and discussing techniques with flowcharts for each.
Well-suited for the non-statistician, this applications-oriented introduction to multivariate analysis focuses on the fundamental concepts that affect the use of specific techniques rather than the mathematical derivation of the technique. Provides an overview of several techniques and approaches that are available to analysts today - e.g., data warehousing and data mining, neural networks and resampling/bootstrapping. Chapters are organized to provide a practical, logical progression of the phases of analysis and to group similar types of techniques applicable to most situations.
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IV. ADVANCED AND EMERGING TECHNIQUES.
11. Structural Equation Modeling.
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Appendix A: Applications of Multivariate Data Analysis.
Index.
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TL;DR: This book deals with probability distributions, discrete and continuous densities, distribution functions, bivariate distributions, means, variances, covariance, correlation, and some random process material.
Abstract: Chapter 3 deals with probability distributions, discrete and continuous densities, distribution functions, bivariate distributions, means, variances, covariance, correlation, and some random process material. Chapter 4 is a detailed study of the concept of utility including the psychological aspects, risk, attributes, rules for utilities, multidimensional utility, and normal form of analysis. Chapter 5 treats games and optimization, linear optimization, and mixed strategies. Entropy is the topic of Chapter 6 with sections devoted to entropy, disorder, information, Shannon’s theorem, demon’s roulette, Maxwell– Boltzmann distribution, Schrodinger’s nutshell, maximum entropy probability distributions, blackbodies, and Bose–Einstein distribution. Chapter 7 is standard statistical fare including transformations of random variables, characteristic functions, generating functions, and the classic limit theorems such as the central limit theorem and the laws of large numbers. Chapter 8 is about exchangeability and inference with sections on Bayesian techniques and classical inference. Partial exchangeability is also treated. Chapter 9 considers such things as order statistics, extreme value, intensity, hazard functions, and Poisson processes. Chapter 10 covers basic elements of risk and reliability, while Chapter 11 is devoted to curve fitting, regression, and Monte Carlo simulation. There is an ample number of exercises at the ends of the chapters with answers or comments on many of them in an appendix in the back of the book. Other appendices are on the common discrete and continuous distributions and mathematical aspects of integration.
19,893 citations
"Factors Affecting the Financial Per..." refers background or methods in this paper
...- Hypotheses Testing and Results To test multiple regression models, it is necessary to assess whether the collected data violate some key assumptions of regression models because any assumption violations can result in distorted and biased research results (Hair et al. 1998)....
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...High degrees of multicollinearity can result in both regression coefficients being inaccurately estimated, and difficulties in separating the influence of the individual variables on the dependent variables (Hair et al. 1998)....
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...In a strict definition of a normal distribution, the skewness of the data would equal zero (Hair et al. 1998)....
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...To test multiple regression models, it is necessary to assess whether the collected data violate some key assumptions of regression models because any assumption violations can result in distorted and biased research results (Hair et al. 1998)....
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...90 with other variables, indicative of the multicollinearity problem (Hair et al. 1998)....
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Book•
20 Jan 1984
TL;DR: Examples are drawn from different areas of business - such as human resources management, strategic management, operations management, finance, accounting, and information management - to provide students with a comprehensive overview of the applications of research methods.
Abstract: Chapter 1. Introduction to Research. Chapter 2. Scientific Investigation. Chapter 3. Technology and Business Research. Chapter 4. The Research Process: Steps 1 to 3: The Broad Problem Area, Preliminary Data Gathering, Problem Definition. Chapter 5. The Research Process: Steps 4 and 5: Theoretical Framework Hypothesis Development. Chapter 6. The Research Process: Step 6: Elements of Research Design. Chapter 7. Experimental Designs. Chapter 8. Measurement of Variables: Operational Definition and Scales. Chapter 9. Measurement: Scaling, Reliability, Validity. Chapter 10. Data Collection Methods. Chapter 11. Sampling. Chapter 12. Data Analysis and Interpretation. Chapter 13. The Research Report. Chapter 14. Managerial Decision Making and Research. Module: A Refresher on Some Statistical Terms and Tests. A Final Note to the Student. Glossary of Terms. References. Statistical Tables. Index.
11,833 citations
"Factors Affecting the Financial Per..." refers background in this paper
...According to the decision rule: accept null hypothesis (H0) if the significance level () of the question is greater than 0.05 significance level, and reject (H0) if the significance () level equals or is less than 0.05 (Sekaran, 2003)....
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7,432 citations
"Factors Affecting the Financial Per..." refers background in this paper
...According to the decision rule: accept null hypothesis (H0) if the significance level () of the question is greater than 0.05 significance level, and reject (H0) if the significance () level equals or is less than 0.05 (Sekaran, 2003)....
[...]
TL;DR: Scholes et al. as discussed by the authors examined the relationship between the total market value of the common stock of a firm and its return and found that small firms had higher risk adjusted returns than large firms.
5,997 citations