Debt and deleveraging during a financial crisis : a South African perspective
- Authors: More, Tebogo Paulina
- Date: 2013-07-25
- Subjects: Corporate debt , Financial leverage , Financial crises
- Type: Thesis
- Identifier: uj:7699 , http://hdl.handle.net/10210/8565
- Description: M.Comm. (Financial Management) , The purpose of this study is to show the influence of corporate debt on financial distress particularly during and after an economic/financial crisis on South African companies. It is assumed that companies that are highly leveraged prior to a crisis will experience financial distress during as well as after the crisis and that they will go through a process of deleveraging sometime after the financial crisis. The financial statements of 47 capital intensive companies that are traded on the main board of the JSE Limited are analysed for two crises that took place between 1994 and 2010. These crisis points coincide with the Asian crisis and the Dot.com bubble crash. The 2008 sub-prime crisis is excluded from the analyses due to the absence of post-crisis financial information for some of the companies sampled. The analysis examines the relationship between debt and financial distress and between debt and profitability before, during and after the crises. The evolution of debt levels before, during and after the crises is also examined. The empirical findings of the study are a departure from international literature and experience that suggest that during times of economic prosperity companies become over-indebted due to expansion plans and therefore in most cases experience financial distress as they are unable to meet their obligations or meet these with great difficulty during and after the crisis.
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The relationship between firm size and performance
- Authors: Mazhinduka, Tinodiwanashe Adrian
- Date: 2015
- Subjects: Business enterprises - Size , Performance - Management , Risk , Financial leverage , Corporate governance
- Language: English
- Type: Masters (Thesis)
- Identifier: http://hdl.handle.net/10210/54656 , uj:16244
- Description: Abstract: The impact of firm size on performance of a firm has been widely debated. There is the view that large firms are able to outperform smaller competitors because of economies of scale. Harsh economic conditions have, however, led to a number of large firms collapsing. Advocates of small firms have noted that the knowledge of niche markets and unique offerings have allowed small firms to remain competitive. This study investigates whether there exists a relationship between firm size and return on assets. To supplement the size variable, the study also considered control variables associated with firm size to determine how they influence the relationship between firm size and return on assets. The study considered a sample of firms in the Industrial Goods and Services sector listed on the JSE to examine the nature of the relationship between firm size and performance, during the period 2004 to 2013. Market capitalisation was used as measure for firm size and return on assets as a measure of firm performance. The study data was analysed by means of a comparative analysis applying descriptive statistics, correlation analysis and a regression analysis. The findings from the correlation and regression analyses indicate that firm size has no influence on firm performance when the combined sample was investigated. However, the results indicate that for small listed firms, firm size has a moderate positive influence on firm performance. For large firms, firm size has no influence on firm performance. The results of the study will be useful for management to focus their efforts on significant variables that influence return on assets. , M.Com. (Financial Management)
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