Pre-and Post-COVID-19 condition, performance and future of the airline industry: Evidence from accounting data

The main purpose of this study was to analyze the pre-and post-COVID-19 condition, performance and future of the airline industry. To get the desired objective of the study current research study used the accounting information of airline industry. For the said purpose cross tabulation, frequencies, means techniques were used to draw the conclusion. To predict the future and revival of the industry study calculated the means before and after COVID-19 performance and forecast the recovery period of the industry. The accounting results showed that the condition and performance of the airline industry was good before the COVID-19 pandemic. The average results showed that operating profit margin, net profit, return on invested capital and, revenues were at acceptable levels before COVID-19. However, in the aftermath of COVID-19, all the indicators dropped significantly and become negative. Before COVID-19, the airline industry was contributing an average $118 billion in annual tax revenue to governments. Before COVID-19, the region-wise accounting results showed that the condition and performance of the airline industry was good in all regions except in Africa. After COVID-19, the airline industry in all regions encountered significant problems with negative operating profit, net profit and, return on invested capital, and a significant drop in revenue. In short, such unexpected, painful and huge losses have never been recorded throughout the history of the airline industry. The future of the airline industry is unpredictable and uncertain, but the average results showed that said industry will recover within four to five years if COVID-19 disappears in 2020

The impact of debt and equity decisions on business performance: Evidence from International Airline Corporation

Capital structure decision remains always interesting puzzle for practitioner as well as for researchers. Capital structure of company fluctuates from company to company, country to country, nature of business to business and firm age to age. The current study examines the impact of capital structure (financial leverage and equity decision) on airline performance. The analysis is performed on secondary data. Data is taken from the financial statements of under consideration study of Pakistan International Airline. Sample period is taken from 2004 to 2020. The financial performance is measured by ROA and ROE, while independent variables are debt to asset (DTA), debt to equity (DTE), and size (natural log of total assets). Two econometric models are developed for the analysis. Regression and correlation are used to measure the impact of debt and equity on company performance. The study demonstrated that DTA has a statistically significant negative relationship with the dependent variable, ROA. Model 1 results indicated that only DTA was the good predictor of ROA and size had no significant relationship with ROA. Model 2 results demonstrated that the size had a significant but positive relationship with ROE. Meanwhile, DTA had an insignificant association with ROE

Impacto da estrutura de capital no desempenho dos negócios: um caso da Emirates Airline

This study investigated the impact of capital structure on business performance of emirates airline. To that end, a time series analysis conducted over the period 1990 to 2015. Econometric models were developed and tested. In this regard three econometric models were developed. The dependent variable were Return on Assets, Return on Equity and Net Profit Margin while the Independent variable were Debt to Assets and Debt to Equity. Time series data assumption stationary was checked through Augmented Dickey Fuller test. To examine the impact of capital structure on business performance multiple regression and correlation analysis were applied. Results showed that there is no significant impact of debt to asset (DTA) on business performance, while debt to equity (DTE) has significant impact on the business performance of Emirates Airline.Este estudio investigó el impacto de la estructura de capital en el desempeño comercial de la aerolínea Emirates. Con ese fin, se desarrollaron y probaron modelos econométricos durante un período de 1990 a 2015. En este sentido se desarrollaron tres modelos econométricos. La variable dependiente fue Retorno sobre activos, Retorno sobre patrimonio y Margen de utilidad neta, mientras que la variable independiente fue Deuda con activos y Deuda con patrimonio. La suposición de datos de series de tiempo estacionaria se verificó mediante la prueba de Dickey Fuller aumentada. Para examinar el impacto de la estructura de capital en el rendimiento del negocio, se aplicaron regresión múltiple y análisis de correlación. Los resultados mostraron que no hay un impacto significativo de deuda a activo (DTA) en el desempeño comercial, mientras que la deuda a capital (DTE) tiene un impacto significativo en el desempeño comercial de Emirates Airline.Este estudo investigou o impacto da estrutura de capital no desempenho empresarial dos emirados. Para tanto, foi realizada uma análise de séries temporais no período de 1990 a 2015. Modelos econométricos foram desenvolvidos e testados. A este respeito, foram desenvolvidos três modelos econométricos. As variáveis dependentes foram Retorno sobre Ativos, Retorno sobre o Patrimônio Líquido e Margem de Lucro Líquido, enquanto a variável Independente foi Dívida sobre Ativos e Dívida sobre o Patrimônio Líquido. A hipótese de dados de séries temporais estacionárias foi verificada através do teste Augmented Dickey Fuller. Para examinar o impacto da estrutura de capital no desempenho dos negócios, aplicaram-se regressão múltipla e análise de correlação. Os resultados mostraram que não há impacto significativo da dívida sobre ativos (DTA) sobre o desempenho dos negócios, enquanto a dívida sobre patrimônio líquido (DTE) tem impacto significativo no desempenho dos negócios da Emirates Airline

Examining the perceptions of executives regarding accounting information system (AIS). Evidence from listed companies in Saudi stock exchange (TADAWUL).

The present study was conducted to investigate the effect of accounting information system (AIS) on the firm performance of selected companies listed in Tadawul, the stock exchange of Kingdom of Saudi Arabia (KSA). Data was collected through a self-administered online questionnaire during 2022 from 180 executives working at different levels in selected companies. The sample size of the study included 51 listed companies from different sectors. Corporate governance, customer satisfaction, and profitability were the proxy variables used to determine firm performance. The relationship among the variables was subsequently tested by multiple regression. The outcomes exhibited the positive relationships among them

Factors affecting the dividend payout: Evidence from Saudi Arabia

Businesses need financing and investors need higher returns. Both are indispensable for each other. Keeping in view the above fact, the current study examined the dividend payout factors affecting the Saudi cement industry. Secondary data are used to investigate the mentioned purpose over the period from 2006 to 2020. It was noticed that cement industry has become crucial for all other industries in general and particularly to the construction industry of Saudi Arabia. The study has employed the regression examination to explore the association regarding endogenous and exogenous variables. The present study has used the dividend payout ratio as an endogenous variable, while exogenous variables are liquidity (CR), profitability (ROA), FS (Firm Size), and financial leverage. The study reported that ROA has statistical significant and positive association with depended variable i.e. (dividend disbursement ratio). ROA is an important predictor of dividend payout, while FS, LEV, and CR have reported insignificant association with the dividend payout ratio. Cement industry of Saudi Arabia and investors would benefit from the current findings

Annual Report Readability and the Audit Function

Drawing on agency theory and obfuscation hypothesis, the main focus of this thesis is on the readability of annual reports. It comprises three empirical chapters which examine the readability of annual report and the possible association with the audit function. The effect of auditing on the lexical content of annual report, is to be studied in three different, yet interrelated, auditing topics, namely, audit fees, audit firm tenure, and auditor switching. The results in the first empirical chapter which investigates the association between annual reports readability and audit fees suggests that audit fees is highly statistically associated with the readability of the annual report and this association holds after controlling for different firm specific and financial characteristics. This suggests that high levels of audit fees, measured as fees paid for statutory audit services, may partially explain the quality of the annual report. Contrary to expectations, there is little evidence that non-audit fees, measured as the fees paid for consultancy and other services, have an effect on the readability of the annual report. Nevertheless, this chapter documents a strong statistical association which indicates that total audit fees, measured as the sum of audit and non-audit fees, can capture the economic bond between auditing firms and client management and that higher levels of total audit fees have negative effects on readability. Moreover, I document strong joint relationship between the three measures of fees and firm performance affecting annual report readability and that these interactions show that audit, non-audit and total fees exhibit greater effects in poorly performing firms. The second empirical chapter which investigates the association between the readability of annual reports and audit firm tenure suggests that audit firm tenure has a statistically significant relationship with the readability of annual reports and that longer tenure has a negative relationship with readability. Moreover, I document that, on average, the effect of audit tenure is stronger when the levels of audit fees are low. Finally, the analysis shows that the relationship between audit firm tenure and readability is relatively stronger in firms with weaker solvency levels. The third empirical chapter investigates the association between the readability of annual reports and auditor switching. The analysis suggests that the relationship between annual report readability and auditor switching in general is insignificant. However, after including the interaction term of switching and performance, the regression analysis suggests that when well performing firms switch their auditor they are more likely to disclose difficult-to-read annual report. Moreover, the mitigating effects of audit fees is insignificant in altering the relationship between switching and readability. The interactive relationship between switching and tenure is highly significant which indicates that, within this context, the effect of switching on readability is negative and that this relationship becomes stronger as the tenure increases. In other words, those firms with longer audit tenure are more likely to produce difficult-to-read annual reports than short-tenured clients. Moreover, the analysis of the short-term effects of switching suggests a negative and highly significant relationship between short-term switching and readability. This indicates that switching firms discloses difficult-to-read annual reports during the three years following auditor switching. Similarly, the regression results of the association between annual report readability and auditor switching within a five-year window (long-term) come in line with expectations, the relationship is highly significant and the sign is negative. This implies that firms that switch their auditor will have difficult-to-read annual reports within five years following the switch. However, it has been documented in the analysis that the effect of switching is stronger over a five-year window than short-term (that is three years following the auditor switching), which signifies delayed switching effects on readability. In both models, the mitigating effects of firm performance and audit tenure are statistically significant. In summary, the findings of this thesis suggest that firms utilise the readability of annual report, and that such practice depends on the audit function. Regulators are urged to examine the impact of client/auditor relationship and its influence on the quality of annual report