Exploring the Determinants on the Return on Equity post Corporate Financial Distress

• Main Authors: HSU CHEN HONG, 徐振弘
• Other Authors: 江耕南
• Format: Others
• Language: zh-TW
• Published: 2016
• Online Access: http://ndltd.ncl.edu.tw/handle/63938110683158606725

碩士 === 逢甲大學 === 金融碩士在職專班 === 104 === This study choose companies that have undergone financial distress from January 2005 to December 2014 as the samples, and distinguishes them into resolved distress samples and unresolved distress samples according to the presence of date of finishing discharge, and resolved distress samples are the major objects of this study. This study also selects and compares the companies based on the time financial distress occurs and the time it is resolved, and discusses the performance of companies after the financial distress is resolved with hindsight. The return on equity ﹝ROE﹞ is used as the dependent variable to investigate the factors influencing ROE of a company whose distress is resolved. The results showed that the major factor causing the occurrence of financial distress in a company is the increase in debt ratio and deviation between board seats and cash right. And the key factor that resolves the financial crises of a company is the increase in total assets turnover. In addition, when a company has financial distress, the increase in debt ratio and deviation between board seats and cash right can be a concern of the company about business operations. Regarding the intention of a company to increase the return on equity after the distress is resolved, whether or not it has concerns for business operations, the net profit margin must be increased; for companies who do have concerns for business operations, the total assets turnover must also be increased.