Browsing by Author "Baptista, Andreia"
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- Financial performance analysis of eurozone listed companies using dupont modelPublication . Baptista, Andreia; Lopes, José Carlos; Alberto, Fernanda; Nunes, AlcinaThe main objective of this paper is the analysis of factors that can influence the financial performance (measured by “return on equity”) of the Eurozone listed companies. For this purpose, we use the DuPont model to provide useful information to identify the main factors that affect profitability. The data was collected from financial statements of the Eurozone listed companies during the year 2018 (ORBIS database), and the final sample included 750 companies distributed across the 19 Eurozone countries. Using the Ordinary Least Squares (OLS) method, we studied the effects of four factors (tax burden, interest burden, EBIT margin, and assets turnover) in return on equity. The overall results suggest that all factors significantly have an influence in return on equity and, consequently, the financial performance of companies listed in the stock markets of Eurozone countries. The efficient use of total assets, measured by assets turnover, seems to be the most powerful factor with an impact of 0.94% in ROE, due to a variation of 1%. However, all the other factors also show a considerable influence on financial performance.
- The effect of corporate income taxation on companies financial performance - listed companies on eurozone stock marketsPublication . Baptista, Andreia; Alberto, Fernanda; Nunes, Alcina; Lopes, José CarlosThe performance evaluation of a company might be based on financial and non-financial factors. However, on top of the main key performance indicators is always profitability. The return on assets and the return on equity are the most used ratios/indicators used to determine financial performance. Therefore, taxation is always a factor that influences the profitability of any business. The tax burden, measured by the tax effect or by the effective tax rate, is an important factor determining the financial performance of companies listed on stock markets. The higher the tax burden (i.e., the lower the tax effect or, the higher the effective tax rate), the lower the profitability and, consequently, the financial performance. Therefore, the differences in the tax law might have an impact on profits taxation. This study aims to analyse the effect of corporate income taxation (tax effect) on return on equity (ROE) of listed companies of eurozone stock markets. The data was collected from listed companies' financial statements in the Eurozone during 2018 (Orbis database). The final sample is based on 750 listed companies from several activity sectors and located in different Eurozone countries. The research results were obtained using the Ordinary Least Square (OLS) regression method. The return on equity average is approximately 12,7%. The tax effect average is approximately 71,4% (i.e., 28,6% in terms of effective tax rate). Therefore, the influence of the tax effect is significant. The results suggest that for the companies listed in the Eurozone stock market, a variation of 1% in the fiscal effect generates a 1,243% variation in the same direction of the ROE. The relationship is positive, as was expected.
- The effect of corporate income taxation on companies financial performance - listed companies on eurozone stock marketsPublication . Baptista, Andreia; Alberto, Fernanda; Nunes, Alcina; Lopes, José CarlosThe performance evaluation of a company might be based on financial and non-financial factors. However, on top of the main key performance indicators is always profitability. The return on assets and the return on equity are the most used ratios/indicators used to determine financial performance. Therefore, taxation is always a factor that influences the profitability of any business. The tax burden, measured by the tax effect or by the effective tax rate, is an important factor determining the financial performance of companies listed on stock markets. The higher the tax burden (i.e., the lower the tax effect or, the higher the effective tax rate), the lower the profitability and, consequently, the financial performance. Therefore, the differencesin the tax law might have an impact on profits taxation. This study aims to analyse the effect of corporate income taxation (tax effect) on return on equity (ROE) of listed companies of eurozone stock markets. The data was collected from listed companies' financial statements in the Eurozone during 2018 (Orbis database). The final sample is based on 750 listed companies from several activity sectors and located in different Eurozone countries. The research results were obtained using the Ordinary Least Square (OLS) regression method. The return on equity average is approximately 12,7%. The tax effect average is approximately 71,4% (i.e., 28,6% in terms of effective tax rate). Therefore, the influence of the tax effect is significant. The results suggest that for the companies listed in the Eurozone stock market, a variation of 1% in the fiscal effect generates a 1,243% variation in the same direction of the ROE. The relationship is positive, as was expected.