dc.description.abstract | This study is aimed to using Logit model, TTEST﹑NPARIWAY﹑ANOVA regression analysis & K-W Test to find key financial ratios from 10 of Taiwan Corporate Credit Risk Index and 12 of other selected financial ratios/values which are related to Corporate Governance, Long-term Investment & Inter-Companies transactions..etc. Which can distinguish operational performance between regular and default companies, Listed vs. OTC companies and performance among companies that located at headstream, middle steam and downstream of Taiwan Textile Industry.
The samples of this study contain a total of 72 listed companies in textiles on the Taiwan Stock Exchange and OTC companies during the period from 1998 to 2002. All financial data were collected from the financial database of Taiwan Economic Journal.
A brief summary of the major findings are given below:
1.7 out of 10 TCRI financial ratios can obviously distinguish the performance between regular and default companies. They are profitability, liquidity, interest coverage analysis related ratios and total assets of the companies; we found that the total revenue & total assets of Listed companies were greater than OTC companies. However, DSO of the Listed companies were shorter than OTC companies in average; the scale of companies that located at headstream were larger than the companies that located at middle stream & downstream of the Textile industry in Taiwan.
2.As for the other 12 selected financial ratios, we found that the fixed assets turnover and the percentage of shares of management board and supervisory board of the regular companies were higher than the default companies. The growth ratio of earning from operation of the regular companies was better than the default companies. Long-term investment performance of the regular companies was better than the default companies. And the percentage of accounts payable of inter-companies of default companies were
higher than the percentage of regular companies; As for the market value of equity﹑Long-term investment vs. equity﹑the ratio of stock hypothecation of management board and supervisory board﹑the percentage of inter-companies transactions, the listed companies were higher than the default companies. The fixed assets turnover and the percentage of shares of management board and supervisory board of listed companies were lower than OTC companies; The market value of equity of the companies which located at headstream were larger than the value of the companies which located at middle stream and downstream respectively. Long-term investment vs. equity and fixed assets turnover of the companies, which located at downstream were higher than the companies at headstream and middle stream.
3.From the empirical test for logit model, the chi-square value was 39.41, P-value was lower than 0.01, which shown that the model is quite appropriate. The quick ratio and interest expense ratio are the key factors to distinguish the performance between regular companies and default companies. And the study also proved that the model will not increase the ability of prediction if we add Corporate Governance, long-term investment related factors.
4.The default ratio of the default companies was higher than the regular companies not only on the average of three years but also at the default occurred year, the previous one and two years before. And default ratio will be increased if the time is approaching to the default occurred year; Same as Listed companies, the default ratio of the listed companies was higher than the OTC companies not only at the average of three years but also at the default occurred year, the previous one and two years. And default ratio will be increased if the time is approaching to the default occurred year; There was no significant difference on the default ratio for the companies among headstream, middle stream and downstream of Textile industry in Taiwan.
5.From the empirical test for logit model, the mean correcting rate for regular and default companies was 92.4%, the mean correcting rate at two years before the occurred year was 73.6%. | en_US |