Study Regarding the Substantiation of Managerial Decisions for a More Efficient Use of Shareholders’ Investments in the Audited Entities
Author:
Univ. Lecturer, Sorin Romulus BERINDE, Ph.D.; Associate Prof. Adrian GROȘANU, Ph.D.; Associate Prof. Paula Ramona RĂCHIȘAN, Ph.D.
JEL:
M42, M41, M48
DOI:
Keywords:
return on common equity, audited entities, managerial decisions, effectiveness of shareholders’ investment, corporate governance
Abstract:
The study of the impact of shareholder structure, in the case of audited entities, on the effectiveness of the use of resources invested by shareholders may be a useful source of information not only for investors, in the event of taking decisions to invest or disinvest, but also for managers, in terms of assessing the strengths and weaknesses of managerial policies that have been adopted. Thus, the authors have analyzed the stockholders investment efficiency, as the basis to future management decisions ensuring increased efficiency of shareholders capital. The object of the study is represented by audited entities from the North-West Region between 2005 and 2012, which published their financial statements for each financial year between 2008 and 2012. The authors have conducted a separation of the effectiveness of the use of own capitals into three components: profit rate, rotation speed of total assets and financial leverage effect. By applying the method of indices, the authors concluded that the audited entities which include only local participation in social capital provide shareholders an average yield higher that is offered by bank deposits. On the other hand, the audited entities with foreign participation in social capital ensure a level of effectiveness which is below that of bank deposits, due to a low value of profit rate and to the lower effectiveness stemming from the use of total assets.\r\n\r\n