A Macro-Financial Model for Business Financial Planning to Prevent the Risk Impacting the Return on Equity (ROE): Agribusinesses Listed on the Stock Exchange of Thailand
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Abstract
This study aimed to develop a macro financial model for business financial planning (MFM-FP), and to measure the efficiency of the forecasting model. In addition, the likelihood of the risk impacting the return on equity (ROE) and financial planning guidelines was examined by using economic data, income statements, and balance sheets of agribusinesses listed on the Stock Exchange of Thailand between 2016 and 2019. MFM-FP was built in the form of simultaneous equations by employing the 2SLS method. The mean absolute percentage error (MAPE) was used to assess the efficiency of the model, while the risk was considered by setting risk limits. DuPont analysis was brought in to build a financial plan in order to reduce the risk that could impact the ROE. The developed MFM-FP model contained 39 equations, divided into 15 identity equations, 22 behavioral equations, and 1 conditional equation; with 7 divided blocks. Ex-ante and Ex-post forecast accuracy of all financial statement factors (assessed by MAPE) were found to be no more than 3.08%. Results also showed that the forecasted ROE in Q1 of 2019 was -1.09%, which was within one standard deviation of the mean. However, if the GDP growth was -3.72%, the forecasted ROE would turn out to be -2.35%, indicating a high-risk level. Therefore, agribusinesses should mitigate the risk impacting the ROE by reducing costs, account receivables, and inventories.
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This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.
ลิขสิทธิ์ของบทความ
ผลงานที่ได้รับการตีพิมพ์ถือเป็นลิขสิทธิ์ของมหาวิทยาลัยหอการค้าไทย ห้ามมิให้นำเนื้อหา ทัศนะ หรือข้อคิดเห็นใด ๆ ของผลงานไปทำซ้ำ ดัดแปลง หรือเผยแพร่ ไม่ว่าทั้งหมดหรือบางส่วนโดยไม่ได้รับอนุญาตเป็นลายลักษณ์อักษรจากมหาวิทยาลัยหอการค้าไทยก่อน
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