Level of Financial Performance of Selected Construction Companies in South Africa

<b>Purpose</b>—There is no consensus on the indicators that assess a construction company’s financial performance projects undertaken. There is also a dearth of concepts on the financial performance indicators for construction companies in South Africa and indeed, the wider continent of...

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Autores principales:	Emmanuel Dele Omopariola, Abimbola Windapo, David John Edwards, Hatem El-Gohary
Formato:	article
Lenguaje:	EN
Publicado:	MDPI AG 2021
Materias:	construction organization company size financial performance indicators time frame project management Risk in industry. Risk management HD61 Finance HG1-9999
Acceso en línea:	https://doaj.org/article/ee7f89c5c4954682a6892b1285d2700b
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spelling	oai:doaj.org-article:ee7f89c5c4954682a6892b1285d2700b2021-11-25T18:08:31ZLevel of Financial Performance of Selected Construction Companies in South Africa10.3390/jrfm141105181911-80741911-8066https://doaj.org/article/ee7f89c5c4954682a6892b1285d2700b2021-10-01T00:00:00Zhttps://www.mdpi.com/1911-8074/14/11/518https://doaj.org/toc/1911-8066https://doaj.org/toc/1911-8074<b>Purpose</b>—There is no consensus on the indicators that assess a construction company’s financial performance projects undertaken. There is also a dearth of concepts on the financial performance indicators for construction companies in South Africa and indeed, the wider continent of Africa. This paper proposes novel financial performance indicators for assessing construction organizations and tests these on selected construction companies in the South African construction industry. Design/methodology/approach—This research employed a pragmatic approach. Contractors with financial credibility and capacity of ≥R 40 million, annual turnover of ≥R 20 million, and available capital of ≥R 40 million were purposively selected for this study. Parameters such as total revenue, direct cost of work, total indirect cost and total income were elicited from the sample contractors to assess their financial performance. The assessment was undertaken using formulas that were formulated based on the descriptions provided under the research methodology. Further analysis was conducted using post hoc Tukey’s honest significant difference (HSD). <b>Findings</b>—The study finds that construction companies with a strong structure, multiple areas of specialization, creative and efficient staff members, and access to funding, have a greater chance of experiencing higher: income; positive leverage; positive liquidity; and positive cash flow. Moreover, companies with specialization in civil engineering construction and project management skills experienced higher positive liquidity and profitability. <b>Originality/value</b>—This research is unique through its investigation and formulation of indicators for assessing the financial performance of construction companies. This research is consequently representing the first attempt to analyze financial data using the approaches prescribed and adopted.Emmanuel Dele OmopariolaAbimbola WindapoDavid John EdwardsHatem El-GoharyMDPI AGarticleconstruction organizationcompany sizefinancial performance indicatorstime frameproject managementRisk in industry. Risk managementHD61FinanceHG1-9999ENJournal of Risk and Financial Management, Vol 14, Iss 518, p 518 (2021)
institution	DOAJ
collection	DOAJ
language	EN
topic	construction organization company size financial performance indicators time frame project management Risk in industry. Risk management HD61 Finance HG1-9999
spellingShingle	construction organization company size financial performance indicators time frame project management Risk in industry. Risk management HD61 Finance HG1-9999 Emmanuel Dele Omopariola Abimbola Windapo David John Edwards Hatem El-Gohary Level of Financial Performance of Selected Construction Companies in South Africa
description	<b>Purpose</b>—There is no consensus on the indicators that assess a construction company’s financial performance projects undertaken. There is also a dearth of concepts on the financial performance indicators for construction companies in South Africa and indeed, the wider continent of Africa. This paper proposes novel financial performance indicators for assessing construction organizations and tests these on selected construction companies in the South African construction industry. Design/methodology/approach—This research employed a pragmatic approach. Contractors with financial credibility and capacity of ≥R 40 million, annual turnover of ≥R 20 million, and available capital of ≥R 40 million were purposively selected for this study. Parameters such as total revenue, direct cost of work, total indirect cost and total income were elicited from the sample contractors to assess their financial performance. The assessment was undertaken using formulas that were formulated based on the descriptions provided under the research methodology. Further analysis was conducted using post hoc Tukey’s honest significant difference (HSD). <b>Findings</b>—The study finds that construction companies with a strong structure, multiple areas of specialization, creative and efficient staff members, and access to funding, have a greater chance of experiencing higher: income; positive leverage; positive liquidity; and positive cash flow. Moreover, companies with specialization in civil engineering construction and project management skills experienced higher positive liquidity and profitability. <b>Originality/value</b>—This research is unique through its investigation and formulation of indicators for assessing the financial performance of construction companies. This research is consequently representing the first attempt to analyze financial data using the approaches prescribed and adopted.
format	article
author	Emmanuel Dele Omopariola Abimbola Windapo David John Edwards Hatem El-Gohary
author_facet	Emmanuel Dele Omopariola Abimbola Windapo David John Edwards Hatem El-Gohary
author_sort	Emmanuel Dele Omopariola
title	Level of Financial Performance of Selected Construction Companies in South Africa
title_short	Level of Financial Performance of Selected Construction Companies in South Africa
title_full	Level of Financial Performance of Selected Construction Companies in South Africa
title_fullStr	Level of Financial Performance of Selected Construction Companies in South Africa
title_full_unstemmed	Level of Financial Performance of Selected Construction Companies in South Africa
title_sort	level of financial performance of selected construction companies in south africa
publisher	MDPI AG
publishDate	2021
url	https://doaj.org/article/ee7f89c5c4954682a6892b1285d2700b
work_keys_str_mv	AT emmanueldeleomopariola leveloffinancialperformanceofselectedconstructioncompaniesinsouthafrica AT abimbolawindapo leveloffinancialperformanceofselectedconstructioncompaniesinsouthafrica AT davidjohnedwards leveloffinancialperformanceofselectedconstructioncompaniesinsouthafrica AT hatemelgohary leveloffinancialperformanceofselectedconstructioncompaniesinsouthafrica
_version_	1718411594414686208

Level of Financial Performance of Selected Construction Companies in South Africa

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