-
Analysis for Efficient Stock Index Market
Issue:
Volume 3, Issue 5, September 2015
Pages:
103-116
Received:
6 July 2015
Accepted:
10 July 2015
Published:
17 July 2015
Abstract: According to efficient market hypothesis, all the available information about future spot prices is incorporated into KOSPI200 stock index future contract prices immediately. In this paper, we test the hypothesis by an econometric approach developed by Johansen (2001), etc. Using only past data, we can consider stock market as efficient. (Weak-form EMH) But, it should be noted that if using past index future contract data leads to conclusion that future market is not efficient, and then the news about spot market prices is not fully incorporated in the future market. These tests imply that unbiasedness hypothesis (constant is zero, and coefficient is one) is rejected in regression equation. Notwithstanding, the forecasting performance of the Distributed-lags model using future index was best among competing forecasting models. In summary, there is no significant evidence that stock index spot markets are inefficient. Through long-run equilibrium relationships (and short-run dynamics, error correction), almost all the information for spot index in the past has functioned as spot price discovery in Korea stock markets.
Abstract: According to efficient market hypothesis, all the available information about future spot prices is incorporated into KOSPI200 stock index future contract prices immediately. In this paper, we test the hypothesis by an econometric approach developed by Johansen (2001), etc. Using only past data, we can consider stock market as efficient. (Weak-form...
Show More
-
Economic Value Added (EVA) Disclosure Practices of Sri Lankan Listed Companies
Issue:
Volume 3, Issue 5, September 2015
Pages:
117-127
Received:
5 July 2015
Accepted:
17 July 2015
Published:
28 July 2015
Abstract: Transparency, disclosures and information sharing with stakeholders, command a considerable degree of value to the accompanying financial statements of any corporate or business enterprise. Investors and stakeholders are increasingly looking at the performance of companies which they have invested their hard earned funds. To meet such expectations, good governed companies do adopt practices which add to enhance the value of financial statements and value to its readers. The ideas of free cash flow and the evaluation of business on a cash basis developed by Modiglaini and Miller (1961) were extended into the concept of the Economic Value Added (EVA) (Stewart and Stern 1971). The traditional financial performance measures have not presented the real shareholder value of an enterprise. Thus, the EVA is one of main evaluation criteria of companies’ commitment with shareholder value maximization. In this context, this research investigated the EVA disclosures in the annual reports of Sri Lankan listed companies. Analyzing annual reports of Sri Lankan largest 85 listed companies over a period of 5 years from 2009 to 2013, the results indicated that 15 numbers of listed companies, as a percentage of 17.65 of the sample disclosed the EVA statement in their annual reports. The study further explored the industry composition, residential status, medium of disclosure, areas of EVA application and extent of EVA related computation prepared and disclosed by EVA reporting companies. Univariate analysis was used to identify the extent of EVA disclosures of listed companies in Sri Lanka and it was found that, existence of significant inconsistencies and irregularities in measurement of EVA and its major components of EVA reporting listed companies. The second part of the study explored that the corporate attributes such as back ground information and financial performance indicators of companies are influenced to the choice of EVA disclosure. Therefore, research performed a comparison of differences between EVA reporting and EVA non reporting listed companies on the basis of their background indicators and financial performance measures. Research employed the two independent sample t-tests to identify the factors influencing to EVA usage and disclosure choice of Sri Lankan listed companies in terms of company size, profitability, leverage etc. Research finds that the EVA usage and EVA disclosure choice of Sri Lankan companies are influenced by the company size, leverage and earnings potential. Further, the study recommends the importance of implementing EVA disclosures as a mandatory requirement for Sri Lankan listed companies.
Abstract: Transparency, disclosures and information sharing with stakeholders, command a considerable degree of value to the accompanying financial statements of any corporate or business enterprise. Investors and stakeholders are increasingly looking at the performance of companies which they have invested their hard earned funds. To meet such expectations,...
Show More
-
Research on Audit Quality and Information Content of Internal Control Audit Reports
Issue:
Volume 3, Issue 5, September 2015
Pages:
128-131
Received:
17 July 2015
Accepted:
31 July 2015
Published:
12 August 2015
Abstract: This paper examines investors’ reaction to internal control audit reports by concerning audit quality, we find that companies disclosing unqualified internal control audit reports issued by Big 4 firms have higher earnings response coefficient. So the internal control audit reports can transmit information relevant to investment decisions, but its signals are associated with audit quality
Abstract: This paper examines investors’ reaction to internal control audit reports by concerning audit quality, we find that companies disclosing unqualified internal control audit reports issued by Big 4 firms have higher earnings response coefficient. So the internal control audit reports can transmit information relevant to investment decisions, but its ...
Show More
-
Effect of Leverage on Performance of Non-financial Firms Listed at the Nairobi Securities Exchange
Mukaria Henry Kimathi,
Mugenda Nebat Galo,
Akenga Grace Melissa
Issue:
Volume 3, Issue 5, September 2015
Pages:
132-139
Received:
27 July 2015
Accepted:
6 August 2015
Published:
14 August 2015
Abstract: Managers strive to maximise shareholder wealth by making rational financing decisions regarding optimal capital structure which would minimise its cost of capital. In attempt to magnify the return to shareholders, managers employ the use of debt. When excessive debt financing is employed by a firm, it increases the cost of financing and the financial risk of the firm leading to decreasing the return on equity as a result of financial distress. Do the various debt equity ratio levels lead to different financial performance when compared for high levered and low levered firm, high growth and low growth firm or large and small firms? A causal research design was used to establish the cause and effect relationship between financial leverage and the financial performance of the firms. The target population was 61listed firms on the Nairobi securities exchange by December 2013.Purposive sampling was used to select 38 non-financial companies. Financial companies were eliminated because the company’s capital structures have specific characteristics affected by industry regulatory requirements. Secondary data was obtained from published financial statements of the sampled companies for the six year period from 2008 to 2013.Ordinary Least Square method was used to establish the cause effect relationship among variables; Hypotheses were tested at 5% significance level using t-statistic. The study found that there was no significant difference in financial performance between highly levered and lowly levered firms and that there existed a negative relationship between Leverage and firm’s performance. There were also no significant differences in financial performance between high growth levered firms and low growth levered firms and that there existed a negative relationship between a firm’s growth opportunity and financial leverage ratio. There was no significant difference in financial performance between large levered firms and small levered firms. The findings of this study may act as a policy guideline to finance managers involved in managing firms on the contribution of financial leverage and its association with return on equity to maximise shareholder wealth
Abstract: Managers strive to maximise shareholder wealth by making rational financing decisions regarding optimal capital structure which would minimise its cost of capital. In attempt to magnify the return to shareholders, managers employ the use of debt. When excessive debt financing is employed by a firm, it increases the cost of financing and the financi...
Show More
-
The Effects of Green Accounting in the Society
Hossein Yarahmadi,
Ali Bohloli
Issue:
Volume 3, Issue 5, September 2015
Pages:
140-149
Received:
20 July 2015
Accepted:
1 August 2015
Published:
19 August 2015
Abstract: In today's global economy, organizations are increasingly called upon to demonstrate sound business management that includes concern for economic, social and environmental issues. The challenges created by global competition make it imperative for enterprises to continually rationalize and improve all resources and processes. Separation of responsibilities for the processes that underpin organizational outputs is unsustainable in today's competitive environment. On the base of literature review, we assert that recent achievements proved that ISO's management system standards have a global relevance of and a capacity to benefit from the very largest to the very smallest organizations in both public and private sectors. An Environmental Management System (EMS) provides a solid framework for meeting environmental challenges and realizing the above benefits. Most environmental legislation now originates at the European level, where the main legal instruments are EU directives and regulations. Traditionally, environmental regulation has covered the environmental media. From the early 1990s, a more integrated approach has been taken across all media with Integrated Pollution Control (IPC) and, more recently, the Integrated Pollution Prevention and Control (IPPC) European Directive. We describe in our research the main types of environmental standards used across Europe and their impact on businesses performance. In conclusion we analyse the future key areas the environmental legislation is likely to be developed in
Abstract: In today's global economy, organizations are increasingly called upon to demonstrate sound business management that includes concern for economic, social and environmental issues. The challenges created by global competition make it imperative for enterprises to continually rationalize and improve all resources and processes. Separation of responsi...
Show More
-
Telstra Financial Analysis Report Fy2009 – Fy2013
Issue:
Volume 3, Issue 5, September 2015
Pages:
150-158
Received:
6 August 2015
Accepted:
12 August 2015
Published:
25 August 2015
Abstract: Telstra, short for Telstra Corporation Limited, is avery successful company in Australia. Based on their financial report published these years, we can analyse the feature and how it performed these years. In the article we used horizontal analysis and ration analysis.Based on the external factors, business environment, the financial analysis and the estimated future share price, it is strongly recommended that Telstra is a good investing choice for investors and it will be seen beneficial in both short run and long run.
Abstract: Telstra, short for Telstra Corporation Limited, is avery successful company in Australia. Based on their financial report published these years, we can analyse the feature and how it performed these years. In the article we used horizontal analysis and ration analysis.Based on the external factors, business environment, the financial analysis and t...
Show More
-
Budgets and Budgetary Control as a Management Tool for Ghana Metropolitan Assemblies
Edmund Kyei,
Collins Owusu Kwaning,
Donkor Francis
Issue:
Volume 3, Issue 5, September 2015
Pages:
159-163
Received:
19 August 2015
Accepted:
27 August 2015
Published:
12 September 2015
Abstract: The study examined the budgeting and budgetary control as a management tool in Ghanaian Metropolitan Assemblies with the view to find out the importance attached by metropolitan, municipal and district assemblies in Ghana to how budgets are prepared and implemented, benefits and problems associated with budgeting and the extent at which budget variance reports are used as a performance measure. The survey instrument was questionnaire. Statistical Package for Social Sciences (SPSS 16) software was used to analyze the data. The findings of the study revealed that, metropolitan assemblies prepare budgets and plans to guide their activities and operations and that there is generally a high level of budget participation. The major conclusion was that metropolitan assemblies use a rigorous budgetary control practices in its operations and attaches much importance to budgets and budgetary control as vital tool to aid them in effective and efficient management of their operations. It is recommended, among other things, that appropriate measures should be put in place to enable all the assemblies in Ghana prepare plans and budgets since the practices lead to effective utilization of state resources.
Abstract: The study examined the budgeting and budgetary control as a management tool in Ghanaian Metropolitan Assemblies with the view to find out the importance attached by metropolitan, municipal and district assemblies in Ghana to how budgets are prepared and implemented, benefits and problems associated with budgeting and the extent at which budget vari...
Show More
-
Information Sharing Regulation Introduction and Bank Industry Performance: A Pre and Post Analyses from Ghana
Baah Aye Kusi,
Kwadjo Ansah-Adu,
Isaac Owusu-Dankwa
Issue:
Volume 3, Issue 5, September 2015
Pages:
164-171
Received:
28 August 2015
Accepted:
9 September 2015
Published:
18 September 2015
Abstract: This study assessed credit growth, asset quality and profitability in the banking industry of Ghana during pre and post information sharing eras. The study employed industry level financial ratios to derive means, standard deviations and pearson correlations. The study further employed t-test to test for significant difference in bank performance during pre and post information sharing ears. The results indicate that the Ghanaian banking industry improved in all profitability measure during post-information sharing era. Also, deteriorating asset quality measures were stabilized during post-information sharing era. Furthermore, the study finds that there was a significant difference in non - performing loans ratio in the two information sharing eras. These findings are consistent with earlier findings. Hence the study recommends the establishment of Information Sharing Institutions (ISI), expanding the coverage of ISI and publicizing information sharing in emerging economies so as to strengthen the stability and soundness of the banking system.
Abstract: This study assessed credit growth, asset quality and profitability in the banking industry of Ghana during pre and post information sharing eras. The study employed industry level financial ratios to derive means, standard deviations and pearson correlations. The study further employed t-test to test for significant difference in bank performance d...
Show More
