‫باسمه هللا‬
‫جزوه زبان تخصصی‬
‫حسابداری‬
‫دانشگاه آزاد اسالمی واحد میانه‬
‫مهر ‪4931‬‬
The Impact of Quality Practices on Productivity and Profitability in the Saudi Arabian
Dried Date Industry
Introduction
Many studies of Saudi Arabia’s manufacturing sector have stressed the importance of
producing high-quality products, while also looking at ways to improve productivity and
profitability. An increasing number of Saudi manufacturing companies have embraced total
quality management (TQM) to meet performance targets in areas such as productivity and
profitability. Quality refers to the degree to which a product or service meets customers’
specifications and needs. Organizations are now focusing on satisfying customers’ needs. The
strategy that many organizations have adopted to achieve customer satisfaction involves
emphasizing quality products and services; this approach is unsurprising given that an
organization hoping to achieve, enhance, and sustain competitiveness must provide superior
quality products and services to its consumers (Lai et al., 2002).
Given that quality is a strategic competitive tool (Yong and Wilkinson, 2002; Hansen, 2001),
an organization must acknowledge the strategic implications that quality will have on its
competitive position. This has led to the emergence of numerous quality systems and
initiatives, including just-in-time (JIT), total quality management (TQM), the Deming Prize,
the Shying Prize, and the ISO standards.
QM is considered essential for an organization’s success, as well as for its relationships and
partnerships with its customers and suppliers. Quality management actually indicates the
quality of a company’s management, and quality assurance (QA) practices initiate and
develop confidence among an organization’s customers and its other stakeholders. The main
instigator of QM implementation is senior management, which creates the values, goals, and
systems needed to meet customers’ expectations and improve the performance of the
organization (Ahire et al., 1996). Focusing on customers helps a business remain cognizant of
which changes are occurring in its environment and the knowledge that the business needs in
order to develop the product or service. Similarly, benchmarking enables organizations to
continuously compare and measure themselves against leading businesses around the world
in order to obtain information and provide guidelines for rational performance goals (Boone
& Wilkins, 1995).
Impact of Agency Costs of Free Cash Flow on Dividend Policy, and Leverage of Firms
in Iran
ABSTRACT: The objective of this study is to examine how firms in Tehran Stock Exchange
control agency costs of free cash flow? And test the effect of agency costs of free cash flow
on dividend and leverage. We use agency costs variables. Size, risk, Profit, growth, to
measure the level of agency costs of the firms and use Dividend and leverage mechanism to
control the agency costs of free cash flow. To this end, 101 companies listed in Tehran Stock
Exchange during the period 2007 to 2012 were studied and multivariate linear regression
model using fixed effects by panel data approach was used. Results show that there are
Positive significant effect agency costs of free cash flow on use Dividend and leverage. Oslo
size and profitability have positive significant effect on Dividend. Growth and risk have
negative effect on Dividend but risk effect not statistically significant.
Keywords: Agency Costs of Free Cash Flow, free cash flow, Growth opportunities, financial
Leverage, Dividend.
Impact of financial leverage on dividend policy: Empirical evidence from Karachi Stock
Exchange-listed Companies
This paper examines the relationship between dividend policy and financial leverage of 403
companies, listed with Karachi Stock Exchange during the period 2002 to 2008. Dividend
policy, vastly followed by the companies, was tested by applying the extended model of
Linter (1956) with the debt ratio of the firm, the previous year’s dividend yield as its
independent variables and change in earnings as a dummy variable. At first, the descriptive
statistics for our entire variables were calculated and then correlation matrix was calculated to
identify the preliminary relationship among all the variables, followed by regression analysis
on panel data to examine the significance and magnitude through fixed and random effects
models. Theoretical assertions were justified through random effect model that the level of
corporate debt (leverage) and widely practiced dividend policy, significantly, affect the
dividend policy of the Pakistani firms. On the other hand, financial leverage was found to
have a negative impact on dividend payout, indicating less dividend payments by high-debt
firms. The findings also revealed/confirmed that change in earnings has no significant impact
on dividend policy in case of Pakistani firms while the dividend yield has positive impact and
vice versa. Fixed effect model, applied for the study, supports only the significant effect of
dividend yield on dividend per share.
Key words: Dividend policy, leverage, earnings, dividend yield, corporate debt, Pakistan,
KSE.
Relationship between Corporate Governance and Dividend Payment
Policy of Companies Listed In Tehran Stock Exchange
ABSTRACT: The main objective of this study is to determine the relationship between
corporate governance and payout policies. Our sample consists of 100 companies listed in the
Tehran Stock Exchange during the years 2005 and 2011and the statistical methods applied,
consist of logic regression analysis and the comparative average of various groups. The
corporate governance index includes the ratio of non-duty members of the board, board size,
the dual responsibility of the CEO, the amount of stock owned by institutional investors, size
of the auditing company, audit report quality and auditor replacement. Results of this study
suggest that dividend is the result of the quality of corporate governance, and in companies
where the rights of shareholders are not observed; opportunistic directors employ free
flowing funds to invest in projects and fields that enhance their own prestige, grandeur and
reputation. Biphasic results showed a meaningful correlation between the profitability of
operations, liquidity, asset structure, corporate size and financial leverage and the payout
policy. A relatively weak relationship exists between asset structure dividend payout policy
while no meaningful relationship exists between growth opportunities and the latter.
Key words: Agency Theory, Corporate Governance, Payout Policy
Free Cash Flow, Growth Opportunities, And Dividends: Does Cross-Listing Of Shares
Matter?
Corporate dividend policy should strike a balance between paying cash to shareholders when
there are excess resources and retaining sufficient resources in the company to fund
worthwhile projects. Using excess resources to pay dividends can help to avoid
overinvestment by the company in inappropriate projects and/or other potential misuse of
funds by managers for their own benefit. However, companies also need to avoid paying too
much in dividends to ensure that adequate resources are available within the company to fund
projects that could increase shareholder wealth (i.e., to avoid underinvestment). Cross-listing
of company shares can improve governance and oversight, which may make the dividend
policies of cross-listed companies more likely to avoid both over and underinvestment.
Using a sample of Chinese listed companies from 2003 to 2011, we find that cross-listed
companies pay higher dividends than non-cross-listed companies when there are excess
resources (measured by free cash flow), thereby reducing the potential for
overinvestment/misuse of the resources by cross-listed companies. We also find that the
dividends of cross-listed companies are lower than those of non-cross-listed companies when
there are greater growth opportunities (measure by the market-to-book ratio), reflecting the
reduced potential for underinvestment by cross-listed companies. We find more limited
evidence that cross-listings may influence the relationship between dividend volatility and
free cash flow and growth opportunities. Overall, our results suggest that company's crosslisting their shares have dividend policies that are more responsive than those of non-crosslisted companies to potential shareholder concerns about over and underinvestment.
Keywords: Dividend Policy; Cross-Listing; Free Cash Flow; Growth Opportunities
The Effects of Internal factors and Stock Ownership Structure on Dividend Policy on
Company’s Value [A Study on Manufacturing Companies Listed on the Indonesia
Stock Exchange (IDX)]
ABSTRACT: This study intends to examine and analyze the effects of internal factors and stock
ownership structure on dividend policy and their impacts on company’s value and examine the
influence of dividend policy on company’s value. Internal factors cover free cash flow, company size,
debt, asset growth, return on equity and financial risk while stock ownership structure cover
managerial and institutional stock ownership. The study involved all of the manufacturing companies
listed on the Indonesia Stock Exchange (IDX). There are 164 companies, 55 of which were selected
using saturation sampling. The sampling was conducted during the six-year observation periods from
2005 to 2010 totaling 330 observations (6 x 55). The data were analyzed by applying Smart PLS
(Partial Least Square). The results showed that: (1) free cash flow and company size have no effect on
dividend policy but on company’s value, meaning that free cash flow and company size do not
determine dividend policy but company’s value; (2) Return on Equity has no effect on company’s
value but on dividend policy, meaning that profitability determines dividend payment; (3) Debt, asset
growth and financial risk affect dividend policy and company’s value; (4) Managerial ownership has
no effect on dividend policy but on company’s value, while institutional ownership positively and
significantly affects dividend payment and company’s value. This indicates that corporate
management is a representation of company’s ownership as a company’s control. (5) Dividend policy
positively affects company’s value significantly. This result confirmed previous finding concluding
that dividend payment has impact on company’s value.
KEYWORDS: Internal factors, dividend policy, stock ownership structure, company’s value.
The impact of financial leverage and debt ratios in comparison on the future returns on equity
The issue of how to finance has caused extensive research in the area of finance and accounting.
Despite the extent of funding, managers have to be aware about how to finance and the effects of
applying each of its operating performance on profitability and future stock returns of the company.
Therefore, in this study,
Financial leverage and debt financing effect is studied in comparison on the future returns on equity
of 80 companies listed in Tehran Stock Exchange and continuously active from 2007 to 2013. The
data collection process has been devised by Tadbir Pardazesh database software. The present paper,
the method and the nature of the study is cross - correlation. The positive relation has been found
between financial leverage and ratio of debt with equity future returns of firms. The study aimed to
determine the variables relationship. Source of research data collection included the financial
statements and resolutions of the ordinary and extraordinary general meetings of the Company. The
instruments used for data collection included observation, statistical analysis, databases, SPSS and
Excel software. The findings of this study, in addition to filling the gap in this field of research are
useful for managers and investors.
Keywords: Financial ratios, Leverage ratios, Debt to operating leverage, Market Common
shareholders' value ratios, Return on equity
THE IMPACT OF USING ACCOUNTING INFORMATION SYSTEMS ON THE
QUALITY OF FINANCIAL STATEMENTSSUBMITTED TO THE INCOME AND
SALES TAXDEPARTMENT IN JORDAN
Abstract
This study aim to demonstrate the use of the accounting information systems’ impact
on the quality of financial statements submitted to the Income Tax and Sales department in
Jordan and the impact of such use, where Income Tax and Sales department works to collect
tax money and auditing on tax payers in order to supply the state treasury with public
revenues, a questionnaire consists of fourteen questions was designed by the researcher to
measure the impact of the use of accounting information systems on the quality of financial
statements submitted to the department, this questionnaire was distributed on 50 accountants
who work in the department, all distributed questionnaires were retrieved, arithmetic mean
and standard deviation have been extracted to describe the answers of the study sample,
Cronbach's alpha test was used to measure the stability of measurement tool and also simple
linear regression test was also used to test the hypothesis of the study. The study found that
there is a presence of an impact when using the accounting information systems on the
quality of financial statements submitted to the Income Tax and sales Department in Jordan,
the study recommends to focus on the development of the devices used in the department,
train and development of the staff on an ongoing basis to enable them to continue to perform
their jobs and improve the quality of financial statements in the department.
Keywords: Accounting information systems, the quality of financial statements, income tax
and sales department in Jordan.
The Role of Computerized Accounting Information in Product Pricing and Cost
Measurement in Jordanian Industrial Corporations
Abstract: The study aims to identify the role of accounting information systems applied in measuring
costs and pricing of industrial products, and learn about the impact of the role of the successful
pricing strategies employed in Jordanian Industrial Corporations. This study shows the impact of
accounting systems in Jordanian industrial companies over pricing mechanisms and strategies of
industrial products and measuring production costs which, in addition to identifying the most
important benefits information from use of these systems, and to take the right decisions in industrial
product pricing to win highly competitive industrial companies and enable them to ascend and
achieve higher profitability. this study defined that The accounting system helps determine the cost of
inventory by linking the procurement system with the accounting system to give the average cost in
addition to the purchase price at the beginning of the year and the end of the purchase price of this
helps to compare the increase in purchase prices , Pricing of industrial products in industrial
companies through accounting information systems preclude an extra cost ,and Many industrial
companies on accounting information systems in pricing their products heavily industrial.
Impact of Financial Leverage on Dividend Policy at Tehran Stock Exchange:
A Case Study in Food Industry
Abstract
This paper examines the relationship between dividend policy and financial leverage of 33 food
companies listed in Tehran Stock Exchange with 242 data ‚during the period 2003 to 2010. Dividend
policy‚ vastly followed by the companies ‚was tested by applying the extend model of Linter (1956)
with the debt ratio of the firm ‚the current year’s dividend yield as its independent variables and
change in earnings as a dummy variable. At first ‚the descriptive statistics for our entire variables
were calculated and then correlation matrix was calculated to identify the preliminary relationship
among all the variables‚ followed by regression analysis on panel data to
Examine the significance and magnitude through fixed and random effects model. Theoretical
assertion were justified through random effect model that the level of corporate debt (leverage) and
widely practiced dividend policy‚ significantly‚ affect the dividend policy of the Iranian firms. The
factors affecting dividend policy included sources and uses of funds set, why and how to select a
particular source‚ according to requirements of the outside environment and also dominant
phenomena within the company. In such circumstances‚ this current research has tried to focus on
Financial performance of companies listed in Tehran Stock Exchange to examine effects. This
research aimed to explore the impact of financial leverage‚ dividend policy in food industry
companies listed in Tehran Stock Exchange Market. For this purpose‚ Independent variables in debt
ratio‚ Stock returns and changes in Food group income from Stock are collected. Dividend per share
is considered as only variable dividend policy that accounts for behavior of corporate managers in
corporate financial decision. Food industry companies have positive effect on variables in dividend
yield and changes income‚ but debt ratio has no meaningful relationship on dividend per share. It has
only positive relationship‚ if the rate of debt ratio is less than dividend yield. When rate of debt ratio
is more than dividend yield‚ it has negative relationship.
Keywords: Dividend Policy, Leverage, Earnings, Dividend Yield, Corporate Debt, Tehran Stock
Exchange
Effect of Accounting Information System on Organizational Effectiveness: A Case
Study of Selected Construction Companies in Ibadan, Nigeria
Automated Accounting Information System (AAIS) provides a tool for finance department
to enhance organizational effectiveness especially in this era of global technology
advancement. The study examined the effect of accounting information system on
organizational effectiveness with special reference to selected construction firms in the
Ibadan metropolis. Specifically, the study examined the effects of accounting information on
quality of financial reports and decision –making. Purposive sampling technique was adopted
in selecting a total of ten personnel from each of the selected companies as sample for the
study. A hypothesis was formulated and both descriptive and inferential statistical tools were
employed to analyze the data. The results show that accounting information system has effect
on organizational effectiveness. Recommendations were subsequently made to both the
managers of such organization and government on how the use of AAIS known as ‘Contract
Plus– Financial and Project Accounting’ package software can enhance performance in
Finance Departments.
Keywords: accounting, information system, organization, contract plus, global technology
THE IMPACT OF ACCOUNTING INFORMATION SYSTEMS ON FINANCIAL
PERFORMANCE – A CASE STUDY OF TCS – INDIA
ABSTRACT: Accounting information systems (AIS) as a part of company’s information
systems (IS) are seen as facilitating decision making within organizations and should be
tailored to an organization’s environment, requirements of task, and structure. An accounting
information system is a structure that a business uses to collect, store, manage, process,
retrieve and report its financial data so that it can be used by accountants, consultants,
business analysts, managers, chief financial officers(CFOs), auditors and regulatory and tax
agencies. In particular, specially trained accountants work with AIS to ensure the highest
level of accuracy in a company's financial transactions and recordkeeping and to make
financial data easily available to those who legitimately need access to it, all while keeping
data intact and secure. In this research, given to the subject studied, the role of accounting
information systems on organizational environment from the perspective of top managers,
five hypotheses related to the research were taken into account. Questionnaire was designed
in part of top managers, includes 30 questions. By using the statistical package SPSS for
testing each relationship, an output value called P-value which is the same –p, significance
probability was obtained. Finally, The mean of each research hypothesis, after the test was as
follows: first hypothesis 4.2584, second 3.5123, third 3.0958, four 3.5966 and five hypothesis
3.7042.
Keyword: Accounting Information System, Information System, Organization Performance,
Accountants, Decision Making
THE ROLE OF COST INFORMATION IN DECISION-MAKING, CASE STUDY
ABSTRACT: The purpose of this paper is to understand how information derived from
management accounting has an impact on development and foundation of new decisions and
therefore to better understands the relationship between management accounting and
information. Using as an example a case study from the mining industry we will show the
efficiency of information provided by management accounting in decision making and the
operational control of the production process.
Key Words: Cost, Management Accounting, Information, Expenses.
THE ROLE OF MANAGEMENT AS A USER OF ACCOUNTING INFORMATION:
IMPLICATIONS FOR STANDARD SETTING
ABSTRACT
The aim of this paper is to analyze the question of whether the sole focus of standard setters
developing accounting standards that are useful to external users for making decisions about
providing resources to the entity result in useful accounting information. To answer this
question, we analyzed the relationship between the stewardship function of financial
accounting and the demand for information useful in making economic decisions on resource
allocation (decision-making demand; decision-useful information) by external investors. We
first analyses information within an efficiency based framework of financial economics
abstracting from agency conflicts. We demonstrate that decisions on resource allocation not
only require forward-looking, but also backward-looking performance measures which
indicate the necessity as well as the direction of corrective action. Next, we introduce
information asymmetries and incentive problems. In this setting, the stewardship function of
Accounting gains relevance. External users now need not only information for their
investment decisions but also information to use in assessing management performance and
to gain insight into how management used the entity’s resources. Since however, managers
anticipate the way they are evaluated, any accounting information used to control
management has an incentive effect and alters management’s internal decision-making.
Therefore, standard setters cannot ignore the incentive effect (stewardship function) of
financial accounting information and the consequence it has for decision- stewardship as
compatible functions of accounting, accounting rules need to serve both functions
simultaneously, that is, provide information that is useful for investors for making economic
decisions and at the same time provide incentives for managers to act in the owners’ best
interests. Or, if in fact the two functions are considered distinct and incompatible, then they
must be separated and considered explicitly. That is, managers should then not be held
accountable for their actions based on accounting information.
Keywords: Decision-Usefulness, Qualitative Characteristics, Stewardship, Standard Setting
A Balanced Scorecard Approach to Enterprise Systems Performance Measurement
Abstract
A range of influences, both technical and organizational, has encouraged the wide spread
adoption of Enterprise Systems (ES). Nevertheless, there is a growing consensus that
Enterprise Systems have in many cases failed to provide expected benefits. The increasing
role of, and dependency on ES (and IT in general), and the ‘uncertainty’ of these large
investments, have created a strong need to monitor and measure ES performance. This paper
reports on a research project aimed at deriving an ‘Enterprise Systems benefits measurement
instrument’. The research seeks to identify how Enterprise Systems benefits can be usefully
measured, with a ‘balance’ between qualitative and quantitative factors.
Keywords: Enterprise Systems, Information Systems, Performance Measurement, Balanced
Scorecard, Governmental IS
Performance effects of using the Balanced Scorecard: a note on the Dutch experience
This article aims to contribute to understanding how to use the Balanced Scorecard (BSC)
effectively. The BSC lends itself to various interpretations. This article explores how the way
in which the BSC is used affects performance. Empirical evidence from Dutch firms suggests
BSC use will not automatically improve company performance, but that the manner of its use
Matters: BSC use that complements corporate strategy positively influences company
performance, while BSC use that is not related to the strategy may decrease it. We discuss the
Findings and offer managers guidance for optimal use of the BSC.
Effects of Management Earnings Forecast on Capital Cost and Stock Return
ABSTRACT: Forecasting earnings per share is an essential factor in investment and is
considered important in share adoption methods. It is important both for providers and users.
Managers try to estimate future earnings per share in order to gain the confidence of users,
who, in return, consider it as a measure of evaluating performance. The present empirical
study undertakes to evaluate effects of management earnings forecast on capital cost and
stock return in companies listed at Tehran Stock Exchange. This is done using two variables
of earnings forecast frequency and earnings forecast errors. Population of the study
constitutes 81 active companies in Tehran Stock Exchange. Financial statements of these
companies in a period of six years from 2006 to 2011 have been studied. The study proposes
four hypotheses and uses mean comparison test of the two populations and multivariate linear
regression test with company-year method, in order to test them. Results of the study indicate
a significant and converse relationship between earnings forecast frequency and cost of
capital, and also a direct and significant relationship between earnings forecast errors and
capital cost in companies under observation.
Key words: earnings forecast frequency; earnings forecast errors, capital cost, and stock
return
An Examination of the Factors Influencing the Level of Consideration for Activitybased Costing
Abstract: Prior research into the extent to which operating units have considered activitybased costing (ABC) has either examined the extent to which operating units have considered
or not considered ABC. This paper uses logistic ordinal regression analysis to examine the
impact of the level of competition, product customization, manufacturing overhead costs and
operating unit size on the level of consideration for ABC when measured on a three-point
ordinal scale ranging from not considered, considering and considered ABC. The results
indicate that operating unit size is related positively to the level of consideration for ABC.
This implies that the availability of financial, labor, computing and time resources should
mean that it is more likely for operating units to be considering or have considered ABC.
Keywords: Activity-based costing (ABC), Consideration for ABC, Ordinal regression
Activity Based Costing Systems: An analysis of successful implementation and impact
On organizational performance
Abstract
Activity based costing (ABC) systems have been widely implemented since halfway the
eighties. A change of a costing system is a timely and costly process. Organizations will also
adapt such a system if it reflects improvements in financial and organizational performance.
It is therefore important that the implementation is successful. In this thesis the relation
between successful implementation and financial and organizational performance is
identified, where prior literature discusses either the implementation or the effect after
implementation. Determinants of successful implementation are identified, by analyzing
existing literature, as contextual factors such as economical, organizational and
environmental factors. In combination with top management support, non-accounting
ownership and several other company specific factors the success of the Implementation is
determined. These same factors contribute to a positive relation between successful
implementation and both financial and organizational/operational Performance. The effect is
noticed in an indirect manner. Several business initiatives such as just-in-time (JIT)
production and total quality management (TQM) improve Organizational performance when
ABC systems are implemented. The factors that enable companies to use such initiatives are
comparable to the factors determining successful implementation of ABC systems.
The Influence of Organizational and Environmental Factors on Cost Systems Design in
Egypt
Abstract: This paper aims at examining the extent to which organizational and
environmental factors influence the cost systems design in Egyptian manufacturing firms. We
use a questionnaire to survey a sample of Egyptian privately held firms in a wide spectrum of
industrial sectors. The results reveal that the use of highly sophisticated cost systems in
Egyptian manufacturing firms is limited, simple and complex traditional systems are widely
used, and very few firms adopting simple Activity-Based Costing. Additionally, it was found
that the sophistication level of cost systems is positively associated with the importance of
cost information, while no association was found with product diversity, intensity of the
competitive environment and cost structure. The results suggest that improvement in
manufacturing performance resulting from reducing cycle and lead times, improving product
quality and reducing costs is associated with an effective selection of cost system.
The findings of this study will help management and practitioners in the Egyptian industrial
sector to design effective cost systems with a certain level of sophistication that rationalize
decisions and improve manufacturing performance. This study is one of few surveys that
examine the impact of contextual factors on the product cost sophistication level and
manufacturing performance in the Egyptian context.
Keywords Product cost systems, Activity- Based Costing, cost centers, cost pools, cost
drivers, environmental culture, organization culture, Egypt.
Exploration of Factors Influencing on Choice the Activity-Based Costing System in
Iranian Organizations
Abstract: As a tool for planning and control, costing systems play a considerable role in
providing information needs for managers. Given the diversity of costing systems and
simultaneous advancement of new costing systems, choosing a costing system may challenge
managers. This research seeks to explore such organizational factors as organization size,
industry type, cost structure, the importance of cost information, and products and services
diversity on adopting Activity-Based costing (ABC) system in the listed companies of the
Tehran Stock Exchange. Using logistic regression model from 33.5% of respondents in the
sample, the results of this survey study indicates a positive relationship among cost structure,
the importance of cost information and products and services diversity (in term of products
and services liner numbers). It also indicates a negative relationship among the type of
industry, organization size and product and services diversity (in terms of support diversity
and volume diversity) with adopting the mentioned system. There was not any significant
relationship between above organizational factors and choice of the ABC system.
Keywords: Costing Systems, Activity-based costing system, Overhead (Indirect)
EARNINGS MANAGEMENT TO JUST MEET ANALYSTS’ FORECAST
ABSTRACT
My study seeks to answer the following research question: given the strong emphasis on
meeting or beating earnings targets, do firms “manage” earnings to meet these targets? I
focus my attention particularly on firms that have a strong motivation to meet these targets,
that is, firms which have intrinsic earnings that nearly meet earnings targets and therefore
more likely to manage their earnings upwards in order to meet these objectives. My results
provide some support that these firms may have managed earnings upwards to meet earnings
expectations, but that do not imply that firms that just meet forecasts experience inferior
future firm and stock performance. I posit that this may be the case because firms that just
meet forecasts have the ability to do so as they are inherently financially healthy firms, and
the capital markets accept this fact and reward these firms accordingly for meeting earnings
targets.
Accounting Earnings Quality
Abstract: Profit and loss has always been the main basis for investors' decision-making in the
capital market whose correctness, accuracy, reliability, reassurance and predictability has
direct relationship with correct major made decisions, but the existence of main shortcomings
and failures such as the use of judgments, several methods of accounting and earnings
management, threaten its undeniable role in decision-making. To reduce the effects of such
threats, earnings quality is used. Earnings quality is an important aspect to evaluate the
financial health of the company which has been noted by investors, creditors, and other users
of financial statements. Therefore, in this study, first we define earnings quality from the
perspective of the scholar. Afterward, the earnings quality components and the evaluation
methods of profits are completely described. In the next section, the relationship between
firm characteristics and the quality of earnings has been introduced. In continuance, the
relationship between earnings quality, cost and return on equity and cash flows of the firm are
discussed. In the end, the concluded results are discussed.
CUSTOMER PERCEPTIONS OF VALUE: CASE OF RETAILBANKING
Abstract. Recently, a growing interest in relationship marketing approach attracted much
attention of marketers to the customer value creation and delivery as the most important task
of marketing strategy. The fact that in the period of economic recession, the retail banking
sector customers are more intended to re-assess their relationship with financial organization
made marketing experts focus on the investigation of the factors that create and increase
customer value in new light. Value creation and delivering to the customer in financial
markets has been viewed as a competitive priority and a key component of an organization’s
long term success.
The aim of the current research paper is to assess the factors of customer perceived value in
the retail banking sector during the period of economic recession. The research method
involved the survey conducted with 200 retail customers of commercial banks in Lithuania.
In addition, this research specifically examines the perception of value in the transitional
economy. The study results revealed that in the period of economic recession the dimensions
of emotional (affective) value (i.e., the reliability and security of bank, good psychological
climate when contacting with bank personnel) and functional value (i.e., the quality of service
provision, the competence of contact personnel) are rated higher by customers. Meanwhile,
the factors of social value (i.e., the established long-term relationship, personal beliefs, social
integration, the opinion and recommendations of relatives, acquaintances and/or friends) are
rated lower.
An Empirical Analysis to Design Enhanced Customer Lifetime Value Based on
Customer Loyalty: Evidences from Iranian Banking Sector
Abstract: The more a marketing paradigm evolves; the more long-term relationship with
customers gains its importance. Also, the move towards a customer-centered approach to
marketing, coupled with the increasing availability of customer transaction data, has led to an
interest in understanding and estimating customer lifetime value (CLV). There are several
researches about the CLV formulas and calculating relations. But the effect of the CLV on
the other departments of the organization and especially the effect of the CLV on the key
parameters for organization’s profitability such as customer loyalty and satisfaction had little
attention. This research is about these shortcomings and covers another essential element for
organizational sustainable profitability, customer loyalty. The main purpose of this research
is to demonstrate the effect of customer loyalty on the customer lifetime value. For this
purpose one of the biggest parts of service sector in Iran is selected and the data from this
sector are gathered and analyzed. Banking sector is the biggest body of Iranian service sector
of economy. By means of a valid questionnaire, data were gathered from banking sector and
after analyzing the hypotheses, results show that the high customer loyalty strongly effects on
the enhanced customer lifetime value. In the final section of this paper, both applied and
theoretical recommendations will be provided.
The Impact of Dividend Announcement on Share Price Behavior in Ghana
ABSTRACT: The Efficient Market Hypothesis (EMH) provides that security prices reflect
all available information. However, despite dividend announcements made in 2005, three
companies selected for study performed badly on Ghana Stock Exchange (GSE). The
problem of the study was therefore to establish whether the GSE did not recognize companyspecific information in pricing shares. The purpose of the study was to ascertain whether
there was an instantaneous reaction of the companies’ share prices to dividend announcement
in order to provide the basis for confirming or dispelling the EMH conclusions as far as the
Ghana Stock Exchange was concerned. The event study methodology was used to achieve the
research objective. Additionally, the Wilcoxon Matched-Pair signed-Ranked Test was
employed in testing the null hypothesis. The major finding was that the GSE was not semistrong efficient resulting in the conclusion that the GSE must address itself to three forms of
efficiency – operational efficiency, allocation efficiency and pricing efficiency.
Social and Environmental Accounting in IRAN
ABSTRACT
The aim of this research is the study of the relationship between the elements of corporate
social and environmental reporting and their annual financial reporting quality in IRAN.
Since social and environmental accounting in Iran has not been used in an organized and
formal form, we intend to study the effect of this type of reporting factors, i.e. to disclose
human resource information, community involvements, and environmental issues on
accepted firms' annual reporting quality in stock exchange in Iran. Accordingly, three
hypotheses have been designed as the research hypotheses and a questionnaire was used to
collect data. 235audit firms of Iranian Association of Certified Public Accountants (IACPA)
were chosen as domain of study and the time scope has been in the spring and summer of
2012.One-sample T-test has been used to test hypotheses and provide a model for quality;
also we used Mann-Whitney- Wilcoxon test to confirm its results.
Bartlett test and principal component analyze have been used to provide quality model. The
results show that there is a positive and significant relationship between the disclosures of the
above three components and annual reporting quality. The amount of these variables impact
based on specified pattern is 0.915 for socialin volvements, 0.864 for environmental issues
and 0.818 for human resource information disclosure.
KEYWORDS: social and environmental accounting-Annual reporting- Reporting qualityIranian financial reporting.
The Survey of Effect of Corporate Accounting Social Responsibility Disclosure on
Corporate Financial: An Experimental Study
This study aims to consider the effects of identification, monitoring, measurement, and
reporting of social and economic activities related to the business enterprises on the society.
Community perceptions of companies’ business responsibilities have changed over the years.
The purpose of this study is to contribute to the current discussions about the effectiveness of
the corporate social responsibility (CSR) disclosure. Despite the widespread and growing
public concern and support for the corporate social performance, there is a need for further
investigations to achieve information about the correlation between social disclosure and
social performance, also between social performance and the social and economic
characteristics of a company, and the progress which is often slow and dispersed. Therefore,
the aim of this study is to evaluate the impact of the corporate social responsibility disclosure
on financial performance, type of the applied research and the study’s methods and materials
and hypothesize testing. This research identified the cause and effect between two variables.
The populations of the study are all chief financial officers of the companies listed in the
Stock Exchange of Tehran.
The Effects of Interruptions, Task Complexity, and Information Presentation
On Computer-Supported Decision-Making Performance
ABSTRACT
Interruptions are a frequent occurrence in the work life of most decision makers. This paper
investigated the influence of interruptions on different types of decision-making tasks and the
ability of information presentation formats, an aspect of information systems design, to
alleviate them. Results from the experimental study indicate that interruptions facilitate
performance on simple tasks, while inhibiting performance on more complex tasks.
Interruptions also influenced the relationship between information presentation format and
the type of task performed: spatial presentation formats were able to mitigate the effects of
interruptions while symbolic formats were not. The paper presents a broad conceptualization
of interruptions and interprets the ramifications of the experimental findings within this
conceptualization to develop a program for future research.
Management information systems and business decision making: review, analysis, and
recommendations
Abstract
The role of Management Information Systems is described and analyzed in light of its
capability for decision making. Decision making process and its impact on top level
management in a business organization is explained with an emphasis on automated decision
making. Limitations and challenges of MIS are discussed and a set of six recommendations
proposed for increasing the effectiveness of MIS in the decision making process.
Keywords: Information Systems, Transactional Processing Systems, TPS, Management
Information Systems, MIS, Expert Systems
Determinants of Dividend Payouts in Financial Sector of Pakistan
The rationale of this study is to conduct an empirical analysis of determinants of dividend
payouts of financial sector firms of Pakistan listed at Karachi Stock Exchange. The study has
applied a panel data methodology.
Different variables related to the firms, operations i.e. Profitability, Liquidity, Size, Cash
Flow, Asset tangibility and Earnings per share and their impact was analyzed on the dividend
payouts of the firm. Data was collected from 21 financial sector firms listed at Karachi Stock
Exchange. Results Show that cash flow have significant negative relationship and earnings
per share have a significant positive association with the dividend payout of the company,
while asset tangibility, profitability and size have in-significant negative relationship and
liquidity has insignificant positive relationship with dividend payouts.
KEY WORDS: dividend payouts, panel data methodology, liquidity.
The use of management accounting information, learning and organizational
performance
Abstract: This paper analyses the relationship between the use of management accounting
information by CEOs of German manufacturing companies, individual learning and
organizational performance. Several hypotheses concerning the relationship between the use
of management accounting information, individual learning and organizational performance
are developed. It is argued that different types of information use (decision-making,
monitoring and scanning) influence whether learning takes the form of mental model
maintenance and/or mental model building. It is further proposed that the use of management
accounting information has a positive impact on organizational performance both directly and
indirectly via the afore mentioned learning processes. The proposed relationships are tested
using structural equation modeling (LISREL). The data is derived from an empirical survey
among CEOs of German manufacturing companies (sample size of 449 responses). The
results indicate that different types of management accounting information use have different
effects on mental model maintenance and mental model building of CEOs as well as on
organizational performance.
A survey of factors influencing the choice of product costing systems in UK
organizations
Abstract
This paper reports on the findings of a postal questionnaire that examines the extent to which
potential contextual factors influence the characteristics of product costing systems. Prior
research has mostly used the adoption or non-adoption of ABC systems to capture the
characteristics of product costing systems. This research has generally been inconclusive and
has been unable to establish strong links between ABC adoption and those contextual factors
that have been identified in the literature that are conducive to the adoption of ABC systems.
Instead of using only the adoption or non-adoption of ABC systems as a measure of product
cost system design this research uses four different proxy measures of cost system
sophistication to capture the characteristics of the product costing systems.
This allows for a more robust test of the relations among the predictor variables and cost
system sophistication. Results indicate that higher levels of cost system sophistication are
positively associated with the importance of cost information, extent of use of other
innovative management accounting techniques, intensity of the competitive environment,
size, extent of the use of JIT/lean production techniques and the type of business sector. No
association was found between the level of cost system sophistication and cost structure,
product diversity and quality of information technology.
Keywords: Product costing; Activity-based costing; Direct costing; Absorption costing; Cost
system sophistication; Contingent factors; Cost pools; Cost drivers
The influence of Company Characteristics Factors to Activity Based Costing System
Implementation
Abstract: This study tried to determine the implementation of activity based costing system
rate and to examine the relationship between company characteristics such as industry type,
numbers of employees, numbers of products, and level of overhead and ABC
implementation. The findings revealed that ABC implementation in the context of Jordanian
Manufacturing Companies is approximately 19.5% measured according to the number of
implementers companies within Jordanian Manufacturing Companies. In order to test
hypotheses Logistic regression and chi-square used in the current study. The findings in this
study reveals that company sectors, size - number of employees, diversity -number of
product, and level of overhead cost don’t have significant influence on the implementation of
ABC among manufacturing shareholding firms in Jordan. Therefore hypotheses H1a, H1b,
H1c, H2, H3, and H4 are rejected.
Dividend Policy and Its Impact on Stock Price – A Study on Commercial Banks Listed
in Dhaka Stock Exchange
ABSTRACT
How do dividend policy decisions affect a firm’s stock price, is a widely researched topic in
the field of investments and finance but still it remains a mystery that whether dividend
policy affects the stock prices or not. There are those who suggest that dividend policy is
irrelevant because they argue a firm’s value should be determine by the basic earning power
and business risk of the firm, in which case value depends only on the income (cash)
produced, not on how the income is split between dividends and retained earnings and
opponents of this statement called dividend is irrelevance, that investors care only about the
total returns they receive, not whether they receive those returns in the form of dividends,
capital gains or both. The results of researches conducted in various stock markets are
different. There are many internal and external factors, which simultaneously affect stock
prices and it is almost impossible to segregate the effect of each so the variations remain.
This paper empirically estimates excess stock market returns for all the thirty banks listed in
Dhaka Stock Exchange for the period of 2007 to 2011. Attempts are made to examine, what
kind of relationship exists between dividend policy and stock market returns of private
commercial banks in Bangladesh, and to what degree the returns on stocks can be explained
by their respective dividend policy for the same period of time. Various theories related to
dividend policy are tested in various parts of the world with different results and findings.
Various other articles are reviewed, written in Bangladesh and abroad to see the significance
of dividend policy on the stock prices and to compare the results of this research with those
conducted earlier. Sample size is large i.e. all the listed commercial banks of Dhaka Stock
Exchange so the results are reliable and valid. Panel data approach is used to explain the
relationship between dividends and stock prices after controlling the variables like Earnings
per Share, Return on Equity, Retention Ratio have positive relation with Stock Prices and
significantly explain the variations in the market prices of shares, while the Dividend Yield
and Profit after Tax has negative, insignificant relation with stock prices. Overall results of
this study indicate that Dividend Policy has significant positive effect on Stock Prices.
“The Activity based costing and target costing as modern techniques in determination
of product cost”
ABSTRACT: Today, in the interrelated market place those enterprises are able to compete
that manage to pin hope in continuance of their own commercial activity. More simply, they
should manufacture some products with competitive advantages and introduce them to
market, that they possess high quality with a reasonable use life and at the same time to be
cost- effective for both producer and consumer in terms of price. In the past time, the system
of price- finding was traditional for production that was followed by many defects
accordingly, and it made this often difficult to achieve the aforesaid goal; however, at present
in order to achieve their long standing wish for durable activity and flourishing and acquiring
stable customers, enterprises have made useful efforts and through emergence of new
creativity and innovations, they have introduced modern techniques to identify final cost
accurately. In the present article, through conducting a review on two modern techniques of
Target Costing and Activity Based Costing, we have interpreted a brief history and analysis
about other aspects of these two techniques in a descriptive way.
Keywords: Traditional costing, Target costing, Activity Based Costing (ABC)
Effect of Macroeconomic Variables on Stock Market Returns Ghana: An Analysis
Using Arbitrage Pricing Model
ABSTRACT
This work attempts to use Arbitrage Pricing Theory framework to explain the variations on
returns on the Ghana Stock Exchange. Ordinary Least Squares Regression and co integration
analysis was employed to model both the short- and long-run relationships. In addition,
granger causality tests were used to examine the causality between the GSE All-Share index
and seven macroeconomic variables namely money supply, rate of inflation, Treasury bill
rate, exchange rate, world crude oil prices, world cocoa prices and gold prices. Results from
the Ordinary Least Squares regression analysis showed that four out of the seven
macroeconomic variables possess statistically significant power for stock returns on the
Ghana Stock Exchange: inflation rate, the Treasury bill rate, and money supply and world
crude oil prices. On the other hand, the Foreign exchange rate, world cocoa prices and world
gold prices do not appear to have a statistically significant effect on stock prices in Ghana.
However, while the Engle and Granger co integration test results signal the existence of an
overall long-run relationship between stock returns and the observed variables on the GSE,
the same could not be said of the long-run relationship between individual macroeconomic
variables and stock returns. On the contrary, the Johansen and Juselius co integration test
shows the existence of at least two co integrating relationships between stock returns and the
macroeconomic variables. Additionally, the Engle and Granger causality test points to unidirectional causality between stock returns and the foreign exchange rate and the money
supply. In the light of the above findings, Industry and academia should partner each other to
conduct research which focuses on different aspects of the market and the findings should be
made available to industry and the government should set realistic macroeconomic targets to
limit chronic deviations which normally render fundamental analysis almost impossible in
order to improve public confidence in government decisions.
‘‘New JIT’’: A new management technology principle at Toyota
Abstract
A future successful global marketer must develop an excellent quality management system
that impresses users and continuously provides excellent, quality products in a timely manner
through corporate management. The author proposes New JIT, a new management
technology principle for manufacturing in the 21st century. New JIT contains hardware and
software systems as next-generation technical principles for transforming management
technology into the management strategy. The hardware system consists of the Toyota
Marketing System (TMS), Toyota Development System (TDS) and Toyota Production
System (TPS). These are the three core elements required for establishing new management
technologies in the marketing, engineering and production divisions. To improve work
process, quality of all divisions concerned with development, production and sales, the author
proposes Toyota Total Quality Management utilizing Science SQC (TQM-S) as the software
system. The author believes that New JIT’s effectiveness has been demonstrated as described
herein based on the author’s experience at Toyota.
Looking beyond the obvious: Unraveling the Toyota production system
Abstract: In contrast to prior research on the Toyota Production System (TPS) that has tended
to focus on the micro issues or structural issues, we take an integrated approach of TPS to
include the rules or principles underlying TPS. Consistent with recent work by Spear and
Bowen (1999) and Spear (2004), we suggest that the systematic method in combination with
lean practices typify the TPS. We expand upon this body of work by empirically examining
our suggestions on a large sample data comprising manufacturing plants in several industries.
Several main effects of TPS practices on performance were found. Similarly, TPS rules were
found to be positively related to manufacturing performance. Finally, we found a positive
interaction effect between the TPS practice of preventive maintenance and the TPS rule of
decentralized decision making on all performance measures in this study, i.e. manufacturing
cycle time, quality, cost, and delivery speed. Implications for theory building and for
practitioners are offered.
An integrated approach for green design: Life-cycle, fuzzy AHP and environmental
management accounting
The growing awareness of environmental issues has made the design of eco-friendly products
a critical task for modern businesses. Almost all the costs and the environmental performance
of a product over its life-cycle are determined in its design and development phase. The
selection of alternative green designs is, however, a major challenge in today's competitive
environment. The increasing pressure on time-to-market conflicts with the analytical
approach typically required when using conventional environmental management accounting
(EMA) tools such as Life-Cycle Assessment (LCA) and Life-Cycle Costing (LCC). This
paper introduces a comprehensive method that integrates the LCA and EMA concepts, fuzzy
logic and Analytical Hierarchical Process (AHP), to measure the environmental and
organizational performance of different designs. We propose a screening model to help
designers reduce their reliance on LCA and present a case study to demonstrate that this
approach provides a systematic method of evaluating alternative designs and identifying
product design improvement options. The measurement approach presented in this research
can help companies reduce development lead time by screening out undesirable design
options. More importantly, the approach can be modeled with the mere use of an Excel
spreadsheet, which means limited resources are needed to implement the proposed method.
An investigation of the relationship between productivity indices and systematic risk
based on the capital asset pricing model (among accepted companies in Tehran stock
market)
Systematic risk (beta) is one of the most effective factors in predicting the appropriate
required rate of returns of portfolios. By understanding the systematic risk of usual portfolios
of various companies, investors will be able to consider financial investment more
confidentially. The aim of this study was to examine the relationship between productivity
indices (operating leverage, financial leverage, combined leverage) as independent variables
and systematic risk (Beta) as dependent variables. To do so, 112 companies accepted in
Tehran Stock Market were selected based on screening (systematic deletion) in a five-yearperiod, 2004 to 2008. The required data were gathered from basic financial statements,
committee reports, and other available documents in Tehran Stock Market. Regression and
Pearson correlation were applied to analyze the data. The results of the study revealed that
there was no significant relationship between productivity indices and systematic risk. Some
suggestions are provided regarding the topic of the research.
INTRODUCTION
Research on the financial fields in Iran is in its initial stages. Economic conditions and
traditional characteristics of investors and managers of business units have not yet provided
desirable conditions to address serious and rigorous research; especially that stock price is
shrouded in mystery.
The evidence suggests that investors do not use quantitative methods to determine the value
of shares. Assumptions are subjective and data are not based on empirical research. To
improve the conditions of expanding capital market activities and to prevent failures and
measures taken to attract public participation in investment, mental imagination must be
replaced by scientific results and how to use known methods should be taught to both
managers and investors to select the proper methods and be able to maintain their presence in
the capital markets and through which the wheels of economic activities get rolling on.
Common stock includes tools that, due to its lack of future returns, will make investors
doubtful. Thus, if desirable conditions are provided to both investors and corporate managers
to get necessary knowledge about capital market, and make them familiar with all the factors
affecting investment, consequently, they will be assisted in decision-making and this, in turn,
will be an influential factor in capital market.
The returns that an investor acquires is unpredictable, so he is forced to bear the risk, on the
other hand, non-systematic risk in an intellectual investment can be eliminated or reduced
with variation in investments. In fact, the rate of risk and returns should be considered in
investments.
Analyze the impact of financial variables on the market risk of Tehran Stock Exchange
companies
Abstract
Given the importance of forecasts in investment decisions, And given that both risk and
return on investment are important factors influencing the process, this study measures the
financial impact on risk of companies listed on stock market. Thus in order to try to increase
the knowledge of investors in the analysis, support or disapprove decisions or making new
decisions efficiently. Financial variables studied in this research include ROI, gross profit
margins and sales volumes. In order to test hypotheses concerning the relationship between
Beta and financial variables, information about 106 companies of Tehran Stock Exchange
from 84 to 88 years in the form of a regression model has been analyzed. The results suggest
that there is a relationship between ROI and market risk, sales volume and market risk. Beta
can be obtained and about 40 percent of the beta variation can be explained by the model.
Keywords: Tehran Stock Exchange, financial variables, systematic risk, ROI and gross profit
margin
Introduction
Investment is necessary in the process of growth and economic development in counties.
Some Factors that affect in selecting investments, is the investor's risk and return on
investment. Investors are trying to invest their financial resources to somewhere that the
highest efficiency and lowest risk. Therefore, companies should focus not only on the benefit
but also the risk must be considered as a limiting factor for maximum efficiency. Unlike
return, risk is a mental conception and non-quantitative. Therefore, economic and financial
experts' effort is more on to identify and measure risk. According to modern portfolio theory,
risk is divided into two parts: systematic risk and non-systematic risk. On the other hand, the
capital asset pricing model states that non-systematic risk can be eliminated through
diversification, and can be overlooked, and only systematic risk should be considered in the
decision making. But sometimes due to not enough data it is difficult for investors to
calculate the risk. On the other hand, the accounting systems provide information's that is
possible to access them easily and are highly reliable. Since accounting information reflects
financial and operational decisions in the company, it is believed that with the use of
accounting and financial information we can extract the company's systematic risk. And the
financial and accounting information to be used as a substitute for systematic risk (Belkaoui,
1978). Given that in the accounting literature quantifying risk is one of the benefits of
accounting information from the view of investors (Namazi and Khajavi, 2004), experts And
whom involved in capital markets, always On financial issues, have resorted numerous ways,
such as market model, capital asset pricing model and the model Index to assess risk and All
models have the main point is to rely on market prices. And this implicates the necessity of
using stock companies in this study. Some studies have shown that accounting information is
effective for changes in the stock market and corporate risk, it means that what The
correlation between the, accounting and investment risk variables is more, prices of securities
and The risk of the stocks in capital market reacts more quickly to new information And the
market will move towards more efficient (Namazi and Zare, 2003). In this study, it is trying
to use a method similar but with different variables, investigate the effect of financial
variables such as ROI, Gross profit margin and sales volume on market risk for companies
listed on stock exchange.
Cash flow risk, systematic earnings revisions, and the cross-section of stock returns
Abstract: The returns of stocks are partially driven by changes in their expected cash flow.
Using revisions in analyst earnings forecasts, we construct an analyst earnings beta that
measures the covariance between the cash flow innovations of an asset and those of the
market. A higher analyst earnings beta implies greater sensitivity to market wide revisions in
expected cash flow, and therefore higher systematic risk. Our analyst earnings beta captures
exposure to macroeconomic fluctuations and has a positive risk premium that provides a
partial explanation for the value premium, size premium, and long-term return reversals.
From 1984 to 2005, 55.1% of the return variation across book-to-market, size, and long-term
return reversal portfolios is captured by their analyst earnings betas.
The Impact of Information Risk on the Systematic Risk
Abstract
Systematic risk is among the most significant topics and has been Longley considered by the
researchers of the capital market. The final goal of the most investors, stakeholders and
managers achieve the highest return. They confront risk and it is necessary to equilibrate the
risk and return. Accordingly, it seems essential to investigate the risk and the related effective
factors. This study seeks to find the effect of informative risk on the systematic one. Fifty two
listed firms on Tehran Stock Exchange for a five year period including 2006-2010 were
selected as the sample in order to test the hypotheses. Multivariate regression model has been
also applied to analyze the required data. The findings reveal that there is a positive
significant relationship between informative risk indicator (income smoothing) and
systematic risk.
Keywords: Informative risk, Income smoothing, Earnings quality, Systematic risk, Fama and
French three-factor model.
Introduction
The investors, managers and other users should access the qualified information. The
financial statements are the final products of the accounting system and financial reporting
and these statements aim at providing summarized and classified information about the
financial position, financial performance and financial flexibility of the business that is useful
for a wide range of users in making economic decisions. Based on the theoretical concepts of
the financial reporting, the useful information should have specific quality characteristics.
The main qualified characteristics relate to the information content, relevancy and reliability
(Bulu et al, 2011).
Reported earnings are one of the most important measures of decision making that has been
considered by a wide range of the users including shareholders, investors and stock brokers.
Calculating the economic income is impacted by the estimated accounting methods and the
business managers hold the responsibility to prepare the financial statements. The managers
might manipulate earnings for different reasons. On the other hand, the investors pay special
attention to the main factors of decision making (Ghorbani et al, 2010).
The investors might select different and various investment choices based on the
characteristics of risk and return. The investment in the financial properties has been always
accompanied by the risk and uncertainty and threatens the return and capital. Therefore, it
seems necessary to consider risk in the investments. Clearly, the investors try to maximize
their wealth through reducing cost of capital and investment risks. One of the risks that the
investors are confronted with is the systematic risk. It seems essential to take into account the
systematic risk and the effective factors.
The present study seeks to explain the relationship between information risk through income
smoothing and systematic risk.
Investigate the Relationship between Financial Leverage and Operating Leverage with
Accruals
ABSTRACT
The aim of this study is to examine the relationship between financial leverage, operating and
accruals. For this purpose Statistical population studied had companies listed in Tehran Stock
Exchange. The number of samples that are 558 firm-year observations in the period between
2005 -2013. The findings show that positive relationship between accruals and degree of
operating leverage is meaningful. There is an inverse relationship between discretionary
accruals and financial leverage. And between variables of firm size, return on assets and
current ratio have a positive relationship with financial and operational leverage.
KEYWORD: Accruals, Financial Leverage, Operating Leverage, Tehran Stock Exchange
INTRODUCTION
The most important information available to investors is that they react to changes in earnings
reported by companies. Investors studied the reported earnings and earnings components, ie
predict accruals and operating cash flow, return on equity firm’s future [12]. Earnings due
accounting adjustments for accruals, and operating cash flows are different [17]. In order to
obtain the competitive advantage, corporations use their resources to improve their relative
status compared to competitors and improving the corporation status causes better
opportunities in the future. Market share and its growth have been identified as important
indicators of corporate performance in the industrial organization studies as well as the
positive relationship between market share and economic profit has been proved. In the
structure, behavior, performance paradigm, two competitive approaches are presented to
explain this relationship. The first approach is the conspiracy theory based on which they
determine the product prices above the whole competition market price level by
concentration of market share among a few numbers of dominant companies and therefore
achieve a higher normal profit. Based on the second approach which is the efficiency
perspective, gaining the market share is due to the increased efficiency of the company and
innovation and economies caused by its scale bring economy benefits to the company.
Regardless of these two approaches, if desired target of the companies is to gain more market
share and it is expected that companies which have larger market share will have increased
profitability and growth opportunities in the future, then changes in market share indicate the
future performance and growth opportunities [20]. The aim of this study, investigate the
relationship between financial leverage, operating leverage and Accruals .The study is
structured in this manner. First, the importance of the topic is presented in the introduction.
The principles and literature, and internal and external history are given respectively in the
second and third part. The forth section discusses the assumptions and methods and models
of testing the assumptions. Conclusions are presented in the fifth section.
A survey on the Relationship between Systematic Risk, Earning Per share and
Dividend per share and Cost of Capital in Accepted Companies in Securities
Exchange of Tehran
ABSTRACT
Cost of capital is considered as an essential factor in making decisions on investment, capital
budgeting, managing of working capital, establishment of optimal financial structure, helping
with performance measurement and determination of the firm value through helping in
discounting cash flows. The present research aims at Survey of relationship between
systematic risk, earnings per share(EPS) and dividend per share(DPS) as a in depended
variables and cost of capital as a depended variable in accepted companies in securities
exchange of Tehran in period of 2005-2010. Total of accepted companies in the securities
exchange of Tehran have been seen as a statistic society. In order to conducting this research,
114 companies, random and with stipulate dimities, selected as research samples. In this
research for estimation cost of equity capital we were used of Gordon growth model. It also
for examination hypotheses of research we were used of partial correlation coefficient, step
wise regression’s and curve estimation regression test. The results indicate there were not
significant relationship between systematic risk, earning per share and dividend per share
with cost of capital in total time’s dominion of the study. the yearly results show, there were
significant relationship between systematic risk and cost of capital in 2007 from nonlinear
aspect, between earning per share and cost of capital in 2007&2009 from linear aspect and in
2005,2006&2010,from nonlinear aspect and between dividend per share and cost of capital in
2007,2008&2009 from linear and nonlinear aspects.
Introduction
The cost of capital and its components (such as equity) are among the most important
numbers in financial economics. An accurate measure of capital cost is necessary for
financial managers and investors to make optimal investment and capital budgeting decisions.
A vast literature in finance deals with the estimation of the cost/equity and the equity risk
premium. (Mohsni, 2008, p70)Systematic risk or beta factor indicates that the percentage of
price changes of one share is what percentage of shares’ total price indication changes.
Shareholders are considered the owners of the firm, and therefore they prefer to invest in
company which have higher output rate from firms having higher cost of capital and
systematic risk. It can be concluded that the firms which have lower cost of capital, can
provide investors’ output rate more easily (karimzadeh, 2004, p.p1-10). The main reason for
considering earning per share (EPS) (not total earnings of the firm) is related to the chief aim
of the firm which is maximizing shareholder's’ wealth. It should be taken for granted that the
earning paid to shareholders by the firm (DPS) has a close relationship with the earning that
company gains. In calculating of the proportion of paid dividend, the valued belonged to EPS
is used(Pay noo,2001,pp48-49).while a company take action due to announcing the earning
regularly, the investors consider this stability as the continuation of regular operating process.
And a decrease in announced earning shares can be a sign of a potential problem in the firm
for investors. For this reason, the firm managers attempt to apply a stable payment policy and
if the firm earning decreases, they should increase the the dividend rate or even keep it in the
same level as before (Setayesh, 2008, p.p 2-3) Modern corporate finance theory is founded on
the proposition that financial capital is supplied to firms by investors who have an
expectation of return, and reciprocally, such expectation represents the firm's cost of financial
capital (SinYan, 2008, p6).
PREDICTIVE POWER OF FINANCIAL RATIOS WITH REGARD TO THE
TURKISH BANKING INDUSTRY: AN EMPIRICAL STUDY ON THE STOCK
MARKET INDEX
ABSTRACT
In this study, it is examined whether changes in the stock market index can be explained by
the change in financial ratios. Financial statements of 11 conventional and 2 participation
banks for a total of 13 banks (representing the essential part of the Turkish Banking Sector
and constituting the BIST XBANK Stock Index) announced on a quarterly basis from 2002 to
2013 were extracted from the Public Disclosure Platform website. The contemporaneous
financial statements were merged and by using this data, consolidated financial ratios were
obtained. Based on empirical evidence, while an increase in debt-to- equity ratio affects the
BIST XBANK Index negatively, shareholders' equity to total assets ratio has a positive
impact on the growth of the Index. In addition, it is verified that shareholders' equity to total
assets ratio and provisions/non-performing loans ratio have a causal relationship with the
BIST XBANK Index.
INTRODUCTION
Beneficiaries of financial statements use financial ratios to a large extent in order to comment
on the current financial situation and to make estimation on the future financial position of
firms. Those who benefit from the financial statements can be basically classified into four
categories which are company managers, creditors, shareholders (investors) and the
government. These four use financial ratios for different purposes: company executives to
measure the company's financial performance, creditors to see the capability of debt payment,
the government to assess whether the firms contribute to economic efficiency and
consequently shareholders to determine whether their investments are profitable or not. When
investors decide to buy securities, they take macroeconomic or firm-specific variables into
account. Changes in macroeconomic variables more or less affect the stock market in the
same way. However the impact of macroeconomic variables on each security will not be
alike. In other words, the stock market adapts to business cycle fluctuations in the economy.
However, management risk and financial risk as the firm-specific factors or non-systematic
risks vary depending on the firm’s structure and the aforementioned risks will be minimized
by effective management. In this respect, the fundamental analysis which is used frequently
to measure financial performance and risk has a significant influence on the formation of
shareholder value. Brokerage firms and investment banks related to advisory issue benefit
widely from ratio analysis. The study is organized as follows. In the second part of the paper,
the literature examining the impact of financial information and ratios on stock returns is
summarized. In the third part, detailed information about the data is given. Methodology is
presented in the fourth part. In the fifth section, to determine if consolidated financial ratios
of banks involved in the XBANK index has a material impact on the XBANK Stock Index,
an econometric analysis is performed and VECM is formed. Finally in the last section, the
findings obtained as a result of econometric analysis are assessed.
The Relationship between Operational Financial Ratios and Firm’s Abnormal Stock
Returns
Abstract: The investment in stock market and other stocks issued by the firms require
sufficient knowledge and understanding of the financial reports and information of the
business firms. This study aims to investigate the effects of three types of financial ratios, i.e.,
profitability/liquidity, continuity and efficiency of business firms over the investors’
abnormal stock returns. To achieve the aim of the study, the ratios were categorized into two
group’s namely fundamental ratios and risk-proxy ratios. The financial ratios make a
relationship between various economic variables of a firm and make it possible to compare
financial information of various firms. The financial ratios also make it easier to evaluate the
firm’s performance through examining the relationship between the variables of the financial
statements. The results of this study showed that there is a significant relationship between
the most fundamental accounting variables, i.e., return on assets, operational cash flow,
changes in return on assets, changes in net profit margin and total asset turnover. The
existence of this relationship shows the high dependence of abnormal stock returns on its
intrinsic fundamental variables. However, there was not any relationship the liquidity ratio
and stock returns. Moreover, there was not any significant relationship between the majority
of risk proxy variables i.e., the ratio of accruals, operating leverage and stock issuance
indicating the independence of abnormal stock returns from risk proxy variables.
Keywords: Abnormal stock returns, activity ratios, operational financial ratios, profitability,
performance ratios
PREDICTION OF STOCK RETURNS USING FINANCIAL RATIOS BASED ON
HISTORICAL COST, COMPARED WITH ADJUSTED PRICES (ACCOUNTING
FOR INFLATION) WITH NEURAL NETWORK APPROACH
ABSTRACT: The purpose of this research is to predict stock returns and the purpose of the
least squares regression and neural network approach is used. The potential financial ratios
based on the historical cost and financial ratios based on Adjusted Cost predict stock returns
are investigated. Independent variables and the dependent variable in this study and financial
ratios and stock returns is for these purpose financial ratios for listed companies in Tehran
Stock Exchange for the period 2007 to 2012 were collected. The results showed that the
predicted stock returns based on financial ratios financial ratios adjusted based on the general
price index and the use of neural networks better performance in comparison with the
historical financial ratios and least squares regression approach in predicting stock returns has
the variables are adjusted based on the general price index, variables, net profit margin, return
on assets, current ratio, asset turnover ratio and fixed assets turnover ratio, respectively, are of
the greatest importance and impact.
Keywords: Stock Returns, Financial Ratios, Accounting for Inflation, an Artificial Neural
Network
INTRODUCTION
Due to the increasing importance of capital markets in small capitalization equip the
individual to productive activities, identify variables influencing the behavior of investors and
the market price of the stock return is gained (Babaeian and Arab, 2000). It is clear that
investing in the stock market is an important part of the economy no doubt, the greatest
amount of capital through stock markets around the world will exchange and the national
economy is heavily influenced by the performance of the stock market to professional
investors and to the public as an investment tool available. Stock markets and other macroeconomic parameters and many other variables affected, several of the factors affecting
capital markets and their unknown causes uncertainty on investment (Khaloozadeh, 2003).
Obviously this is undesirable feature of uncertainty in decision making and also for investors
in the stock market this property is inevitable (Hendrickson, 1992) the overall objective of the
research hypothesis and research, is to reduce uncertainty, investors are looking for ways to
better predict stock returns to get the maximum performance from your investment.
The relationship between stock prices and debt ratio and Capital flows with assets
Abstract
Some researchers are emphasized on the role of mind the accruals measure in lower of sustainability.
Some other are attribute that to economic indicators such as the growth of the company. Discretionary
and non-discretionary components of accruals information, including information that has been
extracted from the financial statements and this information along with the stock prices of the major
factors for achieving the goal analysis followed by investors. In this study, by using systematic
elimination, the required data of 144 listed companies in Tehran Stock Exchange during the period
2006 to 2011 were reviewed. Also were used the modified Jones model to the calculation
discretionary and non-discretionary accruals. The results of hypothesis testing on the combined data
showed that there is significant and direct relationship between the ratio of inventories to net sales and
stock prices. In addition, the results of hypothesis testing on the combined data showed significant and
direct relationship between the ratio of the sum debt to of total assets and stock prices.
Keywords: The ratio of inventories to net sales, the ratio of the sum debt to of total assets, stock
prices
Introduction
Primary aim in financial reporting is to provide information about the performance firms provided by
earning and its components. In other words, Users of accounting information In order to evaluate and
forecast cash flows and future earnings of business entity and subsequent economic decisions rely
more than any other information to data arising of earning or its components. Earning quality on
financial reporting could affect at investor confidence in financial markets. Investors are looking for
opportunities to invest additional resources in the most efficient capital markets and one of the main
factors that every investor in his decision to give a special attention is "stock price". The cash and
accrual components of earnings can be used as tools to predict future benefits by investors that in this
regard, the accrual component of earnings for manipulated can be benefit special interest. Moreover,
separate accruals into discretionary and non-discretionary components could be provided more
appropriate context for belter analysis of accruals and subsequent more earnings quality analysis.
Investors to make optimal decisions at the purchase, possession or sale of shares in addition to earning
and its components pay attention to the other information contained in the financial statements, which
can be effective to the stock price and import them to their decisions models, information obtained
through the analysis of financial ratios that are underlying the financial statements and can be
considered very useful tools in the evaluation of existing and projected future state business .
Literature research
Identify of components earning behaviors in recent years is form an important part of studies of
market efficiency has started with Sloans research. (1996) .Studies at Identify of components earning
behaviors show that Profits of nonfinancial items (accruals) has different behavior than financial items
(cash flows) about earning of Sustainability. That if investors and other users of financial reports to
identify the differences in the behavior of the interest component will have, the data related once
provided will be absorbed by the market (Sloan, 1996).
Pelk and Sapinza (2012) in their study who were seeking answers to the question whether the
incorrect pricing of the stock market are affected investment decisions or not? They respond to the
above questions were discretionary accruals as a proxy for the incorrect pricing of stock market. The
results of this study indicate that discretionary accruals and capital expenditures are affected at future
stock returns.
David at el (2012) in a study to answer this question whether cash flows and accruals of the company
can be expanded on the stock market Was to investigate the relation between accruals, cash flows and
the cumulative stock returns the results showed retained accruals are a positive predictive power of
described above and cash flows are a negative predictor for the cumulative stock returns.
Exploring the relationship between financial ratios and created shareholders value: A
life cycle perspective
The aim of this research is to discover relationship between financial ratios and created
shareholders value, at the different life cycle stages. Therefore, we select dividend pay-out,
sale growth, capital expenditure, and firm age as the life cycle descriptors, which are suggested by Anthony and Ramesh (1992) (our sample firms were gathered from the Tehran Stock
Exchange over the period 2005 to 2011), thus to identify firms according three life cycle
stages, namely growth, maturity and decline, and investigated the impact of corporate life
cycle on relationship between financial ratios and created shareholder value. For testing the
hypotheses pooled least squares model was used. The results showed that although there is
meaningful relation between financial ratios and created shareholders value, but corporate life
cycle of different stages can affect the relationship between financial ratios and created
shareholder value.
Introduction
The shareholder value concept implies that the ultimate measure of a company’s success is
to enrich its shareholders. The term in this sense introduced by Alfred Rappaport in 1986
refers to a concept of planned management actions causing returns to shareholders to
outperform certain benchmarks such as the cost of capital. For a publicly traded company,
SHV is the part of its capitalization that is equity as opposed to long-term debt (Rappaport,
1998). Measuring shareholder value creation has been the subject of discussion all around the
world. It has become crucial since companies are increasingly committed to creating
shareholders value (Salehi et al, 2011). On the other hand, Whit the increasing global
competition, companies are focusing their efforts on creating shareholder value in order to
survive the intense competition. In view of this, it is becoming important for companies to
measure the value they create for their shareholders. Keeping track of the value created yearon- year enables companies to evaluate past decisions and make decisions that will improve
shareholder value (Viswandham & Poornima, 2005). Managers must focus on building
shareholders value, because, shareholders as owners of business unions try to increase their
wealth, and increasing the wealth causes the assessment of business union favorably, which is
very important for business owners. On the other hand, the large challenge for management is
proper integration value, given to different profit owners in organization. For this,
shareholders search a norm which indicates company's value and rate of created value. And,
finding an index is necessary by which company’s performance is logically explored for
assessment of manager’s performance and measurement of value give to shareholders (Salehi
et al, 2011). While, there is a large literature that supports the shareholder value approach,
there is often confusion as to how to create value for shareholders and, especially, how
shareholder value should be measured. The identification of the best measure for defining
shareholder value has become a critical issue (Fiordelisi et al., 2010). However, companies
are choosing to employ a system of measuring shareholder value for many reasons. First,
value is the best metric of performance as it the only measure that is comprehensive and
hence is useful for decision –making. By increasing shareholder value, companies can
maximize the value for other stakeholders (customers, laboure and government (through
taxes paid) and suppliers of capital).
Review of the prediction power of Altman and Ohlson Models in predicting bankruptcy
of Listed Companies in Tehran Stock Exchange – Iran
ABSTRACT
Current collapses of big companies and the worse fluctuations of the financial markets have
evoked the awareness of the stakeholders and mangers to utilize suitable tools to predict the
financial distress of companies. One of such tools is the application of financial ratios as
independent variables and developing models to predict bankruptcy issue. The objective of
this study is first to test the prediction power of original Altman (1983) and Ohlson (1980)
models on the dataset of Iranian listed companies and secondly by applying Multiple
Discriminate Analysis (i.e. MDA) and Logit Analysis statistical techniques on the same
dataset, develop a suitable prediction model for bankruptcy of listed companies in the
economic environment of Iran. It was Finally concluded that both original Ohlson bankruptcy
prediction model in 1980 without any modification of multipliers and coefficients and
Logistic regression technique showed better prediction results than original Atman model in
1983 or Discriminate analysis technique.
Key words: bankruptcy, financial ratio, bankruptcy prediction models, multiple discriminate
analysis, logistic regression, Altman Model, Ohlson Model
IMPACT OF TQM IMPLEMENTATION ON PRODUCTIVITY AND QUALITY - A
STUDY AT GENARAL MOTORS
ABSTRACT TQM focuses on teamwork, increasing customer satisfaction, and lowering
costs. Organizations implement TQM by encouraging managers and employees to collaborate
across functions and departments, as well as with customers and suppliers, to identify areas
for improvement. The objective of the study is to determine whether the implementation of
TQM leads to higher productivity and quality. The study was carried out at General Motors
by collecting the primary data from the managers through structured questionnaire. The data
was analyzed by descriptive analysis and ANOVAs technique the result revealed that there is
a significant relationship between TQM implementation and high productivity and quality.
INTRODUCTION Total Quality Management is a method by which management and
employees can become involved in the continuous improvement of the production of goods
and services. It is a combination of quality and management tools aimed at increasing
business and reducing losses due to wasteful practices. TQM views an organization as a
collection of processes. It maintains that organizations must strive to continuously improve
these processes by incorporating the knowledge and experiences of workers. The simple
objective of TQM is “Do the right things, right the first time, every time.” TQM is infinitely
variable and adaptable. Although originally applied to manufacturing operations, and for a
number of years only used in that area, TQM is now becoming recognized as a generic
management tool, just as applicable in service and public sector organizations.
LITERATURE REVIEW: In urbanized countries such as UK, USA and JAPAN, total
quality management has been a current issue for many years in all business sectors, mainly
the manufacturing industry. However, in a developing country like India, even though it has
successfully developed substantial manufacturing industry in the last two decades, TQM has
made little impact. In manufacturing systems, quality management focuses primarily on
technical issues such as equipment reliability, measurement of defects and statistical quality
control techniques (process control). But quality management has penetrated into other areas
such as product design, research and development, human resources practices (employee
empowerment) team work, customer relations and organizational culture. Quality
management pervades through the entire organization. Idris et al. (1996) conducted a survey
of Malaysian manufacturing companies already registered to ISO 9000, with a view to
examining their status as regards TQM implementation. Less than a third of the responding
companies claimed to have RQM, but there was a strong minority claiming to have made
substantial progress towards total quality practices. Theses authors also describes the
Malaysian SIRIM model of total quality training for a company, which is multi-step process
involving the adoption of such practices as a quality improvement process, Quality Control
Circles(QCC) and TPM. Samson and Terziovski (1999) used a larger database of 1,024
usable responses from Australian and New Zealand manufacturing organizations to examine
the relationships between TQM practices, individually and collectively, and firm
performance, the study showed that the relationship between TQM practice and
organizational performance is significantly in a cross-sectional sense. Based on 698 usable
responses from Australian and New Zealand manufacturing organizations, Dow et al. (1999)
employed confirmatory factor analysis (CFA) to identifying nine quality practices. Nine
quality practices include workforce commitment, shared vision, customer focus, and use of
teams, personnel training, co-operative supplier relations, use of benchmarking, advances
manufacturing systems, and use of just-in-time principles.
Salaheldin Ismail Salaheldin (2003) conducted a study on implementation of TQM strategy in
Egyptian manufacturing firms. The study aims to explore the critical resisting and driving
forces that inhibit or promote the implementation of total quality management (TQM)
strategy in Egypt, in an attempt to determine whether TQM can be implemented effectively
in this developing country, a force-field analysis was used for identifying the salient factors
affecting TQM implementation in Egypt. The findings indicated that forces that promote or
prohibit TQM implementation obtained in one developing country might be generalizable to
another less developed country. The investigation identified some driving forces that promote
the implementation of TQM strategy by the Egyptian manufacturing firms. G. Karuppusami
and R. Gandhinathan, (2006) identified critical success factors of total quality management
by using pareto analysis. The authors discussed even through there has been a large number
of articles published related to TQM in the last few decades, only a very few articles focused
on documenting the critical success factors (CSF’s) of TQM using statistical methods. An
examination of 37 such TQM empirical studies resulted in compilation of 56 CSFs.