Business Finance

Quantitative analysis of information contained in a company’s financial statements. Ratio analysis is based on line items in financial statements like the balance sheet, income statement and cash flow statement; the ratios of one item – or a combination of items - to another item or combination are then calculated. Ratio analysis is used to evaluate various aspects of a company’s operating and financial performance such as its efficiency, liquidity, profitability and solvency. The trend of these ratios over time is studied to check whether they are improving or deteriorating. Ratios are also compared across different companies in the same sector to see how they stack up, and to get an idea of comparative valuations. Ratio analysis is a cornerstone of fundamental analysis

In this study we use the monthly excess holding period yields (EHPY), and their volatility for five government bond indices markets, in order to test the popular expectations theory of the term structure and to assess whether there are patterns in risk premia, which are common across these markets. For this reason, a GARCH-M model is used. The empirical results derived indicate that in most cases the Expectation Hypothesis is rejected and short medium-term government bond yields display serial correlation and co movement in the majority of the countries. Additionally, the term premia at the long end of the maturity structure are time varying in the USA, the UK and Canada. The risk factor is statistically significant as an explanatory variable for risk premia, only for 7 years maturity bonds in the USA and the UK.

Abstract:  We examine the valuation role of customer acquisition cost, retention and usage in the wireless industry during the period 1997–2004. We develop and test a model that links customer acquisition cost, customer retention and call usage to future financial performance and valuation. In doing so, we control for the role of traditional accounting measures as predictors of firm performance. Although the wireless industry maintains a rapid pace of technological and commercial changes, fundamental accounting numbers are found to be value relevant. We provide new evidence that customer acquisition cost is likely a firm value driver. Specifically, we show that this cost is positively associated with customer retention, future profits and current market values. However, customer acquisition cost is not associated with future revenues, suggesting that successful investment in customer acquisition is capable of saving future expenses and hence of improving profitability. There does not seem to be a direct association between customer retention and usage. Nevertheless, we document a positive relation between retention and future revenues, as well as a positive association between usage and future profits. Collectively, these results suggest that retention and usage play an important mediating role linking customer acquisition with benefit generation. Consistent with this, we find some evidence that customer retention and usage enhance market values.

Purpose The aim of the research is to analyze sustainability in energy companies in terms of financial innovation, innovation strategy and organizational innovation. Design/methodology/approach The analysis of this research was done by using the Mplus 7 package program, and the research model was tested using the existing latent variables and their expressions. Data from 298 administrative staff (white collar) working in companies operating in the energy sector were analyzed. Findings Both independent and mediation effects of financial innovation and innovation strategy positively affect sustainability performance. Therefore, it can be concluded that in order for sustainability performance to be positive, importance should be given to financial innovation, innovation strategy and organizational innovation activities. Research limitations/implications As the data were collected from energy companies in this research, it is not correct to generalize the evaluations. Therefore, in term...

The emergence of entrepreneurial finance as a research field is the result of a double interest from both entrepreneurship researchers and financiers. Indeed, researchers focus on the financial fact existing in all entrepreneurial projects, while financiers consider that entrepreneurial situations have specific features that we should lean on. Our article is a presentation of the basic mechanisms of the entrepreneurial Finance, and its relationship with the entrepreneurial venture in its early stages; it will also focus on the theoretical aspect on both the Agency theory and its developments, as well as on the emerging organization that takes into account the evolution of the Startups reality. Finally, we will make a presentation of the different modes of financing Startups. Our report reveals that little work was spent on funding the very beginnings of the entrepreneurial venture. To this end, the Finance business tends to stand out from the corporate finance by different concepts ...

ABSTRACT
The general aim of this study is to investigate the effect of exchange rate on financial performance of small and middle-sized companies in Mogadishu.Specifically, this study investigated the effects of Balance of payments, the effect of foreign direct investment, the degree of Inflation and the effect of Taxation. The related theories of exchange rate are Purchasing power Theory, Interest Rate Theory and Product Cycle Theory. This study was conducted through a descriptive study. In addition the study employed a survey research design in data collection. The sampling procedure of this study used non-probability sampling procedure particularly purposive sampling or judgmental sampling, this research employed quantitative data collection method whereby data was gathered by the use of closed ended questionnaires which are self-administered. The data collected was analyzed using the software called Statistical Package for the Social Sciences (SPSS) version 22 and results shown in terms of frequency distribution and percentages, the target population of the study is 140 employees of some merchandising companies in Mogadishu. A sample of 42 respondents was selected using Mugenda and Mugenda’s formula. The study used primary data. Data collection methods used included use of questionnaires. The selection sample technique was purposive or judgmental approach. A regression model was applied to determine the relationship between Balance of payments, foreign direct investment, inflation and Taxation as the independent variables and financial performance for os small and medium sized enterprises as the dependent variable.

Accounting information is the basis for business management. It is well known that there is no business management without business reports. The most important reports are the ones that are generated by an accounting system. Largely, these reports are financial statements. Because of that, quality accounting information is the prerequisite for achieving business goals. The fact is that there is no quality accounting information without a quality accounting information system. However, accounting information system is not the only factor that is important for the quality of accounting information. Internal controls, internal audit, information technology and other are significant factors for preparing quality accounting information. An accounting information system (AIS) is a system of collection, storage and processing of financial and accounting data that is used by decision makers. An accounting information system is generally a computer-based method for tracking accounting activity in conjunction with information technology resources. The resulting statistical reports can be used internally by management or externally by other interested parties including investors, creditors and tax authorities.

his study examines the effect of financing sources on financial performance of T Small and Medium Enterprises in Taraba State, Nigeria. The specific objectives of the study are to examine the effect of commercial bank loan, retained earnings, trade credit and leasing on financial performance of Small and Medium Enterprises in Taraba State. The study is limited to 2019 while descriptive survey research design was adopted for the study. The population comprised of small, medium and micro enterprises registered in Taraba State, Nigeria. Based on Small and Medium Enterprise Development Agency of Nigeria report of 2018, the total number of these enterprises are 514, 864. The study set a criterion that for any of the Small and Medium Enterprises to be sampled; the Small and Medium Enterprises must have an asset base (excluding land) of between N5Million-N500Million and labour force of 50 to 199. Based on the report of Small and Medium Enterprises Development Agency, it was only 69 Small and Medium Enterprises that satisfied the stated criteria. These 69 Small and Medium Enterprises formed the sample size for the study. The study used filtering sampling technique to arrive at sample size of 69. Primary data were collected from the field. Questionnaire was used to collect primary data from the field. Data was analyzed using multiple regression analysis. The study found that commercial bank loan and trade credit have significant positive effect on financial performance of Small and Medium Enterprises, while lease financing has significant negative effect on financial performance of Small and Medium Enterprises.

Abstract This article investigates how international decision-making's conditionality aids countries during strenuous economic conditions imposed by the COVID-19 pandemic. It examines and contrasts the European Union's conditionality policies, the International Monetary Fund, and the World Bank as the more influential and leading groups of institutions. The article reveals notable policy differences. As opposed to that of the IMF and WB, the EU's approach is more comprehensive and not confined to economic considerations. Those variations aside, the article draws on the same premise: expectations of compliance with the set conditions. While in-depth, structural requirements could guide ordinary decision-making and build up resilient national institutions and policies, this article questions the merits of large-scale comprehensive terms in the face of a situation created by a force majeure or a humanly uncontrollable event such as the COVID-19 pandemic. With no more initial research addressing the specific question of the application and adequacy of conditionality to force majeure emergencies or pandemic situations of the scale of COVID-19, this article argues in favor of a measured and targeted response limited to the development, design, or determination of policy choices that tackle the intended purpose. Also, for validly practical considerations that search for to ensure the better use of aid and avoid distracting or overburdening the recipient countries to the point of risking losses of devastating proportions, the article proposes to revise and limit conditionality during force majeure events to the essential aspects of transparent management of funds for the sole intended purpose. This in itself is a distinct democratic exercise of efficient and accountable public management decision-making.

ABSTRACT This paper explains the need for supplementing traditional financial and economic factors with softer cultural and institutional measures in explaining the determinants of firm financing. The theoretical arguments are based on the incompleteness of contracts and therefore the important role of ethics and behavioral norms in the need and cost of enforcing such contracts. The practical argument is simply that adding these soft factors to traditional economic factors provides a better and more complete explanation of firm financing. This paper notes the lack of such literature in mainstream finance journals in spite of these demonstrated needs. Finally, this paper introduces the papers in this issue and their contributions.