Cash Value Research Articles

The Disclosure and Valuation of Foreign Cash Holdings

This paper studies the disclosure and valuation of foreign cash holdings using hand-collected data from 2010 to 2013. The SEC has been commenting on foreign cash in its review of 10-K filings since 2011. I find that the SEC tends to target big firms with limited growth and high permanently reinvested earnings. Conditional on the SEC’s comment, firms with Big 4 auditors are more likely to disclose foreign cash holdings, but firms with a CEO who is also the Chairman and more free cash flow are less likely to disclose. I find no evidence that the value of foreign cash is discounted relative to domestic cash on average, although the value of foreign cash decreases in foreign cash level. Furthermore, foreign cash is less valuable when firms only disclose limited foreign operations in Exhibit 21 relative to the overseas operations collected by the OSIRIS international database and when firms operate in more foreign countries, but more valuable when the U.S. parent controls the decision-rights of foreign subsidiaries and when foreign growth opportunities are higher. There is no evidence that proxies for the repatriation tax are negatively associated with the value of foreign cash. I also examine market reactions to the Treasury Department’s recent crackdown on tax inversions.

Mobile Money: The Effect of Service Quality and Competition on Demand

The use of electronic money transfer through cellular networks (mobile money) is rapidly increasing in the developing world. The resulting electronic currency ecosystem could improve the lives of the estimated 2 billion people who live on less than $2 a day by facilitating more secure, accessible, and reliable ways to store and transfer money than are currently available. The development of this ecosystem requires a network of agents to conduct cash-for-electronic value transactions and vice versa. This paper examines how service quality, competition, and poverty are related to demand and inventory (of electronic credit and physical cash) where, in this setting, service quality consists of pricing transparency and agent expertise. Among our results, we find that average demand increases with both pricing transparency and agent expertise, and that agent expertise interacts positively with competitive intensity. We also find that competition is associated with higher inventory holdings of both cash and electronic value, and that agents in high-poverty areas hold greater amounts of cash but do not carry a smaller amount of electronic value indicating that they devote more capital to their inventory. These results offer insight to mobile money operators with respect to monitoring, training, and the business case for their agents. This paper furthers our understanding of service quality, competition and inventory, while developing a foundation for the exploration of mobile money by OM scholars.

On Argument at Play Alive

Three themes are in this essay, “on”, “argument at play”, and “alive”, developed reversely. Alive playing with argument, and “on” as story-thinking can round them up. Section one says we alive cannot think of alive, though crucial. Section two tells of playing with argument that shows “alive”. Section three tells of how story-thinking shows argument at play, to show “alive”. Section four harvests further in interculture. Conclusion tells of joy alive as invincible as imperative. Appendix I is on “Mom vs. Zen”; Appendix II is on theoretical “cash value” of this essay.

Application of Panel Data Approach to Comparing the Relevant and Incremental Information Content of Accounting Variables before and After Implementing the National Accounting Standards

Abstract. The main purpose of financial reporting is representing useful information for users to help them make the conscious economic decisions and finally do the best resource allocation. This goal is achieved through representing relevant and reliable information. This information is realized by the observance of accounting standards requirements and regulations. In Iran this matter has begun by setting national accounting standards since 1999 and binding in 2001. The present study is comparing the relevant and incremental information content of accounting variables before and after implementing the national accounting standards in a period covering eight years (1997-2004) which includes four years before and four years after binding the standards). The research sample contains 123 firms and the dependent variable is the stock market value and the independent variables include net income, stock book value and operational cash flows (as a proxy of financial statements). The multivariate regression is used to analyze the data. Using panel data and measuring the changing effect of operational cash along with net income and stock book value and applying Z voung test has made this study different with other domestic researches. The results show that after implementing the national accounting standards the relevant information content of accounting variables and the incremental information content of book value has been developed.

Does Cash Contribute to Value? A Comparison of Constrained and Unconstrained Firms in China and Germany

A fundamental characteristic of emerging markets is the underdevelopment of legal institutions and financial markets. Therefore, the marginal value of a cash holdings in emerging countries can be lower than 1, due to high agency costs resulting from poor external corporate governance. However, the marginal value of cash may also be high in emerging markets because the information asymmetry between current and new providers of funds is high, which means that it is difficult to access the (low quality) capital markets. We study for the industrialized countries of China and Germany whether corporate cash holdings contribute to shareholder value in both constrained and unconstrained firms. In contradiction to previous literature on emerging markets, we find that the marginal value of cash is not smaller than 1 in China, so that agency costs do not dominate. We, however, find marginal values of cash lower than 1 for unconstrained firms in both countries, implying that in these firms agency costs of cash holdings exist. For constrained firms we find marginal values significantly larger than 1 in both countries. This indicates difficulties in accessing the financial markets for these firms. These difficulties prove to be larger in China than in Germany for small and service firms, but not for high growth firms.

Effects of Flexibility on Capital Structure Decisions in Family Firms

The present study evaluates marginal value of cash for investors. It also undertakes to examine the relationship between financial flexibility and capital structure, as well as effects of financial flexibility on capital structure decisions in family firms listed at Tehran Stock Exchange. A total number of 60 companies are sampled between the years 2008 to 2013. A panel-pool data analysis method is used for testing hypotheses. Results indicate that marginal value of cash using the methodology of Faulkender is positive. Also, a significant and reverse relationship is found between financial flexibility and debt ratio. On the other hand, marginal value of cash highly affects the capital structure decisions of family firms.

Relationship between EVA (Economic Value Added) and Share Prices of Select Companies in BSE-SENSEX - An Empirical Study

In todays competitive world, corporate companies all around the world are trying to maximize the wealth of their shareholders in order to gain market value as well as satisfy their stakeholders. With the gaining popularity of value based performance measures like Economic Value Added (EVA), Total Shareholder Return (TSR), Cash Value Added (CVA) etc., many corporate companies in India have started assessing their value in terms of these measures. This paper investigates the relationship between EVA and share prices of select companies in BSE-SENSEX for a period of six years from 2008 to 2013. The study focuses on the explanatory power of EVA with respect to share prices of the selected companies. In turn, the performance of the selected companies belonging to different sectors in BSE-SENSEX was analyzed using EVA. The volatile nature of the capital markets characterized by various speculative activities have a greater influence on share prices, eventually undermining the impact of performance metrics on them. Thus, the findings of the study enumerates that EVA does not have a considerable explanatory power on share prices.

SELECTED ASPECTS OF THE CONSTRUCTION OF ARMOURED BANK VEHICLES OF NEW GENERATION

The high degree of persons and property security risk, especially during cash value transport increases the demand for Cash/valuables-in-transit (CVIT) vehicles. These vehicles are, in addition to the transport of valuables, which include money, goods made of silver, gold, platinum, may also carry documents containing classified information important for the security of the State. It is noticeable tendency to increase safety requirements for use of these vehicles. The new Regulation of the Minister of Internal Affairs and Administration respecting “the requirements to be met to protect the monetary value stored and transported by businesses and other agencies” of 7 September 2010 (Dz.U. 2010.0166.1128) introduces three groups of CVIT vehicles: type A, type B and type C. The most strict, but also providing the highest levels of security are requirements for CVIT vehicles type A. This article refers to some problems concerning the design of these vehicles. The article presents regulations and standards referring to the CVIT vehicles obligatory in Poland. There are presented the uppermost technical requirements for new generation of CVIT vehicles. There are also proposed the attack protection performance classes and ratings for quality assessment of these vehicles, including the energy ratio. Some of the issues of construction and armour in relation to the use of the series cargo truck bodies and chassis for building the CVIT vehicles are discussed. There are discussed the operation and application of an innovatory auxiliary drive unit and some electronic systems.

Does Corporate Governance Influence Enterprise Risk in India? An Analytical Study

This paper investigates the association between Corporate Governance (CG) performance and enterprise risk in India. The study also investigates the behavior of risk under different classifications. As part of this study, Risk is estimated through a Multifactor Estimation of VaR. with Cash Value Added being used as the covariate that represents the value of the firm. This study helps to rate the progress of enterprise risk governance reforms from the point of CG performance, plan further reforms and enable investors to choose the right firms. Policy makers will know where to focus, stakeholders will recognize their roles and responsibilities with respect to risk management and management will take informed operational decisions around the policies set. Major findings of the paper are: there exists significant risk on the extreme ends of the CGPI ordinal scale, CGPI influences CVA which in turn determines enterprise risk,CVA and risk analysis finds a significant role for industrial segments. Also the number of risk free companies in these extreme segments is the least. Manufacturing and service sectors carry maximum risk

Farmers’ Ability to Pay for Irrigation Water in the Jordan Valley

This study aims to analyze the famers’ ability to pay for irrigation water in Jordan Valley to investigate the farmer capacity to cope with increasing the water tariff. The residual imputation approach was used based on the enterprise budget for crops cultivated in different geographical locations in Jordan Valley. This methodology deducts the contribution of non-water production inputs, annualized capital cost and fixed costs from the gross output and attributes the remaining value to water. The resulting water value is an indication of the economic efficiency of water and a proxy for the maximum farmer’s ability to pay for water. The result shows that cucumber has the highest ability to pay (JD 2.26 m-3); the percentage of water cost to total cost is 1.1%. This low percent does not encourage farmers to save water. The weighted average for maximum farmers’ ability to pay for irrigation water in Jordan valley is estimated at JD 0.76 m-3. The result shows the farmer’s ability to pay for water used in plastic house is JD 1.34 m-3 compared to JD 0.62 m-3 for open field. The estimated value of desalinated brackish water is JD 0.59 m-3 while the average desalination cost is JD 0.28 m-3. Therefore, the current practice of installing Reverse Osmosis units to irrigate high value cash crops by some farmers is economically rational, since water value is twice the desalination cost of one cubic meter. If farmers have to pay the cost of O&M, they need to pay at least JD 0.065 m-3. Increasing the water prices could encourage more efficient water use, shifts to higher value crops, adoption of plastic houses, and encourage desalination of brackish water.

Optimization of Gross Margin in Outsourcing of Management of Inventory of Spare Parts of Production Equipment

The subject of the paper is the presentation of the case-study of the company outsourcing the spare parts stock. As the result of the changes in the agreement between the outsourcer and the large commissioning company, the task of the outsourcing company was to standardize the margin for the individual groups of products, so far highly diversified. The research problem was to analyze the development of margins using CVA (Cash Value Added) analysis and to establish such a level of the above which will satisfy the client’s requirements and provide further employment and generating profit for the outsourcing company.

Cash value added as an indicator of efficiency of issuer’s development in crisis economic environment

Article is devoted to problems of valuation of development of the Ukrainian is- suers by using of a cash value added (CVA), on a base of Boston Consulting Group's approach. Urgency of problems de nes a main goal of the presented research - the analysis of features of CVA formation, an assessment of in^ uence of certain elements on dynam- ics of this indicator, also the analysis of CVA dynamics as the generalized indicator of the enterprise's economic growth. Q e author describes structure and dynamics of bal- ance of the Ukrainian oil market; he shows the dependence of a dynamics of earnings before interest (EBI as a large element of CVA) on the oil re neries' commitment. In article it also characterizes e( ective management of the average cost of the corporate capital according to criterion of economy on nancial expenses; the second criterion is maximizing the sum of CVA. Q e author o( ers a technique of an application of market rate of WACC in CVA indicator (it allows to estimate e? ciency of nancial management on the value-based management approach).

Weed Management in Rice

Successful weed control is essential for economical rice production in the Everglades Agricultural Area (EAA). Weeds reduce rice yields by competing for moisture, nutrients, and light during the growing season. Weed infestations can also interfere with combine operation at harvest and can significantly increase harvesting and drying costs. Weed seed contamination of rice grain lowers grain quality and may lower the cash value of the crop. As with any biological system, an effective weed management program must consider many factors that vary from crop to crop and year to year. The most important of these factors include planting date, climatic conditions, seedbed preparation, seed quality, stand establishment, and water management. This revised 5-page fact sheet was written by D.C. Odero and C. Rainbolt, and published by the UF Department of Agronomy, October 2014. (Photo: C. Odero, UF/IFAS)

Cash Value and Stock Price

In this paper, we develop a dynamic model of optimal investment for shareholders by using the utility-indifference pricing theory. The marginal value of cash holdings is measured in shareholder’s marginal utility of cash. The model predicts that the marginal value of cash varies negatively with the stock price, and positively with the volatility of the stock price. We then test this model using a sample of 453 Chinese Listed Companies from 1999 to 2012. Consistent with the model, we find the same quantitative relationship between the marginal value of cash and the stock price, the volatility of the stock price. The effect may offer a new method to predict the changes of stock price in practice. Our conclusions may also support that cash holdings are more valuable for financially constrained firms than unconstrained firms.

Promoting Efficient Retail Payments in Europe

​In this article we first document the evidence showing how an efficient retail payment infrastructure enhances economic performance. We then review the policy tools available to promote efficient retail payments in Europe. We argue that while SEPA is an important policy initiative that harmonizes payment methods across the EU, it alone is not enough. Vigorous competition and consumer protection policies as well as direct interventions discouraging large value cash payments would be particularly attractive policy tools as they would put no strain on stretched government budgets.

Chat (Catha edulis): a socio economic crop in Harar Region, Eastern Ethiopia.

Chat (Catha edulis) is an important perennial crop and its leaves are chewed for a stimulating effect. It is widely cultivated in the Ethiopian highlands of Oromia region and is figured as Ethiopia’s second largest foreign exchange earner. Its cultivation accounts for about 70% of farmer’s income in the study area. The common effect of its consumption leads to insomnia, a condition that the users sometimes try to overcome with sedatives or alcohol. The present study is an attempt to survey and assess the impact of crop on the community. It has been observed to implicate health problems, reduces savings and nutritional standards of the family members. The chat yields in the area ranges from 1500–1800 kg/ha through monoculture. During the study, the average monthly income of the family practicing chat cultivation was from Birr 8, 533.00 to 13, 166.00 kg/ha per year in Baate and Genede cultivating areas. When the average cost per/ha was rupees 60/kg. The present study shows that during the recent past, leaf consumption has increased significantly. Chat growers are not only producers but also traders and consumers. Its consumption has become a widespread habit from secondary schools. Highest number of consumers was found to be among drivers followed by students and shopkeepers. The consumption of the plant is not considered a taboo but on contrary a status symbol in the region. It has no legal or moral implications and is considered as a part of custom and habit of local people. High value cash crop like vegetables and orchard fruits needs to be used as a replacement for chat which could be a regular source of income to farmers. Alternative sources of income for farmers needs to be scientifically worked out and proposed keeping in view the proportion of agricultural land reserved under chat cultivation and to increase the production of food grains being produced.

Quantifying the impacts of land use/land cover change on groundwater depletion in Northwestern China – A case study of the Dunhuang oasis

In recent decades, the Dunhuang oasis in the arid Northwest China has been undergoing significant changes due to social-economic development and expanded irrigation for agricultural production. Groundwater table was found to have significantly declined during the period of 1987–2007 owing to greater pumping. We analyzed the impacts of land use/land cover (LU/LC) changes on the groundwater fluctuations in the study area. The LU/LC types were derived from the satellite images for the years of 1987, 1990, 1996, 2001 and 2007. The water consumptions associated with the LU/LC types were estimated using the FAO-Penman–Monteith method. Results show that during the period of 1987–2007, the area of agricultural land sharply increased by 98.7km2, and the cash crops were the main contributor. Under the current market system, farmers had much more autonomy and greater incentives to shift the cropping pattern from the traditional food crops to the high value cash crops with greater water consumption. The total water consumption of the cash crops accounted for 14.1% of the total water consumption in 1987, but increased to 71.6% in 2007, becoming the largest water consumer. The agricultural land use was the main cause of the declining groundwater table during the period from 1987 to 2007.

Accrual Quality: Reversals and Cash Conversion

We estimate the firm-level rate at which working capital accruals convert into future cash flows. These conversion rates determine the expected cash value of a dollar of working capital accruals. For firms whose accrual innovations reverse within one year, we find that, on average, a one dollar innovation to accruals translates into 95 cents of cash flow in the subsequent fiscal year. We find that the relation between working capital accruals and annual returns increases with the rate at which accrual innovations convert to cash flows, as does the relation between accruals and annual bonus pay to the CEO. Moreover, when accrual innovations convert more quickly and completely to cash flows, firms are less likely to receive an Accounting and Auditing Enforcement Release (AAER) from the SEC.

Audit Quality and the Market Value of Cash Holdings: The Case of Office-Level Auditor Industry Specialization

SUMMARY This study investigates the monitoring role of high-quality auditors defined as office-level industry specialists in the stock market valuation of cash assets. We find that the market value of cash holdings is significantly higher for the client of an industry specialist auditor. The marginal value of cash is 34 cents higher for the client of a joint-industry specialist at both the national and city levels than for the client of a nonspecialist. We also find that cash holdings are more closely associated with capital investment and the market value of capital investment is significantly higher when the auditor is a joint-industry specialist. Moreover, we find that the value of cash increases significantly when the client changes its auditor to a joint-industry specialist. Our findings hold even after controlling for the client's governance efficacy and financial reporting quality. Our results provide new insight into the mechanism through which high-quality audits affect firm value: External audits facilitate shareholders' monitoring over managerial cash expenditures, thereby leading market participants to attach a higher value to cash holdings.

WIC Participants’ Perceived Behavioral Control, Attitudes Toward, and Factors Influencing Behavioral Intentions to Redeeming Cash-Value Vouchers at Certified Farmers Markets

Background: The California Supplement Nutrition Program Women, Infants and Children (WIC) offer a Cash-Value (CV) voucher for the purchase of fresh fruits and vegetables that can be used at Certified Farmers’ Markets (CFM). Purpose: The purpose of this study was to identify factors associated with redeeming WIC CV vouchers at (CFM) among English and Spanish speakers. Methods: This was a cross-sectional study; in which Theory of Planned Behavior constructs were included in a self-report survey. Data were collected from women (n=252) at three rural northern California WIC clinics for two weeks. Results: Proportionately more Spanish speakers had greater perceived behavioral control for redeeming CV vouchers at CFM. Not enough variety of produce offered (p