Equity Management Research Articles

Performance Evaluation of Commercial Banks in Oman Using Ratio Analyses

Purpose of the study: The purpose of the study was to critically analyze the effectiveness of banks’ performances and to examine the associations amongst the asset management, banks’ size, operational efficiency, and their impact on the bank’s performance. Design/Methodology/Approach: The secondary data was obtained from the annual reports of five selected commercial banks of Oman listed in the Muscat Securities Market (MSM) for the period 2013 to 2019. The collected data was analyzed through financial ratios using excel and SPSS and was used to evaluate the banks’ performance. Findings: The study revealed that the Operational Efficiency (OE) of the selected commercial banks had an impact on the Return on Assets (ROA); advances of the selected commercial banks had an impact on the interest income whereas operational efficiency of the selected commercial banks had NO impact on the Interest Income. The study further confirmed that Bank Muscat proved to be the bank that performed well over the years 2013 to 2019. Research Implications: The study proved that the banks’ financial performances can be measured through the assets size, asset management, and equity management using ratio analysis which can be a good measure to adjudge the financial performances of the banks. Social Implications: The study helps the stakeholders of the banks to understand the factors and the banking activities that might help to enhance the financial performances of the banks and to take necessary action and suitable decisions accordingly. Originality/value: The study was restricted to five selected commercial banks of Oman and the study had relied mostly on quantitative techniques involving ratio analyses. The study can be extended to all the commercial banks in Oman including the most determining factor viz. customer satisfaction. Keywords: Financial Performance of Banks, Operational Efficiency, Return on Assets, Return on Equity, Interest Income, Ratio Analyses

ЗАСТОСУВАННЯ ДЕТЕРМІНОВАНОГО МОДЕЛЮВАННЯ ДЛЯ ПІДВИЩЕННЯ ПРИБУТКОВОСТІ В УПРАВЛІННІ ФІНАНСОВИМИ РЕСУРСАМИ ПІДПРИЄМСТВА

It is proved that the finances of the enterprise as part of the financial system occupy one of the main places in the structure of financial relations of society. The efficiency of the financial system is influenced by the dynamics of funds, their speed and quantity. Therefore, the specification of indicators of the effectiveness of the formation and use of financial resources is considered a priority issue among others for the management of the enterprise. The article reveals the need for the introduction of economic and mathematical modeling for the quantitative assessment of economic systems and processes of the enterprise. Modeling is a unique tool for solving numerous economic and financial problems of the enterprise. It is proposed to spread the factor model through the use of indicators that assess the effectiveness of the use of aggregate, equity and debt capital of the enterprise. Techniques of deterministic modeling involve the expansion of the factor model of return on borrowed capital in the form of return on sales and turnover ratio of borrowed capital. It is possible to expand the factor model of return on equity by decomposing it into constituent parts of the indicator of return on total capital. Thus, it can be stated that, other things being equal, the return on equity increases with an increase in the share of borrowed funds in total capital. It is possible to increase the amount of borrowed capital in order to increase the return on equity if the economic return exceeds the level of the bank interest rate. A factor model of return on total capital is formed, which includes the return on sales, the turnover ratio of loan capital and the financial structure of the enterprise or the share of loan capital in total capital. This indicator characterizes the structure of sources of funding for the enterprise, as well as a manifestation of the company's chosen policy for its financing. The higher its level, the higher the degree of financial risk of bankruptcy, but at the same time the better return on total capital. Thus, the analysis of the obtained results shows that in order to improve the management of both equity and aggregate capital it is necessary: increase the share of borrowed funds in total capital; increase the profitability of product sales.

УПРАВЛІННЯ КАПІТАЛОМ ПРОМИСЛОВИХ ПІДПРИЄМСТВ

Today, industry is one of the most vulnerable sectors of Ukraine’s economy. Some industrial enterprises are inefficient because the existing fixed assets are obsolete and their own funds are insufficient for their renewal also little attention is paid to capital management. The article examines the essence of the concept of capital and its management. It is proposed to define capital as a certain resource (money, labor, etc.), which is aimed at carrying out the activities of the enterprise to obtain a profit of the enterprise. The scheme was developed, which reflects the main objectives of capital management of an industrial enterprise, in particular: minimizing possible financial risks at the planned level of return on capital and effective financial control; rational use of the generated capital of an industrial enterprise; ensuring sufficient capital; timely reinvestment of capital and ensuring its turnover; creating a favorable financial climate for maximum profit and others. The process of capital structure management in terms of equity and loan capital management is analyzed. The tasks facing the management of equity and borrowed capital are disclosed. It is determined that any industrial enterprise has two functional subsystems: management of capital formation and management of capital use. It is noted that the effective formation and accumulation of capital value is ensured by several factors: the current assets of the enterprise and the amount of value added formed as a result of asset turnover. The dynamics of the number of industrial enterprises and the value of their current assets were analyzed, revealing that since 2016 the number of industrial enterprises decreased significantly compared to 2015 and in 2017 was unchanged, but in 2020 significantly increased compared to 2015 increased by 0.35%. Current assets of industrial enterprises increased by almost 84% in 2020 compared to 2015. The basic principles of capital management, which contribute to the formation of the environment to achieve the main goal of capital management to effectively optimize the operation of the enterprise.

УДОСКОНАЛЕННЯ ОБЛІКОВО-ІНФОРМАЦІЙНОГО ЗАБЕЗПЕЧЕННЯ УПРАВЛІННЯ ВЛАСНИМ КАПІТАЛОМ

The article covered the interpretation of the concept of «equity» in the various legal and regulatory instruments and scientists and the need to take into account the economic, accounting, and rights-based approaches to the interpretation of equity. The impact of equity accounting information on management decisions was also considered. The components of the company's equity according to the Statement of financial condition are considered. The stages of formation of accounting and analytical support of enterprise capital management are highlighted. The problems of planning, maintenance, use of accounting for certain components of equity are considered. Based on the study of the role, importance, and functions of equity identified its main characteristics for the enterprise: the basis for the beginning and implementation of activities; market value base; source of risk investment financing, coverage of temporary damages, the welfare of the founders (participants); performance measure, the degree of independence and influence of owners on the company; the measure of liability and protect creditors from losses. The results of the research in the part of the improvement of accounting provision of users with the information about formation and change of own capital are highlighted. It is established that efficiency of equity management and methodology of its accounting is determined by the composition and structure of management objects, which depend on: the form of ownership of a business entity, legal form of organization, method of formation (establishment) of an enterprise, size of an enterprise, list of operations on changes in equity, software and technical means of data processing, etc. It is established that the process of equity accounting consists of many blocks, which should be specified and detailed depending on a set of operations with the equity capital. The informativeness of financial statements, in particular the balance sheet, the statement of financial results, the statement of shareholders' equity, and notes on the volume, structure, and reason for changes in shareholders' equity as a whole and its components are disclosed.

Active Equity Management, 1991-2020

Active Equity Management, 1991-2020

Assessment of Financial Performance of Agricultural Cooperative Unions: The Case of West Harerghe Zone, Oromia Region, Ethiopia

Financial statement analysis involves comparing cooperative union performance and evaluating trends in the unions’ financial position over time. Managers use financial statement analysis to identify situations demanding attention; potential lenders use financial analysis to determine whether the union is creditworthy; and stockholders use financial analysis to help predict future earnings, dividends, and free cash flow. This study is conducted on Assessment of Financial performance of Agricultural Cooperative unions: the Case of West Harerghe zone, Oromia region, Ethiopia. The general objective of this study was to evaluate financial performance of agricultural cooperative union. For this study, the researchers used both primary and secondary sources of data taken from purposively selected two cooperative unions (i.e. Burka Galeti and Chercher Oda bultum) since they do have audited financial statements out of five unions found in western Haraghe. The study also used FGD and interview with fiancé managers and employees of the union for further explanation. Based on the financial statement analysis the researchers found that the agricultural cooperatives are efficient and effective in asset utilization, activity and debt equity management ratios. However, the financial statement analysis showed that the current asset ratio is below the industry standard that cannot cover its short term liabilities form its current asset section of the balance sheet. Moreover, the profitability ratio of the unions revealed that the agricultural cooperative unions are efficient to make profit but the margin of profit is below 25% that cannot make the union successful to cover all the incidental costs that are borne within short and long-term periods. The OLS model revealed that quick, fixed asset turnover, total asset turnover, inventory turnover and gross profit margin ratios are significantly and positively affecting ROA. As a result, the researchers recommend that the agricultural cooperative unions are expected to improve its effective and efficient management of the day to day activities of the union. Furthermore, the unions are expected to higher managers who have the caliber to manage each and every activities of the union and who are visionary to bring success for the unions.

Innovative digital technologies in the concept development of brand equity management

The concept of branding takes a special place in the system of entrepreneurship. Development of branding in trade is determined by pecularities of this field.. The article deals with relevance of branding use as a concept of company management. The basic concepts in the field of brand equity are analyzed and the main trends of brand cost valuation are investigated. Advantages of a brand strategy development are defined. Strategies for expanding the boundaries of brand use are presented. Innovativetools that increase the effectiveness of branding and influence the growth of brand equity are studied. These tools include the use of Big Data technologies for the collection and processing of information, improving marketing research used in situation analysis; the development of the Internet of things as an innovative direction for the formation of a marketing mix; the use of mobile technologies. Pecularities of brand management activity in running an organization are considered. The main directions influencing increase of the market value of a company are given. The role of the value-based approach as a criterion for the success of the company’s activities in brand management is defined.

Brand equity and its Influence on Customer Satisfaction in Midscale and Budget Hotels of Jaipur

The main purpose of this paper is to utilise the customer-based brand equity (CBBE) model of David Aaker (Aaker, 1991) to examine the influence of brand equity on customer satisfaction in midscale and budget hotels in Jaipur. This study recruited 250 respondents who regularly visit the identified branded midscale hotels of Jaipur. In this paper, managerial implication of CBBE is proposed to provide a reference tool for the management of the brand equity of these midscale hotels and to enhance their brand value. The negative impression, which existed in the minds of consumers of midscale and budget hotels, is being replaced by a perception of affordability, efficiency, and good experience. The fast-changing market equation has positively impacted the midscale hotels segment. It can be seen from the competition among domestic as well as international hospitality operators in this segment. Midscale hotels are being redefined with new concepts, innovations, and strategies. Now they are mini full-service hotels being recognised as business class and installed with the basic facilities, targeting a specific market and mid-rank business executives and price sensitive corporate customers. Budget hotels reasonably priced with good service, style, and better ambience demonstrate professionalism. With heavy demand and less supply of midscale and budget hotels in Jaipur, hotel management has to stick to brand equity in order to maintain customer satisfaction, which in turn leads to profit.

Analysis of the own capital of Ukrainian enterprises and features of its management in the conditions of the new economy of the global market

The article notes that the concept of "equity" in the studied literature is considered from the standpoint of economic, accounting, legal and financial management. The analysis of the dynamics and structureof the balance sheet of enterprises by type of economic activity of Ukraine for six years shows an increase inthe balance sheet currency by 90%. An analysis of the statistical dynamics of changes in the structure ofequity of enterprises by type of economic activity of Ukraine over six years shows that since 2014 the structure of registered capital, additional capital has changed dramatically and there is uncovered loss, which hasa negative tendency to increase. The low value of retained earnings and the emergence of losses justifiesthe need for an effective system of equity management, because it is due to this component there is the increase in equity and expansion of economic activity. Tasks for effective management of own capital of enterprises have been defined. The stages of the system of effective equity management of enterprises havebeen proposed.

BRAND EQUITY MANAGEMENT: INTERBRAND METHOD

Today, the brand is considered to be the most important element of the intangible assets of the company. Thus brand and value within a brand is one of the most important concepts in marketing. The brand equity is the term that represents the added value of products and services, and this value is reflected in everything that consumers think, feel and make in relation to the brand. Recipients of the added value can be consumers or companies. In the global economy, effective brand equity management is of crucial importance in identifying consumer needs and preferences, and satisfying them to overcome consumer expectations, thereby increasing the value of the brand, and thus the value of the company, ensuring market survival and establishing the basis for further growth and development. Strong brands affect business results primarily through the impact on three key stakeholder groups: consumers, employees and investors. The Interbrand method for brand valuation was designed to take into account all three groups of stakeholders. The basics of the model are the following components: the analysis of the financial results of branded products or services, the analysis of the brand's role in purchasing decisions and the competitor's brand strength. The goal of this paper is to identify the elements that most influence the creation and maintenance of brand equity, and analyze the positioning and value of the most successful globally traded brands based on the Interbrand methodology.

Effect of Brand Equity on Consumer Buying Behavior

The purpose of this paper is to propose and test a model for getting a more comprehensive understanding of brand equity. It aims to analyze the effects of this construct on consumer’s responses using two European countries' data. SEM structural equation modelling was used through which the hypotheses were tested. Measurement invariance and stability of the model across the two national samples were fairly assessed by using multi-group confirmatory factor analysis. The results indicate that dimensions are inter-relatable to brand equity. There is a positive link between brand awareness which impacts brand associations and perceived quality. Brand loyalty is highly relatable by brand associations. At last, all of these are interlinked with brand equity linked to perceived quality, brand associations & brand loyalty. These possible findings link the positive impact of brand equity on the responses of consumers. The proposed general framework is generalized across all nations. Only a few differences were observed. A few in stock of a set of product categories, brands and countries were used. The practical implications of the study provide essential implications for brand equity management. These financial metrics can fit with consumer-based equity measures to better check brand performance over time against competitors to increase quality standards against others. Favourable feedback results in better branding. Moreover, the proposed model using data from a sample is used to study the limited international brand equity literature in two countries. It also enlightens the brand equity literature by empirically in-depth analyzing the relationships between consumer-based brand equity dimensions and their effects on consumers’ responses.

Institutional performance and participatory paradigms: Comparing two groups of watersheds in semi-arid region of India

Watershed development programmes carried out in different agroclimatic conditions in India resulted in beneficial impact in terms of productivity enhancement and natural resources conservation, but less attention paid to institutional and participatory aspects. This paper explored the performance of various institutions regarding execution of watershed development programmes in semi-arid region of India. Recorded observations from documents maintained at watershed level and information collected through primary survey as well as focus group discussion with different types of stakeholders were used for analysis. The results indicated lacunae in participatory aspects during programme implementation process like monitoring activities, management of common property resources and equity. Gap in linkages and differential level of performance of various watershed level functionaries indicates the necessity for corrections in the structures and linkages pattern for sustainability of the infrastructure and institutions. The study also showed unequal priorities by the implementing agencies towards institutions, land and water resources development, production enhancement activities and fodder resources development as well as rationalities of technical, economic, financial, political and social aspects among the watersheds.

Examining the Antecedents of Brand Engagement of Tourists Based on the Theory of Value Co-Creation

Tourist engagement in marketing activities for destinations has been seen as a new driving force for the sustainable development of such destinations and as an effective way to improve their brand equity. Based on the theory of value co-creation and the theory of consumer-based brand equity for destinations, this paper examines the antecedents of brand engagement and the causal paths among them and compares the estimated values of different paths with brand image, brand awareness, and brand quality as the independent variables; brand value and brand trust as the mediating variables; and brand engagement as the dependent variable, taking Shandong Province as an example. The final results show that brand image, brand awareness, and brand quality are all key antecedents of brand engagement; however, they play different roles. The total effect of brand quality is the largest, the total effect of brand awareness follows, and the total effect of brand image is the smallest. Furthermore, the mediating effect of brand value is larger than the mediating effect of brand trust. The results provide empirical support for promoting the management of brand equity for similar destinations and encouraging tourists to participate in value co-creation activities.

The toolkit for financial risk management in financially unsustainable corporations

Subject. Financial risk management is a cornerstone for the strategic development of any corporation. This especially matters when the economy is volatile and the financial standing of the corporation is affected externally. In this case, it is important to find tools to manage financial risks during the unstable period of corporate operations. Objectives. The study aims to devise and substantiate tools for financial risk management by identifying them and striving to reduce the exposure of financial operations during the strategic period. Methods. To substantiate the above ideas, I apply a systems approach. Studying equity management, I use methods of logic and structural analyses, synthesis, induction, deduction, graphic interpretation, mapping of relationships. Results. The study was proved with the case of Coca-Cola HBC Russia. Following a step-by-step strategy, I identified risks, their causes, and the appropriateness of the strategy for their reduction as part of the full financial risk management process (ERM). Conclusions and Relevance. The study gave theoretical and practical results that contribute to the methodology for financial risk management. I specify what tools will work to evaluate financial risks, and find techniques for avoiding, preventing and eliminating their impact on corporate operations. I discover the dependence of factors, which influence the financial position and possibilities of eliminating adverse effects that cause the exposure of financial operations and financial wellbeing of corporations. The findings can be used by those responsible for corporate risk management in financial risk management. The findings can underlie further research into the identification, assessment and management of financial risk during the volatility of the economy.

Servbrand Framework: A Business-To-Business Services Brand Equity Framework

ABSTRACT Purpose: The research reported on here set out to develop a tailored branding model for business to business (B-to-B) services by applying the brand resonance pyramid to a selected B-to-B services context. The brand resonance pyramid was developed based on research that was predominantly consumer product or individual brand oriented, though one of the objectives when the model was developed was that “the model had to be versatile and applicable to all possible kinds of brands and industry settings. As more diverse applications of branding continued to emerge for products, services, organizations, people, places, and so forth, the model needed to have far-ranging relevance”. The brand resonance pyramid therefore had to be applicable to any context, including B-to-B services contexts. However, consumer goods branding strategies are not directly transferable to B-to-B or services markets and there are documented differences between the B-to-B and business-to-consumer (B2C) markets and products and services contexts. There is also doubt regarding the validity of the contention that the brand resonance pyramid should be applicable to the B-to-B sector. Methodology: Using an interpretivist qualitative research approach and an exploratory research strategy, the Servbrand framework was developed empirically by applying the brand resonance pyramid to a selected B-to-B services context. Fourteen useful in-depth interviews were obtained from appropriate and information rich participants that represented more than 14 of the 89 organization that were included in the selection frame. Some of the participants were responsible for the relevant decisions of more than one organization. Findings: The results from the study reported on here (summarized as Figure 5) prompted the inclusion of a people dimension and elevated the importance of relationships in an amended B-to-B services brand equity framework. The people brand-building block includes the dimensions of attitude and demeanor, personality and values, personableness, product knowledge and client knowledge. Relationships, as the ultimate aim of the framework, concern both interpersonal relationships and partnerships. The article presents a conceptual framework to guide effective brand building strategies in a selected B-to-B services context. Researchers can use the framework to test its applicability in other contexts, which will contribute to the amendment of a significant brand equity management framework. The Servbrand framework can assist marketing practitioners to improve the effectiveness of strategic brand management for B-to-B services. Contribution: The empirical research contributes to three areas of brand equity research, namely: 1) the offering type – by investigating service offerings rather than product offerings; 2) the brand level – by investigating organization-level brands rather than product-level brands; and 3) context – by investigating a B-to-B context rather than a B2C context. A revised brand resonance pyramid is proposed and called the Servbrand framework.

Investigating determinants of brand equity in mobile commerce

According to the recent development of mobile computing and the proliferation of mobile devices, mobile commerce (m-commerce) has become an important part of today's businesses. One of the main challenges of m-commerce success is the management of brand and brand equity which is rarely explored in previous studies. Therefore, the main objective of the study is to explore the determinants of brand equity in m-commerce via a mixed method. In the first step, literature review and focus group method were used to identify effective factors of brand equity in m-commerce. In the second step, to evaluate the extracted factors from customers' viewpoints, a survey method has been used. Finally, in the third step, FAHP method was applied to prioritise the factors and their related measures. The findings show that among the seven factors of brand equity in m-commerce, ease of use and information/content quality has the highest priority in branding.

Conventional versus Unconventional Outsourcing

Today’s world is becoming very competitive and companies are going the extra miles and revisiting their strategies to keep up and sustain competitive advantage. Companies are striving towards low cost, high-quality products delivering value to customers therefore a need to focus on core competencies is essential to create that value and minimize overheads. Capitalizing on know-how, brand equity management, customer and partner relationship management, today’s companies drive for building long-term strategic ventures with selected partners in key markets. Companies are realizing the importance of adding value, reducing cost while delivering products to customers smoothly and efficiently therefore gaining market penetration, market development and product development which result in more market shares at minimum cost, better global presence, brand ownership in case of distributor partnership allocation. This study focuses on the many ways of conventional and unconventional outsourcing, to gain competitive advantage while pointing out where outsourcing can be of failure to some companies lacking strategic management. It also shows the importance of intelligent versus traditional outsourcing where factors such as cutting cost, streamlining the operations and creating partnerships have to be more revolving and consider more convergent and divergent thinking adding for instance innovation to cutting cost, or streamlining the value chain as a whole or adding trust based partnership not just an arm length.

Man vs. Machine: Quantitative and Discretionary Equity Management

In modern asset markets, man and machine compete for profits. How does each fare? I build a learning model in which quantitative investors (reliant on computer models) have more learning capacity but less flexibility to adapt to market conditions than discretionary investors (reliant on human judgment). I use machine learning to categorize US active equity mutual funds as quantitative or discretionary. Consistent with the model's predictions, I find that quantitative funds hold more stocks, specialize in stock picking, and engage in more overcrowded trades. Discretionary funds hold lesser known stocks, switch between picking and timing and outperform in recessions.

АНАЛІЗ ДЕЯКИХ ФІНАНСОВИХ ПОКАЗНИКІВ ТРАНСНАЦІОНАЛЬНОЇ КОРПОРАЦІЇ THE COCA-COLA COMPANY В УКРАЇНІ (НА ПРИКЛАДІ ТОВ «КОКА-КОЛА УКРАЇНА ЛІМІТЕД»)

The number of transnational corporations and foreign trade operations with their involvement continues increasing. The interest in researching their operations, using an analysis of their key financial indicators has increased because of this process. In Ukraine, the most attractive sector of the economy for TNCs is the food industry. According to the current estimated value of assets, a great share in the food industry takes office of the US TNC " The Coca-Cola Company " - The "Coca-Cola Ukraine Limited" LLC. Due to the fact that the financial reports of “Coca-Cola Ukraine Limited” is confidential and at least was published in 2018 for the first time, scientists did not pay enough attention on researching and analysing of key financial indicators. As the result, a comprehensive research is relevant, especially for borrowing management experience by Ukrainian companies, as well as for the conducting of foreign economic transactions between Ukrainian companies and LLC Coca-Cola Ukraine Limited . The article estimates and analysis of key financial indicators for the "Coca-Cola Ukraine Limited" LLC as a part of an American multinational corporation "The Coca - Cola C ompany », for groups such as the profitability, the liquidity and the solvency, the financial stability and the property status. During the research, problems were identified in the company's activities, including: ineffectiveness of the dividend policy; low effectiveness of asset and equity management policies; low effectiveness of debt management policies; low investment in upgrading production assets. Moreover, the directions of solving these problems was formed. They are: focusing management the "Coca-Cola Ukraine Limited" LLC on increasing the efficiency of management policy dividends, which can reduce the value of equity; to optimize the structure of assets by reducing their volume, while increasing the income of the enterprise and minimizing its costs; to try to invest more money in financial investments or production activities; they need to review their credit policy, need to increase their borrowing, and etcetera.

Spanning tests for Markowitz stochastic dominance

We derive properties of the cdf of random variables defined as saddle-type points of real valued continuous stochastic processes. This facilitates the derivation of the first-order asymptotic properties of tests for stochastic spanning given some stochastic dominance relation. We define the concept of Markowitz stochastic dominance spanning, and develop an analytical representation of the spanning property. We construct a non-parametric test for spanning based on subsampling, and derive its asymptotic exactness and consistency. The spanning methodology determines whether introducing new securities or relaxing investment constraints improves the investment opportunity set of investors driven by Markowitz stochastic dominance. In an application to standard datasets of historical stock market returns, we reject market portfolio Markowitz efficiency as well as two-fund separation. Hence, we find evidence that equity management through base assets can outperform the market, for investors with Markowitz type preferences.