Future Profitability Research Articles

РОЛЬ ФИНАНСОВОГО АНАЛИЗА В ПРОГНОЗИРОВАНИИ ДЕЯТЕЛЬНОСТИ ОРГАНИЗАЦИИ

The article reveals the influence of financial analysis on the forecasting process. The role of financial analysis in the effective management of an enterprise for making strategic decisions is determined. The author emphasizes the variety of financial analysis tools that provide different levels of detail and depth of analysis. The relationship between financial analysis tools and their role in various aspects of organizational management, including the planning process, choosing a development strategy and optimizing the capital structure, has been identified. Forecasting financial results based on current data allows you to assess the future profitability and risks of an investment project. The characteristics of financial indicators, payback estimates and the degree of stability of financial flow are presented, taking into account risks and resource allocation when assessing the effectiveness of investments. An overview of forecasting shows the place of methods in enterprise analysis during planning and the potential effect on the organization’s activities. The key aspects of the use of statistical methods in forecasting financial flows are considered. The selection of sources includes the analysis of various financial sources in order to determine the most effective and suitable for a particular investment project. The main directions for choosing sources of financing for investments are summarized. Analyzing changes in key financial indicators allows you to take proactive measures to manage risks and adapt to changing conditions.

ПЕРСПЕКТИВЫ СТРАТЕГИИ АКТИВНОГО ИНВЕСТИРОВАНИЯ НА ПРИМЕРЕ ХЕДЖ-ФОНДОВ

The article describes the current status of the hedge fund segment and their investment strategies using the analysis of financial statements, business models and the index method, when a group of hedge funds adhering to the same strategy are combined into an index. CAPM modeling, OLS and calculation of efficiency coefficients (including the Sharpe coefficient) were used. The results of the assessment allowed us to conclude that the most impactful in modern conditions is the global macro strategy of hedge funds investment. To evaluate future profitability within the framework of a given strategy, a model of dependence on market indices was developed.

실물옵션을 활용한 Olhson 모형 가치평가에 관한 연구

This study newly suggests investor’s psychological expectation values as ‘other information’ not yet clearly identified in the Ohlson model. These values are calculated through real option valuation. A total of 9,791 annual corporate stock prices and financial statements are investigated for KOSDAQ companies from 2011 to 2021. According to the classification criteria of the Korea Exchange, the entire sample was classified into a total of 8 panels: bluechip, midsize, venture, and technology companies, and each further classified into two sub-groups based on their respective residual income signs. We empirically find that the real option value, assessing investors’ expectations for future profits, significantly contribute to explaining stock values along with the book value per share and residual income per share comprising the established Ohlson model. In particular, for companies with negative residual incomes, the real option value demonstrates a higher explanatory power for stock prices compared to those with positive earnings. Furthermore, robustness test shows that the real option value’s explanatory power for stock prices remains significant even when accounting for previously recognized factors such as cash dividends per share, market price to book value ratio, total debt ratio, systematic risk, and market index.

A Systematic Review On Green Banking Disclosure

This paper presents a systematic review of the topic of Green Banking Disclosure (GBD). GBD has been a growing concept since 2008, with its development bringing about changes, both in terms of the natural and social environments. As such, it is crucial to give it due attention. The study reviewed 50 papers, including 65 empirical ones, and yielded four main findings. Firstly, in terms of theory, legitimacy theory, stakeholder theory, and the concept of Spider profit growth, which serves as an indicator of a company's fund utilization efficiency, were prevalent in the literature. These theories provide a basis for evaluating company management performance, motivating management, and controlling economic resource allocation, ultimately aiding in forecasting future profits and economic events. Secondly, the Green Coin Rating (GCR) concept, comprising six points, played a significant role in the discourse on green banking. Thirdly, the majority of GBD studies were conducted in Muslim-majority countries. The research population included all financial reports of Islamic Commercial Banks during the period 2016-2019. The sample consisted of nine Islamic Commercial Banks that published annual reports up to 2019 and met the criteria for implementing the Green Banking concept. The study suggests that future research endeavors should consider integrating both primary and secondary data to assess the implementation of Green Banking and green financing in banking institutions. This approach would lead to a more comprehensive understanding of the subject and provide a more communicative perspective for customers.

ESG 경영과 기업 위험추구행위의 관계, 그리고 기업가치

[Purpose] This study investigates the association between ESG management and corporate risk-taking, and further examines how the level of corporate risk-taking affects the relationship between ESG management and firm value. Shareholders have an incentive to maximize profits through corporate risk-taking, but ESG management monitors and suppresses the excessive risk-taking by considering the benefits of not only shareholders but also various stakeholders around the firm and pursuing transparent governance and the promotion of social value. In addition, if ESG investment(insurance-like assets) increases, the amount invested in risky investments may relatively decrease, thereby reducing overall corporate risk-taking. However, on the other hand, since ESG activities generally involve investing in sectors that do not directly generate profits, managers may actively invest in risky businesses that can secure more profits to make up for these expenditures. Because such conflicting predictions are possible, the association between ESG management and corporate risk-taking is an issue which requires empirical analysis.
 [Methodology] A regression analysis was performed for domestic listed firms from 2012 to 2018 using ESG evaluation ratings provided by KCGS and corporate risk-taking variables measured by standard deviation of future profit rate. Also, this study investigates the effect of the interaction term between ESG and risk-taking level to examine the impact of corporate risk-taking on the relationship between ESG management and firm value.
 [Findings] This study finds that the higher ESG evaluation score, the lower corporate risk-taking, and this negative relationship was significant in the governance element among the three elements of environment, social, and governance. Additionally, a significantly positive relationship between ESG management and firm value exists only when the level of corporate risk-taking is low, and there is no such relationship when the level of corporate risk-taking is high.
 [Implications] This study contributes to the accounting literature by showing that ESG management affects corporate risk-taking related to investment activities and that ESG management has a positive impact on firm value only when excessive risk-taking is restrained.

Abnormal Comparison Analysis of Return and Trading Volume Activity Before and After The Announcement of The Covid 19 Pandemic

The Covid-19 pandemic has been a significant turning point in global history, not only from a public health perspective but also in the context of its impact on economic stability, including capital markets. This research aims to analyze the reaction of the Indonesian capital market to the first case of Covid-19 by focusing on two indicators, namely Abnormal Return (AR) and Trading Volume Activity (TVA). Observations were carried out seven days before and seven days after the first announcement of Covid-19 in Indonesia. The research population includes Financial sector companies listed in February and March 2020 on the Indonesia Stock Exchange (BEI). The purposive sampling method was used to select 30 financial companies that met certain criteria. A quantitative approach and comparative method were used in this research, tested using the Wilcoxon Signes Rank Test. The research results show significant differences in AR before and after the announcement of the Covid-19 pandemic. The increase in Abnormal Returns after the announcement indicates that investors tend to trust companies that already have a record of returns or profits before the event, rather than having to rely on predictions of future profits. The Wilcoxon Signed Rank Test results also revealed significant differences in Trading Volume Activity before and after the Covid announcement, indicating changes in trading activity in the capital market. This research provides insight into how the Indonesian capital market responds to health crisis events such as Covid-19, and can serve as a basis for further understanding of economic and financial dynamics in facing similar challenges.

Navigating the Delivery of Transit-Oriented Development: A Case Study of Private Developers in Riyadh

Transit-oriented development has gained global attention as a sustainable urban planning approach. However, its implementation in developing countries, particularly in the Middle East, remains underexplored. This study aims to investigate the challenges and opportunities facing private developers in Riyadh, Saudi Arabia, in the context of delivering TOD projects. Using a mixed-methods approach that combines survey data and interviews, the research explores four key dimensions: regulatory, structural, collective vision, and economic factors. The findings reveal a complex local environment characterized by both encouraging prospects and formidable challenges. Institutional coordination, procedural clarity, and timely approval emerge as critical challenges in the regulatory dimension. Land-related issues, including land amalgamation and fragmented ownership, are identified as significant structural obstacles. While there is general enthusiasm for TOD among private developers, the lack of effective public–private collaboration and a unified vision hampers progress. Economically, high initial investments and regulatory uncertainties are the main challenges, although there is cautious optimism for future profitability. Despite these challenges, the study unveiled policy implications for implementation and offered information for context-specific adaptive planning. The research contributes to the growing body of literature on TOD in developing countries and lays the groundwork for future multistakeholder studies.

CORPORATE SOCIAL RESPONSIBILITY AND MARKET-BASED PERFORMANCE: EXPLORING BI-DIRECTIONAL RELATIONSHIP IN AN EMERGING ECONOMY

Corporate Social Responsibility (CSR) is a critical indicator for bridging corporately responsible behavior and stakeholder inclusion towards achieving long-term development. While stakeholder and reputation-building theories suggest that CSR can affect organizational performance, slack resource theory proposes organizational performance can affect CSR. Accordingly, it indicates that CSR initiatives and firm performance have a bidirectional relationship. Despite many unidirectional studies conducted to examine CSR and firm performance interplay in diverse contexts, studies on bidirectional analyses to test contrasting theoretical standpoints in a single study are rare. However, examining the bi-directional role of CSR is crucial as it provides insights into using CSR as a strategic investment decision within the competitive organizational context. Therefore, this study aims to examine the relationship between CSR and market-based performance as a bidirectional study from an emerging country perspective. Study data was collected from the sustainability/CSR disclosures in annual reports published between 2011 and 2020 by the top hundred companies (identified based on market capitalization) listed on the Colombo Stock Exchange (CSE) in Sri Lanka using judgmental sampling. The CSR was measured using a weighted CSR score assessed based on a comprehensive CSR index with thirty sub-dimensions. Market-based performance was measured using earnings per share (EPS) and firm value, and the control variables were firm size and leverage. The data was analyzed in two phases to examine the two-way linkage between CSR and market-based performance using the fixed effect panel regression technique. The findings concluded that CSR positively impacts market-based performance, confirming the role of CSR as a strategic driver to enhance future profitability. However, the study could not find any bidirectional impact of market-based performance on CSR in an emerging context. Although higher CSR affects higher external performance, higher market-based performance does not affect increased CSR in Sri Lanka. It may be because external performance indicators represent only the future profitability of firms, and these indicators are generally highly volatile over a long period, especially in emerging countries like Sri Lanka.

Edukasi Pasar Modal Bagi Siswa SMK PGRI 2 Kertosono

Investment is investing money into an asset to generate profits. Therefore, it is important to start investing early by educating the younger generation about the capital market so that the future is more secure because they have passive income. Capital market education is an effort to provide knowledge about investing in the capital market. The partner in this community service is SMK PGRI 2 Kertosono, Nganjuk Regency. The activity aims to introduce younger students to investing in the capital market. So they can improve their knowledge and investment skills at an early age for future profits. The activities carried out to achieve this goal are socialization methods, active participation of participants, and direct activity assistance by the service team. After the service activity ends, it is hoped that participants will be able to understand the procedures for trading shares in the capital market and how to analyze and know the risks of investing in shares.

Patient-reported experience is associated with higher future revenue and lower costs of hospitals

BackgroundDespite the established positive association between patient experience and patient volume, the relationship between patient experience and the financial performance of hospitals has not been studied thoroughly.MethodsTo investigate this relationship, we used longitudinal data from 132 Swiss acute-care hospitals from 2016 to 2019 to examine the associations between patient experience and the proportion of elective patients, revenue, costs, and profits of hospitals. To account for a potential time lag effect, we utilized annual patient experience data and employed multilevel mixed-effects regression modeling to investigate its association with the aforementioned financial performance indicators for the following year.ResultsData for private and public hospitals were analyzed both separately and in combination, to account for the different proportions of elective patients in these types of hospitals. The resulting mixed models, revealed that for each year studied, the previous year’s patient experience was positively associated with the current year’s proportion of elective patients (β = 0.09, p = 0.004, all hospitals) and revenue (β = 1789.83, p = 0.037, private hospitals only), and negatively associated with costs (β = − 1191.13, p = 0.017, all hospitals); but not significantly associated with future profits (β = 629.12, p = 0.240, all hospitals).ConclusionsThis analysis showed that better patient experience is associated with a higher proportion of elective patients, greater revenue, and lower costs. Our findings may assist hospital managers and regulators in identifying strategies to increase revenue and reduce costs.

Blocking patents, rent protection and economic growth

We develop a Schumpeterian growth model to analyze the interaction between patent policy and firms' internal strategies to capture value from innovations. We consider two dimensions of patent policy: backward protection against imitation and forward protection, also known as blocking patents, against subsequent innovation that builds on a patented technology. Incumbent patent holders endogenously invest resources to protect their monopoly rents by impeding market entry of innovative competitors. We show that patent policy impacts economic growth through its influence on both the ex ante R&D incentives of potential innovators and the post-innovation rent protection incentives of incumbent firms. Most importantly, our analysis formalizes a novel growth-promoting role of forward protection; by guaranteeing previous innovators a share of future innovators' profits, forward protection reduces the incentive to actively obstruct follow-on innovations. We identify conditions under which the selective use of forward protection can stimulate economic growth through this mechanism.

Deferred taxes in financial institutions: A review of empirical research and the role of tax effects in regulatory capital. Part 2

Subject. This article examines the industry practices of the regulation of deferred taxes in financial institutions. Objectives. The article aims to analyze the significance of deferred taxes for financial institutions (banks, insurance organizations) and determine the role of tax effects in regulatory capital. Methods. The research is speculative. For the study, I used the dialectical method of scientific knowledge, the method of collecting theoretical and regulatory information, the method of formalization, as well as analysis, synthesis, observation, and comparison. Results. The article finds that the preventive nature of the accounting revaluation of deferred tax assets controls the probability of their recovery at the expense of future taxable profits, and therefore they should be included in the regulatory capital. It determines that a full reversal of the active deferred tax position is possible if the accounting assets generate income with the profitability necessary to cover the deductible temporary differences in excess of the balance sheet valuation of the assets. Conclusions and Relevance. At present, the theoretical basis of deferred taxation continues to remain undisclosed. Deferred taxes are an artificial information construct that refines the measurement of assets at fair value. Deferred taxes alone are not able to generate cash flow, they reconcile the tax flow with the financial flow in relation to the fair value of assets in order to show how much value the assets will generate taking into account the current tax situation. The results of the study can be useful to practitioners in the field of deferred tax accounting and banking management, as well as analysts and researchers whose activities are focused on accounting, taxation, and other persons concerned who study the theoretical and financial aspects of deferred taxes.

Relative expression levels of growth hormone gene and growth rate in Indian major carp species.

The phenomenon of growth is a leading factor for aquaculture success. The uneven growth of major Indian carps (Labeo rohita, Catla catla, and Cirrhinus mrigala) is a serious issue in fish culture from an economic point of view. The growth hormone (GH) gene is crucial for selection in commercially cultivated fish species for better growth and production. Indian major carp (L. rohita, C. catla, and C. mrigala) are commonly cultured in Pakistan. The GH expression was examined using qPCR to understand growth in fish species better. Muscle tissue samples (n=480) from 160 individuals of the same age were collected from three species (L. rohita, C. catla, and C. mrigala). Individuals were divided into two groups (high-weight and low-weight groups), cultured under normal conditions. The housekeeping gene β-actin validated GH expression in fast and slow-growing fishes from the same species. Results showed that GH expression varies across species and fish specimens that overweight their counterpart feature have higher GH expression. A selection for overweight fish in the aquaculture breeding systems is preferable as those fish could inherit their genomics to the future cohort, enhancing production, and commercial profit for farmers. Comprehensive research about different growth genes and the environmental aspects that influence fish growth is mandatory. No work has been reported regarding the growth gene analysis of fish from Pakistan. This report was Pakistan's first and baseline study regarding growth analysis of main culturable fish species at the molecular level.

Financial Analysis and Valuation on Tesla, Inc.

Tesla, the frontrunner in the new energy industry for the past decade, operates primarily in clean energy sectors such as electric vehicles and solar energy storage batteries. However, as the new energy market expands, Tesla faces increased competition and industry challenges. This paper analyzes Tesla's current competitive position by examining three key aspects: im-portant accounting policies, financial indicator analysis, and future profitability forecasts, focusing on the company's financial performance in 2022. The findings reveal that Tesla's competitive advantage lies primarily in its significant market share in the global new energy vehicle market. To sustain its exceptional financial performance, Tesla should promptly in-troduce new products to meet growing demand. This study emphasizes the need for Tesla to refine accounting policies to ensure transparency and compliance. Additionally, a careful analysis of financial indicators will enable the company to identify areas for improvement and make informed strategic decisions. Looking ahead, the paper underscores the im-portance of Tesla's future profitability, urging the company to capitalize on market trends and diversify its product offerings. In conclusion, this paper provides a comprehensive eval-uation of Tesla's competitive ability in the new energy industry. To maintain its leadership position, Tesla must adapt to the evolving market dynamics by refining accounting practices, monitoring financial indicators, and introducing new products to meet consumer demand.

Prescriptive price optimization using optimal regression trees

This paper is concerned with prescriptive price optimization, which integrates machine learning models into price optimization to maximize future revenues or profits of multiple items. The prescriptive price optimization requires accurate demand forecasting models because the prediction accuracy of these models has a direct impact on price optimization aimed at increasing revenues and profits. The goal of this paper is to establish a novel framework of prescriptive price optimization using optimal regression trees, which can achieve high prediction accuracy without losing interpretability by means of mixed-integer optimization (MIO) techniques. We use the optimal regression trees for demand forecasting and then formulate the associated price optimization problem as a mixed-integer linear optimization (MILO) problem. We also develop a scalable heuristic algorithm based on the randomized coordinate ascent for efficient price optimization. Simulation results demonstrate the effectiveness of our method for price optimization and the computational efficiency of the heuristic algorithm.

Customer-Centric Dynamic Pricing for Free-Floating Vehicle Sharing Systems

Free-floating vehicle sharing systems such as car or bike sharing systems offer customers the flexibility to pick up and drop off vehicles at any location within the business area and, thus, have become a popular type of urban mobility. However, this flexibility has the drawback that vehicles tend to accumulate at locations with low demand. To counter these imbalances, pricing has proven to be an effective and cost-efficient means. The fact that customers use mobile applications, combined with the fact that providers know the exact location of each vehicle in real-time, provides new opportunities for dynamic pricing. In this context of modern vehicle sharing systems, we develop a profit-maximizing dynamic pricing approach that is built on adopting the concept of customer-centricity. Customer-centric dynamic pricing here means that, whenever a customer opens the provider’s mobile application to rent a vehicle, the price optimization incorporates the customer’s location as well as disaggregated choice behavior to precisely capture the effect of price and walking distance to the available vehicles on the customer’s probability for choosing a vehicle. Two other features characterize the approach. It is origin-based, that is, prices are differentiated by location and time of rental start, which reflects the real-world situation where the rental destination is usually unknown. Further, the approach is anticipative, using a stochastic dynamic program to foresee the effect of current decisions on future vehicle locations, rentals, and profits. We propose an approximate dynamic programming-based solution approach with nonparametric value function approximation. It allows direct application in practice, because historical data can readily be used and main parameters can be precomputed such that the online pricing problem becomes tractable. Extensive numerical studies, including a case study based on Share Now data, demonstrate that our approach increases profits by up to 8% compared with existing approaches from the literature. History: This paper has been accepted for the Transportation Science Special Issue on 2021 TSL Workshop: Supply and Demand Interplay in Transport and Logistics. Supplemental Material: The e-companion is available at https://doi.org/10.1287/trsc.2021.0524 .

Does mandatory tax disclosure mitigate tax expense anomaly? Evidence from FIN 48

Financial Interpretation No. 48 (FIN 48) mandates the disclosure of uncertain tax positions for U.S. public firms. Exploring its impact on market efficiency, we find a reduction in the tax expense anomaly as documented by Thomas and Zhang (2011) for affected firms. The effect is stronger for affected firms with higher disclosure quality, accuracy, and transient institutional shareholding, and it cannot be explained by increased analyst tax forecasts or decreased predictability of tax expenses for future profitability. Our findings suggest that the mandatory tax disclosure under FIN 48 encourages investors to assess the implications of tax information for stock prices.

FEATURES OF INCOME FORMATION OF TELECOMMUNICATIONS MARKET ORGANIZATIONS

The theoretical and methodological research presented in the scientific paper aims to identify the potential growth of the revenue level of participants in the telecommunications market, and the identification of potential opportunities and threats to ensure their economic security in order to define effective directions for the communications industry development in the long run.As a result of the research, based on the identification of potential business opportunities, given the availability of potential and competence resources, it has been established that small participants in the communication market (operators) are not able to provide the appropriate level and continuity of service, therefore a significant part of customers switches to using the services of large market participants (providers), where the largest percentage of service provision is for wired Internet services.The research was conducted on the materials of national telecommunications enterprises’ activities results. The methodical basis of the research was general and special methods, namely: system analysis - for comprehensive consideration of strategic landmarks of telecommunications enterprises’ activity; generalization and scientific abstraction - to study the level of readiness of enterprises for changes in management in the direction of innovative development; statistical analysis (method of standard deviation), synthesis and comparison - for the study of the domestic telecommunications market, in diagnosing the current state and trends of innovative development of domestic telecommunications enterprises, identifying priority development directions of innovative decisions in the direction of a revenue level formation of participants in the telecommunications market. The main aspect of the results approved that an important and global task today for the telecommunication market development remains the implementation of start-ups for the reorganization, reconstruction, optimization and improvement of telecommunication networks, as a result of which there should be an innovative transition to the use of modern switching equipment in the direction of ensuring the high level of service for several numbering zones at once and maintaining accessibility to a wide range of services, which will make it possible to achieve a high level of profitability in the near future.

IMPACT OF ECONOMIC VARIABLES ON IPOs IN INDIA - AN ANALYTICAL STUDY

<p>This article aims to examine the hypothesis that local macroeconomic factors affect the volume of initial public offerings (IPOs) in a rising market, India, between 2015 and 2022. Initial public offerings (IPOs) are shown to have a positive correlation with industrial output and a negative correlation with interest rates. Using co-integration and Vector Error Correction models, we find a long-run equilibrium link between interest rates, industrial output, and initial public offerings (IPOs). Using a Markov regime-switching regression model, we also find that the effect of interest rates on IPO numbers is much more significant in the cold IPO regime than in the IPO hot regime. The empirical result seems to detect the IPO market's trend with a fair amount of accuracy. The findings demonstrate that a hot IPO market regime develops when investors start seeing extraordinarily high early returns, and their expectations about the future interest rate indicate the eagerness of entrepreneurs and managers to enter the IPO market. Conversely, a government's pursuit of monetary tightening causes investors to shy away from the IPO markets because they anticipate future profits will fall owing to rising interest rates and the price of shares will be harmed due to reduced dividend yield.</p><p> </p><p><strong>JEL</strong>: O10, O16</p><p> </p><p><strong> Article visualizations:</strong></p><p><img src="/-counters-/soc/0011/a.php" alt="Hit counter" /></p>

How does economic policy uncertainty shift the firm’s future profitability enhancement through intangible capital?

Purpose This study aims to investigate the effect of intangible capital (e.g. intangible investments and research and development (R&D) expenditures) on future profitability in an emerging economy and the moderating role of economic policy uncertainty (EPU) for companies listed on the Tehran Stock Exchange. Design/methodology/approach To this aim, information about 210 companies during 2014–2021 was collected. This study calculated EPU based on the inflation rate, interest rate, exchange rate and economic growth. Findings The results showed that both R&D expenditures and other intangible investments positively affect future profitability. Moreover, EPU decreases the positive effect of R&D expenditures and other intangible investments on future profitability. Hypothesis testing based on ordinary least squares and generalized method of moments regressions confirmed these results. This study emphasizes the urgent need to adjust how they operate the business during the COVID-19 pandemic. Originality/value The nature and degree of intangible assets and R&D expenditures in firms in emerging markets is an interesting area of research. However, empirical studies in this area have not led to any unanimous conclusion in emerging markets. Moreover, intangible assets and R&D expenditures become very important in the economy affected by the financial crisis and conditions of uncertainties. In light of the COVID-19 crisis, significant changes occurred at all levels and affected accounting-related issues, and the present study highlighted COVID-19. The findings of this research will not only help the managers of companies in developing countries but also, because of the dearth of similar research, they can help managers in developed countries and the global community.