Interest Earnings Research Articles

PENGARUH FIXED ASSETS TURNOVER, QUICK RATIO DAN TIMES INTEREST EARNED TERHADAP RETURN ON ASSET PADA PERUSAHAAN SUB SEKTOR PROPERTY DAN REAL ESTATE YANG TERDAFTAR DI BURSA EFEK INDONESIA PERIODE 2013-2017

In develoving national economy, property sector has an important role. This sector is as strategic as other sectors, such as agriculture, industry, trade, services, and others. Property with a focus in the field of housing and construction is one of the sectors absorbing large amounts of labor and the multiplier effect is quite long. Therefore, this sector has big effect to support the development of economy sectors. This research aims at testing and analyzing the effect of Fixed Assets Turnover, Quick Ratio, and Times Interest Earned on Return On Asset on sub-sector company of property and real estate registered on Indonesia Stock Exchange in 2013-2017 period. Data analyzing was done by Software SPSS 22. Method of data analysis used is descriptive statistics, classic assumption test, multiple linear regression analysis and hypothesis testing (partial test, simultaneous test and coefficient of determination). The results of the study prove that each (partial) shows that Fixed Assets Turnover has no significant effect. Quick Ratio has no significant effect. Times Interest Earned has a positive and significant effect. Simultaneously, the variables Fixed Assets Turnover, Quick Ratio, and Times Interest Earned have a positive and significant effect on Return On Assets, with a coefficient of determination of 59.2%. The remaining 40.8% is the influence of the variables described outside in this study.

Does focus strategy work? A study of bank loan portfolios in Indonesia

PurposeThe purpose of this paper is to determine the impact of loan concentration on the returns of Indonesian banks and examines whether bank ownership types affect the relationship between concentration and returns.Design/methodology/approachThis research uses heuristic measures of concentration: The Hirschman–Herfindahl index and Deviation from Aggregated Averages are applied to Indonesian banks across all sectors. The data covers the pre and post global financial crises periods from 2003-2011 for 109 commercial banks in Indonesia. Panel feasible generalised least squares analysis was applied.FindingsThe findings show that loan concentration increases bank returns. The positive effect of concentration on returns tends to be more significant for domestic-owned banks. In addition, the interaction effect shows that the positive effect of concentration on returns is less for foreign-owned banks.Research limitations/implicationsThe Indonesian central bank changes to the reporting format of sectoral loan allocation by banks since 2012 in terms of the Indonesian Banking Statistics Details of Enhancement matrix requires separate data analysis for 2012 onwards. The findings of this paper could be enhanced by more detailed data like interest rate expenses and bank level sectoral non-performing loans data.Practical implicationsThe findings suggest that a focus strategy provides better returns. Moreover, bank ownership types is an important factor to consider when setting a bank lending policy.Originality/valueThis paper is among the few studies where different measures of loan concentration in combination with measures of return are applied in Indonesia as an emerging Asian country. The research also provides evidence of the impact of concentration on the interest earnings of the loan portfolios of banks in addition to return on assets and return on equity that are generally applied as measures of return in previous research.

Liquidity Trap: the Brazilian version

<p>The goal of this paper is to provide an interpretation about the sky-high real interest rates in Brazil. We use Keynes’ argument regarding liquidity trap to identify the forces trapping interest rates, but in Brazil they are trapped at very high levels instead of at the zero-lower bound discussed in Keynes’s <em>General Theory</em>. Rentiers, in Brazil, influence the Brazilian Central Bank to obtain very liquid assets in the form of Financial Treasury Bills (LFTs) while keeping high interest earnings. In this case expansionary fiscal policies will have a limited impact on output, given the resulting high debt levels and debt service, but will imply significant income transfers to the rentiers. This means that aggregate demand and income will be less sensitive to fiscal stimuli, but the distribution of income will be biased toward the rentiers. </p><p> </p>

PENGARUH CASH RATIO, TIME INTEREST EARNED DAN DEBT TO EQUITY RATIO TERHADAP PROFITABILITAS (ROE) PADA PERUSAHAAN PERBANKAN YANG TERDAFTAR DALAM BEI PERIODE 2013-2017

Financial performance can be measured by Return on Equity (ROE), because ROE is one of two base factors to determine company’s level of profit growth. A company can be identified success if the cash turnover is increasing along the certain financial period. If liquidity is increasing then the profit will increase because the changed value of current assets is getting increased by company’s current liabilities enchancement. The sample of research is 32( thirthy two companies ) Data collection method is using documentation method Data analysis thechnique used is descriptive quantitative analysis. Analysis model in this research is double linear regretion and using SPSS program. Data tested by classic assumption test, coefficient determination test, F test, and T test. The conclusion of this research both partial and simultaneous Cash Ratio ,Time Interest Earned, Debt to Equity Ratio are not influential to Return on Equity. The result of R coeffition determination is 7,3%. So this 7,3% variation of variable ROE can be explained by variation variable Cash Ratio ,Time Interest Earned, Debt to Equity RatioKeywords: ROE, Cash Ratio, Time Interest Earned, Debt to Equity Ratio

Impact of Credit Risk Management Systems on the Financial Performance of Commercial Banks in Uganda

The paper is set to analyse the impact of credit risk management on the financial performance of commercial banks in Uganda for a period of 2006–2015 using panel data for a sample of 20 commercial banks. The study employs return on assets as a dependent variable and non‑performing loans, growth in interest earnings and loan loss provisions to total loans as credit risk measures. Secondary data is sourced from the Bank scope database, African development bank and the central bank of Uganda. The study employs descriptive statistics, regressions and correlation analysis. Regression models are to estimate the magnitude of significance of credit risk management on the performance of commercial banks in Uganda. The study revealed that credit risk management impacts on the performance of Ugandan commercial banks. The results portrayed that banks’ performance was inversely influenced by non‑performing loans which may expose them to large magnitudes of illiquidity and financial crisis. Thus given such results, the researcher recommends that banks need to enhance their credit risk management techniques not only to earn more profits but also to maintain a qualitative asset portfolio and attention be given to non‑performing loans, loan loss provision to total loans and growth in interest earnings that were found to be significant. Banks need to design appropriate credit policies that must handle all necessary conditions before advancing credit to their customers and also develop strong credit administration committees and teams that must conduct appropriate and sound loan appraisal evaluations and which must also monitor the loans throughout the required processes right from extending a loan to a customer up to the completion of loan repayments so as to mitigate credit risks.

Excess Real Interest Rates and the Inflation Targeting Regime in Brazil: Monetary Policy Ineffectiveness and Rentiers’ Interests

Brazil has had, since the middle 1990s, one of the highest real interest rates in the world, yet not one of the lowest inflation rates. By the end of that decade, an inflation targeting regime (ITR) was introduced. Real interest rates have remained extremely high for international standards, while macroeconomic performance has been dismal on the same grounds. This article argues that these results can be explained by, among others reasons, pressures from the rentiers to frame monetary policy in a way to sustain very high interest earnings in a context where inflation is not very sensitive to monetary policy instruments. Under the ITR, the interest rate seems to have been kept above what would be required to maintain low inflation under normal conditions (even if one assumes a demand-pull inflation, which is not necessarily the case), with a potentially negative impact on growth and employment. This is interpreted as an indicator of monetary policy ineffectiveness. On the empirical ground, this article compares interest rate, inflation, unemployment, and real output growth for Brazil with both ITR and non-ITR countries selected by judgment sampling.

MEMAHAMI REKSADANA SYARIAH: INSTRUMEN KEUANGAN BERBASIS SYARIAH

In finance, investment is buying or creating an asset with the expectation of capital appreciation, dividends (profit), interest earnings, rents, or some combination of these returns. This may or may not be backed by research and analysis. Most or all forms of investment involve some form of risk, such as investment in equities, property, and even fixed interest securities which are subject, among other things, to inflation risk. A mutual fund is simply a financial intermediary that allows a group of investors to pool their money together with a predetermined investment objective. The mutual fund will have a fund manager who is responsible for investing the pooled money into specific securities (usually stocks or bonds). The ruling with regards to mutual funds from an Islamic perspective can be determined by understanding the Shar’i ruling on shares and bonds.

Monetary policy and alternative means of payment

Abstract This paper captures the trade-offs between alternative payment instruments where each is associated with costs and benefits. Most models of cash–credit choice assume cash is a safe non-interest-bearing asset and credit is interest-bearing but costly. Here, I consider the risk of loss from using cash resulting from theft and foregone interest earnings. I use a cash-in-advance model to analyze the channel through which monetary policy could have a positive impact on the economy by altering the incentives for cash–credit choice. The model indicates that although expansionary monetary policy increases total consumption, the resulting substitution toward credit might increase transactions cost, which may not result in improving welfare. The net effect depends on the change in transactions cost of using credit relative to the responsiveness of theft to inflation. The assumption of fixed cost of credit is crucial to these results. Calibration of the model to the US and Polish economy confirms the results.

Colonial New Jersey's provincial fiscal structure, 1704–1775: spending obligations, revenue sources, and tax burdens during peace and war

I reconstitute the spending obligations and revenue sources of colonial New Jersey's provincial government for the years 1704 through 1775 from primary sources using forensic accounting techniques. I identify and analyze the methods for raising revenue to meet normal peacetime and emergency wartime expenses. I calculate the provincial tax burdens imposed on New Jersey's citizens. I identify how Britain interfered with New Jersey's fiscal structure. I estimate what the revenues and tax burdens would have been without this interference. New Jersey paid for war expenses by issuing bills of credit, spreading the tax burden of redeeming these bills into the future. New Jersey paid its yearly administrative costs with current property taxes and with current interest earnings from loaning paper money. In the absence of British interference and wars, New Jersey could have driven tax burdens to zero by using interest earnings to pay for all its provincial administrative costs.

A Study of Liquidity and Interest Spread in Nepalese Cooperative Societies

The study has inquired about the determinants liquidity risk and investment risk which are measured by liquid assets to deposit ratio and average interest spread respectively of Nepalese cooperative society. We did descriptive, correlation, and regression analysis of five year accounting data of 126 cooperatives of Kathmandu valley. The descriptive statistics show a huge gap between cooperatives with respect to size, earnings, activities, etc., and suggest that the cooperatives should be ranked and categorized according to their size so that a prompt regulation can be imposed to them. The significant positive correlation of deposit with variables such as investment, net earnings, size, liquid assets, interest earnings, interest expenses, etc. suggested deposit marketing is the most crucial instrument to build up size, to generate revenue and earnings, to increases the activities, etc. The finding from regression analysis show that the big sized cooperatives are lacking proper amount of liquidity, and suffering from liquidity risk. Moreover, the finding also suggests that strong permanent capital base have significant positive influence on adequate liquidity of the cooperatives. Similarly, cooperatives having higher credit to deposit ratio have liquidity deficit. The spread model suggests that cooperative bearing higher amount of investment risk are utilizing its assets efficiently, and holding an adequate amount of long term source of fund. Similarly, a big sized cooperative has abided with lower degree of investment risk.

Growth Performance Analysis - A Comparative Study Between SBI and HDFC Bank Limited

The paper compares the growth performance of SBI and HDFC Bank in terms of affiliation and association between earnings and growth performance indicators for the period from 2005-06 to 2014-15 using secondary data with the application of descriptive methods of statistical analysis including multiple regressions. In view of the fact that the growth performance of the banking sector is straightforwardly connected to the economy but it is estimated to have slow down remarkably because of ongoing crisis in Europe and economic slowdown in the United States. Hence the research paper is an effort to study the Growth rate in SBI and HDFC Bank limited as both the banks are giant banks in public and private sector, so a Comparative study of Growth analysis of both the banks for a period of 10 years is made. The main parameters of growth in banks are Reserve and Surplus growth (RES), Advance growth (ADV), Investment growth (INV), Interest Earned growth (IE), Operating Expenses growth (OE), Equity Dividend growth (ED), Net profit growth (NP) and EPS growth (EPS) and Descriptive statistics shows that the growth performance of HDFC bank is very pleasing than SBI during the period under study and the multiple regression test results reveal that in terms of the parameters defined HDFC Bank has performed much better than SBI Bank.

A Study of Liquidity and Interest Spread in Nepalese Cooperative Societies

The study has inquired about the determinants of liquidity risk and investment risk of Nepalese cooperative society. The risks are measured by liquid assets to deposit ratio and average interest spread respectively. We did descriptive, correlation, and regression analysis of five year accounting data of 126 cooperatives of Kathmandu valley. The descriptive statistics show a huge gap between cooperatives with respect to size, earnings, activities, etc., and suggest that the cooperatives should be ranked and categorized according to their size so that a prompt regulation can be imposed to them. The significant positive correlation of deposit with variables such as investment, net earnings, size, liquid assets, interest earnings, interest expenses, etc. suggested deposit marketing is the most crucial instrument to build up size, to generate revenue and earnings, to increases the activities, etc. The finding from regression analysis show that the big sized cooperatives are lacking proper amount of liquidity, and suffering from liquidity risk. Moreover, the finding also suggests that strong permanent capital base have significant positive influence on adequate liquidity of the cooperatives. Similarly, cooperatives having higher credit to deposit ratio have liquidity deficit. The spread model suggests that cooperative bearing higher amount of investment risk are utilizing its assets efficiently, and holding an adequate amount of long term source of fund. Similarly, a big sized cooperative has abode with lower degree of investment risk.

Do Opposites Detract? Intrahousehold Preference Heterogeneity and Inefficient Strategic Savings

This paper uses a field experiment to test whether intrahousehold heterogeneity in discount factors leads to inefficient strategic savings behavior. I gave married couples in rural Kenya the opportunity to open both joint and individual bank accounts at randomly assigned interest rates. I also directly elicited discount factors for all individuals in the experiment. Couples who are well matched on discount factors are less likely to use costly individual accounts and respond robustly to relative rates of return between accounts, while their poorly matched peers do not. Consequently, poorly matched couples forgo significantly more interest earnings on their savings. (JEL D13, D14, J12, O12)

Optimal Interest Rates in Cooperative Banks with Non-member Customers

Previous attempts to understand the functioning of cooperative banks have often considered them as being similar to credit unions. However, we argue that credit unions are only a subset of co-operative banks and the models used to describe their behavior cannot be generalize to all co-operative banks. There is an important factor that characterizes the behavior and outcomes of co-operative banks and that do not apply to credit unions: the role of non-members and their contribution to the over-all welfare of members through deposits and interest earnings for the bank. In this paper, we move from a model developed to describe the pricing policy on interest rates of credit unions and we propose a more general model by incorporating non-member depositors and borrowers, who play a key role in the interest rate determination of co-operative banks.

The Possibilities of Difference Analysis Utilisation in Profit Rate Assessment

The main aim of this article is the application of selected methods of difference analysis to the chosen profit indicator of Return on Equity (ROE). First, the importance of the ROE indicator is described in the paper and then, also, the possible methods of pyramidal decomposition in multiplicative structures – ie. the method of gradual changes, the decomposition method with residue, the logarithmic method and the functional method. The pyramidal decomposition of the ROE top indicator is implemented using the functional method, the only one that can be used in the case of a negative volume index indicator and, at the same time, this method is not sensitive to the order of the factors. In conclusion, the assessment of the impact of partial analytical indicators of pyramidal decomposition on the top analysed indicator of ROE is accomplished. The degree of various influences of sub-indicators on the ROE top indicator, in the analysed periods, was different. The ROE indicator was most affected by the Sales Profitability indicator on the second level of decomposition. In the first and last assessment periods, the Sales Profitability indicator was determined by the Cost Efficiency indicator, in the first, and in the second period, by the cost of sales indicator. The partial factor Financial Leverage affected the ROE the least within the assessment period. The Tax Earnings Reduction indicator following the Interest Earnings Reduction indicator presented the stronger influence on the ROE after the Financial Leverage indicator.

20세기 이후의 세계대공황에 관한 고찰

I'd like to inquire into the causes of the global depressions and the responses to them since the 20th century. Not a few the past researches about economic crises were restricted to the specific times case by case. Therefore they were unable to suggest a proper logic to be commonly applied to several global panics; the 1930s, the 1979s and the late 2000s. Based on this critical mind, this paper investigated how K. Polanyi's opinion about capitalism can be applied to every global panics. Many existing articles about economic crises were based on the Business Cycle Theory and the Marx's Panic Theory. Accepting these two theories critically, I made an attempt how K. Polanyi's view about capitalism is available and holds good for us to understand not only the 1930s' depression but 1970s' and the late 2000s' economic crises. Contrary to a lot of goods produced by labors, these three commodities - labor, land and money - are not produced for the purpose of sales. Nevertheless, if these elements are incorporated into the market mechanism by force, the capitalist system cannot help falling into confusion. The conclusions from my investigation about three global economic crises are as follows. Firstly, I accept the Marx' opinion that economic panics basically occur from the excessive capital of various forms. As labor intensive industries transfer capital intensive ones, employment and consumption stagnate relatively and are not able to accompany with the transformation. The excessive capital rises from the firms' insufficient investment. Secondly, the widening gap between the rich and the poor do bring economic crisis and deepen the trough of it. The wage of labors improves economic growth through consumption directly, but the profits and interest earnings of firms can contribute to it just indirectly through savings-capital formation path. Thirdly, a economic crisis is closely related with the financial confusion like monetary stringency rather than a recession of business cycle. All of three global depressions as above were based on financial crises in common. Especially the depression of the late 2000s originated in the global and liberal transfer of money capital since 1970s. Fourthly, an important cause of Great Depression of 1930s was the weakness of agriculture or the inelastic demand to grain, and the stagflation in 1970s was closely related to oil crisis. Agricultural products and oil are products from land in common. These two elements must not be transacted in market system indiscreetly. Otherwise economic depression could be broad and deep more and more. Fifthly, as we can find out from the depression in the late 2000s, household expenditure and firm investment lost their intrinsic powers of economic growth. Because of the liberalization of global transfer in money capital a tremendous scale of floating money moved into the USA, a key currency nation. The great excessive money conspired with housing speculation abnormally. If all nations are unable to secure individual discretions related to economic policy as in the case of international transactions in money capital, a financial or economic crisis could rise and broaden all over the world. The Polanyi's view that the economic crises of capitalist system are closely connected to three elements - land, labor, and money - holds good as ever and is more comprehensive than the Business Cycle and the Marx's Panic Theory. Capitalist economy is based on the rule of market. But several proper protective measures for three elements are absolutely necessary against economic panics and for evading social catastrophe.

Measurement of Capital Flight: Methodology and Results for Sub‐Saharan African Countries*

Abstract: This paper presents the methodology for the computation of capital flight and reports new estimates of the magnitude and timing of capital flight from 33 sub‐Saharan African countries from 1970 to 2004. Our methodology calculates capital flight as the residual difference between inflows and outflows of foreign exchange recorded in the balance of payments, with corrections for the magnitude of external borrowing, trade misinvoicing, and unrecorded remittances. We find that total capital flight from these countries in this period amounted to $443 billion (in 2004 dollars). With imputed interest earnings, the accumulated stock of flight capital amounted to $640 billion. These numbers exceed these countries’ external debts, which in 2004 amounted to $193 billion, indicating that sub‐Saharan Africa is a net creditor to the rest of the world.

Bank productivity in China 1997–2007: Measurement and convergence

This study examines the productivity growth of the nationwide banks of China and a sample of city commercial, banks for the ten years to 2007. Using a bootstrap method for the Malmquist index, estimates of the total factor productivity growth are constructed. Five different models of inputs and outputs based on variants of the Intermediation and Production approaches and non-performing loans are treated as a bad output, are examined for the purpose of arriving at a robust measure. The productivity growth of the state-owned commercial banks (SOCBs) is compared with the joint-stock banks (JSCBs) and city commercial banks (CCBs). In general, average TFP growth has been neutral over the period for the SOCBs and JSCBs but positive for the CCBs in the second part of the period. Efficiency gains (catch-up) were obtained through cost reduction and technical innovation was associated with greater diversification of revenue away from interest earnings. The opening up of the banking market has not led to a discernible improvement in bank productivity growth.

Initial Day Return and Underpricing Cost in Advance Payment Initial Public Offerings

Hong Kong represents the second largest of the initial public offering (IPO) markets that adopt an advance payment subscription procedure. The lengthy process creates substantial financing costs to investors but interest earnings to issuers. Data from a sample of 386 IPOs listed between 2000 and 2007 reveals that interest cost can reduce the return to public subscribers by 44%; while the HIBOR-based interest earnings to issuers are estimated at 0.59% of funds raised, and at 6.27% of forecast earnings. Consistent with Agarwal, Liu, and Rhee (2008), the realized subscription rate strongly influences returns but the link weakens at higher interest rates. Interest earnings and underpricing are highly correlated, a finding in support of Chowdhry and Sherman’s (1996) proposition. However, the proposition is deemed irrefutable as both underpricing and interest earnings are highly related to the subscription rate. Moreover, regression results show that the relationship between the subscription rate and offer price of H-shares and red-chips are indistinguishable from other issues. These results cast doubt on the common conjecture that the management of China-related enterprises are more likely to underprice their offerings than the managers of other enterprises. The higher returns to H-shares and red-chips can be attributable to the higher public demand for large issues.

The Likely Impact of the U.S. Recession on Negotiations with North Korea

IntroductionThe last six-party talk in Beijing ended on December 11, 2008, when negotiators were unable to reach an agreement on the issue of verification over the accuracy of the nuclear inventory given by North Korea in June 2008. The sticking point was North Korea's refusal to let international inspectors take samples from soil and waste at its nuclear facilities, which the United States had maintained was critical to reach an agreement. Complicating the issue, however, is the rapidly declining U.S. economy, as indicated by the real gross domestic product (GDP) that fell rapidly beginning in the fourth quarter of 2008. This paper reviews the state of the U.S. economy, measuring how serious the economic recession is, and then speculates on how the state of the U.S. economy may affect the future of negotiations with North Korea. The paper concludes with some suggestions on the direction North Korea and the United States might consider taking in the middle of the U.S. economic recession.History of the Credit Crunch of 2008Although there is no consensus on its exact duration, the beginning of the is believed to be in the early 1980s. The good times of the Great Moderation are characterized by significant reduction in fluctuations and improvements in aggregate output, employment, and inflation. for the Great Moderation include (a) improved monetary policy, (b) financial innovation, (c) increased global integration, (d) better inventory controls, and (e) good luck in the form of smaller exogenous shocks. As Federal Reserve Chair Ben S. Bernanke opined during his discussion of the Great Moderation at the 2004 meetings of the Eastern Economic Association, Explanations of complicated phenomena are rarely clear cut and simple, and each ... probably contains elements of truth.1 It may be premature to give credit to any or all of these explanations. It is yet to be known whether the latest Great Moderation is in a temporary halt or is over until the next Great Moderation appears on the horizon many years from now. The end of the Great Moderation did not begin with subprime mortgages. The end started long before the Great Moderation even began.Securitizing mortgages in the United States has a long history. 1968, the Government National Mortgage Association (Ginny Mae) was allowed to securitize FHA/VA mortgages backed by the U.S. government for resale in a secondary market. 1970, the Federal Home Loan Mortgage Corporation (Freddie Mac) started selling government-backed mortgage-backed securities (MBS). One writer noted, In 1981, the Federal National Mortgage Association (Fannie Mae) began issuing MBS, and soon after 'private-label' securitized products emerged for prime loans without the backing of the government.2 1982, the Alternative Mortgage Transaction Parity Act allowed variable-rate mortgages as an alternative to fixed-rate mortgages. 1986, the Tax Reform Act ended tax deduction for interest on loans with the exception of mortgage loans. All these changes played a role in leading to the 2008 credit crunch. It is important to note that these changes, standing alone, are nothing wrong. But they were abused during the early years leading to the 2008 credit crunch.During the Great Moderation of the 1990s and the early part of the 2000s, the rate of inflation was low and the economy grew steadily. During the same period, countries in Asia and the Middle East started to save an enormous amount of money. From 1996 to 2007, industrialized countries went from a current account surplus of $14 billion to a current account deficit of almost $500 billion. At the same time, noted a White House report, developing countries went from a current account deficit of $82 billion to a surplus of $760 billion.3 The influx of this capital lowered interest rates. These new wealthy were not satisfied with low interest earnings, and they searched for high-yielding assets. …