Long-term Financial Decisions Research Articles

The Effect of Student Sharia Financial Literacy on Student Financial Behavior (Case Study of Islamic Economics Students

Behavioral finance is a field of science that combines behavioral and cognitive psychological theory with conventional economics and finance that is useful for explaining why people make irrational financial decisions. Financial literacy is related to everyday life. As in making decisions to save, both short-term and long-term financial decisions. This is the role of literacy in everyday life. Therefore, financial intelligence is the main thing that must be considered in everyday life. The purpose of this study was to determine the effect of Islamic financial literacy on student financial management behavior. The object of this research is 100 students of Islamic Economics at Diponegoro University. Data was collected using a questionnaire which was then processed and analyzed using a simple linear regression method. From the data processing, it is obtained that Islamic financial literacy with dimensions of subjective knowledge about sharia compliance, subjective knowledge of usury and profit sharing on Islamic finance has a significant positive effect on financial behavior with the dimensions of saving behavior, spending behavior, long-term financial behavior, short- term financial behavior.

Financial Literacy to Prevent Poor Borrowing Choices

Working Americans face the new reality of having to fund and manage their retirement while fac- ing rising levels of indebtedness. A basic level of financial knowledge is essential to make good long-term financial decisions. Using the 2015 National Financial Capacity Study, we investigate the impact of financial literacy on the decision to access retirement plan loans before retirement or use one or more high-cost lenders. Our results show that being financially literate reduces the likelihood of using high-cost lenders and using retirement-plan loans. Furthermore, we find evidence of a nega- tive relation between financial literacy and myopic spending.

Determinants of Financial Literacy of Young Adults: Testing the Influence of Parents and Socio-demographic Variables

Acquiring good financial literacy (FL) can be very helpful for a young adult, as it may allow for making informed choices and long-term financial decisions. The research evidence suggests that in general people are less financially literate, which becomes an impediment to making the right form of savings, investment, retirement planning and other such important decisions. The objective of the study is to identify what determines the level of FL of young adults undertaking a management program in India. This study, in addition, examines the effect of parental influence by including three facets of it; namely, parents direct teaching, parents' financial behaviour and parents as role models. Notably, parents' influence is a significant determinant of FL. Among other factors, higher FL was found for male respondents, those with more educated mother, and finance majors.

ENSINO EM ADMINISTRAÇÃO: PROPOSTA DO CONTEÚDO PROGRAMÁTICO DA ÁREA DE FINANÇAS

As Diretrizes Curriculares Nacionais do MEC definem as áreas específicas dos conteúdos de formação profissional que devem ser contempladas na organização curricular dos cursos de graduação no Brasil. Porém não sugerem ou detalham quais conteúdos devem ser oferecidos em cada área. Nesse sentido, o objetivo deste trabalho é propor o conteúdo programático para a área temática de Finanças nos cursos de graduação em Administração. Para o alcance desse objetivo, foram analisados as matrizes curriculares e os planos de ensino das disciplinas de Finanças dos cursos de graduação em Administração, com as melhores notas no ENADE. Com base nesse levantamento, foram elaboradas sete disciplinas com os conteúdos de formação profissional da área, totalizando 560 horas/aula, distribuídas na matriz curricular e de acordo com os seus objetivos: apresentação das finanças corporativas e das finanças pessoais, decisões financeiras de curto e longo prazo, análise econômica financeira, planejamento financeiro e estratégias financeiras.

THE INTERACTION OF WORKING CAPITAL MANAGEMENT AND PROFITABILITY MEASURES

Abstract In this article, the interaction between working capital management success and different measures of profitability was examined. When components of net working capital are kept at optimal levels, this situation benefits company to use resources more efficiently and helps profitability. Similarly, high levels of profitability helps avoiding idle working capital practices. By using a sample consisting of 172 non-financial companies traded Borsa Istanbul (BIST) in Turkey, and 5-year data covering 2009-2013, regressions were run to analyze how profitability affects working capital management which is measured in terms of Cash Conversion Cycle (CCC) and also how CCC affects profitability measures. Most of the alternative cases tested have given significant results. Decreasing CCC affect positively profitability measures. Similarly, improved level of profitability helps a better working capital management and affects inventory turnover, receivables collection and payable deferral. Although long-term financial decisions and policies have an important role in the sustainability and profitability of the companies, short-term financial management and working capital management which is the most important policy in this sense can also have a profound effect on the company success. Keywords: Working capital, profitability, liquidity Jel Codes: G30, L25, C23

A specific accounting approach for public universities

Many universities in Germany and other countries have introduced financial (or commercial) accounting to manage effectively their finances. It aligns with so-called new public sector management reforms worldwide. In this paper we analyze whether the components of this type of financial accounting reform suit the nature and objectives of German public universities. While the analysis mainly relates to the German situation, there are likely to be implications for public universities universally. Drawing on an analysis of the reports of two well known German-speaking universities, Heidelberg and Vienna, we analyze whether the components of the new financial accounting reforms suit the nature and objectives of those public universities. While we argue that cash-flow statements and balance sheets remain important, it is shown that it is necessary for state-run educational institutions to change several key elements of traditional commercial accounting. Because the success goals of such universities are non-profit-oriented, their financial accounting should be augmented by a ‘change in value statement’, replacing the traditional income statement. As their valuation cannot be correlated with the definition of profit in (German) public universities this term is suggested. By change in value we mean specifically that assets may experience a total loss or a decrease in value. In management accounting output measures and performance indicators should substitute revenues as the counterpart of costs. Furthermore, long-term financial decisions play a crucial role in universities. Therefore, a form of investment accounting is very important for them. The conventional form has to be modified by ‘investment statements’ and ‘knowledge balances’ of their intellectual capital. In this paper we also show how the concept of a balanced scorecard can be applied to public universities and how specific accounting instruments can be integrated into it.

Long-Term Financial Decisions Based on an Example of a Window Manufacturing Company

In the following paper a ratio analysis is performed for a window manufacturing company using its publicly available financial statements for the year 2011 in order to suggest some adequate long-term financial strategy.

Working Capital Management Efficiency of Cement Sector of Pakistan

The corporate finance literature has traditionally focused on the study of long-term financial decisions. Researchers have particularly examined investments, capital structure, dividends or company valuation decisions, among other topics. However, short-term assets and liabilities are important components of total assets and needs to be carefully analyzed. Management of these short-term assets and liabilities warrants a careful investigation since the working capital management plays an important role for the firm’s profitability and risk as well as its value. It requires continuous management to maintain proper level in various components of working capital i.e. cash, receivables, inventory and payables etc. The present study is an attempt to evaluate the efficiency of the working capital management of cement sector of Pakistan for the period 1988-2008. Instead of employing the traditional ratios; working capital efficiency has been measured in terms of utilization index, performance index and total efficiency index as suggested by Bhattacharya (1997). This paper also tests the speed of achieving the target level of efficiency by an individual firm during the period of study using industry norms as the target level of efficiency. Findings of the study indicate that the cement sector as a whole did perform well during the study period.

Do Security Analysts Reduce Noise?

This study investigates the role of security analysts in reducing noise in stock price fluctuations. Using a sample of analyst coverage initiations between 1984 and 2006, the study finds that (1) noise is significantly reduced in the year following the initiation and (2) the extent of the noise reduction is a function of the intensity of analyst coverage during the initiation year. The results suggest that analyst coverage makes stock prices less noisy. Analysts’ noise-reducing ability can have positive consequences for the performance of corporate and portfolio managers who rely on forecasting to make long-term financial decisions.

The Role of Self‐Regulation, Future Orientation, and Financial Knowledge in Long‐Term Financial Decisions

This research examines potential explanations of why consumers have difficulty making personal financial decisions that will be most beneficial in the long run. Within the decision context of retirement savings, results from an experiment suggest that self‐regulatory state, future orientation, and financial knowledge can influence consumer evaluations and intentions related to retirement investments (i.e., a 401(k) plan). Findings suggest that consumers who express higher levels of future orientation are more likely to participate in a retirement plan, an effect moderated by self‐regulatory state. Results also suggest that financial knowledge and orientation toward the future can interact to influence the likelihood of 401(k) plan participation. Among consumers with a basic level of financial knowledge, future‐oriented consumers expressed a greater likelihood to participate in a retirement plan than less future–oriented consumers. However, in the absence of knowledge, consumers’ orientation toward the future did not influence the likelihood of 401(k) plan participation.

"Capital Investment and Financial Decisions."

CAPITAL BUDGETING. The Goal of the Firm. Capital Budgeting: An Overview. The Economic Evaluation of Investment Proposals. Net Present Value Versus Internal Rate of Return. Using Cash Flows to Evaluate Investments. Traditional Measures of Investment Worth. Managing Working Capital. RISK AND UNCERTAINTY. Foundations of Risk Analysis. Measuring Risk. Applications of Risk Analysis. Decreasing Risk by Diversification: The Portfolio Approach. The Capital Asset Pricing Model and Arbitrage Pricing Theory. LONG-TERM FINANCIAL DECISIONS. Financial Leverage. Capital Structure and Valuation. Bankruptcy Risk and the Choice of Financial Structure. Defining the Cost of Capital. Measuring the Cost of Capital. Dividend Policy. Options and Futures. The Lease or Buy Decision. Mergers. International Financial Management. Appendices. Index.