Cash Outflows Research Articles

Does Corporate Diversification Increase Shareholder Value? The Case of Taiwan

We consider the effect of reinvestment on shareholder value to answer whether diversification decreases or increases shareholder value. We build static panel regression models for the sample of 1189 Taiwanese firms for 2009-2019. We also account for dynamic features associated with shareholder value and utilize Generalized Method of Moments estimates for a dynamic panel. There is robust evidence that reinvestment activity adds shareholder value. We also argue that current reinvestment activity leads to higher values of the closing price. Analysis reveals that the interaction effect of the normalized value of cash outflow and firm size leads to higher excess returns.

PENGUKURAN KINERJA KEUANGAN BERDASARKAN LAPORAN ARUS KAS PADA KOPERASI PEGAWAI REPUBLIK INDONESIA KABUPATEN ENDE TAHUN 2017 - 2019

The purpose of this study is to examine and analyze the financial performance of cooperatives in the Ende regency of Indonesia from 2017 to 2019. This study is descriptive in nature. Documentation and interviews were utilized to obtain data. Cash flow ratio analysis was used in the data analysis, which included the following cash flow ratios: operating cash flow ratio, fund flow coverage ratio, cash to interest coverage ratio, cash coverage ratio to current liabilities, capital expenditure ratio, total debt ratio, cash flow coverage ratio, and free net cash flow ratio. The findings of this study show that the financial performance of cooperatives Pegawai Republik Indonesia, Ende Regency in the years 2017 – 2019 was generally poor because of the eight cash flow ratios used, only two of which meet the standards above one, namely cahs to interest coverage ratio and free net cash flow ratio, while the other six are below standard one, namely operating cash flow ratio, fund flow coverage ratio, cash coverage ratio to current liabilities, capital adequacy ratio, capital adequacy Cooperative management has been unable to control the flow of cards and must enhance cash inflows while decreasing cash outflows.

ANALYSIS OF REVENUE AS REPORTED IN THE ENTERPRISE’S FINANCIAL STATEMENTS

Enterprise’s financial statements may be defined as structured presentation of the information about the financial position, financial performance and cash flows in the form of: assets; liabilities (payables); equity; revenue; expenses; cash inflows, outflows and net cash flows. Based on this information, one could analyse revenue and expenses, financial performance, financial position, cash flows and effectiveness of the overall business of the enterprise.
 The object studied in this publication refers to the revenue of enterprises, which apply the national accounting basis of the Republic of Bulgaria – the National Accounting Standards, and its subject – to the specific directions of the analysis and the methodologies for revenue analysis.
 The aim of this publication is to present the plenty of opportunities and methodological directions of the revenue analysis as reported by the enterprise’s financial statements, and in particular, the Statement of revenue and expenses.
 The data in the enterprise’s Statement of revenue and expenses may be used for analysis in the following methodological directions: overall evaluation of revenue; analysis of costs per revenue of BGN 100 (revenue effectiveness); analysis of net sales; analysis of revenue-based return with regard to the revenue effectiveness; analysis of net sales-based return (return of sales); analysis of return on the basis of net sales of products with regard to the total cost per products of BGN 100.
 In terms of the overall evaluation of enterprise’s revenue, their amount, composition, structure and dynamics are subject to analysis. Such analysis is aimed at identifying the change of revenue – in aggregate, by groups and specific types of revenue, for the current period in comparison to the reference period, both as an absolute and as a relative value. For management purposes, one can identify the average growth and increase rates of revenue for a long time period, characterise their development trends, forecast the expected sales, etc.
 When analysing the costs per revenue of BGN 100, one can identify the impact of the direct factors on the dynamics of this indicator. In their nature, these are the total amounts of costs and revenue of the enterprise. Their impact may be broken by groups and by specific items of enterprise’s costs and revenue. Therefore, one could define the impact strength and direction of any item of costs and revenues on the dynamics of revenue effectiveness. Based on the obtained information, the enterprise’s management is able to make timely, objective, justified and proper decisions for the management of enterprise’s revenue and its effectiveness.
 Costs per revenue of BGN 100 are directly related to the net revenue-based return. Therefore, the factors that affect the change of the indicator that characterises revenue effectiveness, have impact on the change of revenue-based return.
 The date from the Statement of revenue and expenses may be used to analyse the amount, composition, structure and dynamics of net sales. The opportunity to identify the profit from sales of products, goods and/or services in aggregate, and, on this base, to calculate the net sales-based return – an indicator that characterises the effectiveness of the enterprise’s operations, is crucial for the management.

Using financial diaries to understand the economic lives of HIV-positive pregnant women and new mothers in PMTCT in Zomba, Malawi.

BackgroundEconomic strengthening (ES) interventions can address economic barriers to retention and adherence (R&A) to antiretroviral therapy in prevention of mother-to-child transmission (PMTCT) services. To inform tailoring of ES activities for PMTCT, we used financial diaries to understand the economic lives of women in PMTCT and examine associations between participants’ finances and their R&A.MethodsWe collected financial data from a stratified sample (n = 241) of HIV-positive pregnant women and new mothers enrolled in PMTCT from three clinics in Zomba, Malawi. For 30 weeks, participants met with staff to record cash and in-kind inflows and outflows. We used clinical records to calculate a measure of R&A for each participant. We summarized diary data using R and used cox proportional hazard models to examine the relationship between R&A and participant characteristics and behavior.ResultsThere were 68,097 cash transactions over 30 weeks, with 10% characterized as inflows. The median value of cash inflows was US$3.54 compared with US$0.42 for cash outflows. Fewer than 7% of total transactions were considered related to PMTCT, with the majority classified as food or drink. Participants in the rural site had the lowest hazard of non-adherence. Decreased hazard of non-adherence was also linked to having dependents and years on ART. There were significant differences in cash inflows and outflows between those who were always adherent and those who were not.ConclusionsFinancial inflows were large and erratic, whereas outflows were small but consistent. PMTCT expenses comprised a small proportion of overall expenses and focused on proper nutrition. The influence of inflows and outflows on adherence was significant but small; however, always adherent participants demonstrated smoother inflows and outflows, indicating an association between greater adherence and economic stability. Participants would benefit from interventions that bolster and stabilize their economic lives, including income generating activities in the agricultural industry and inclusion in village banks.

Surviving and growing in the post-Covid world: the case of Indian hotels

PurposeAs the world tries to come to terms with the exact economic and human cost of the Covid-19 pandemic, businesses are trying to discern and act on the implications of the “new normal” in order to survive and grow. Amongst all the industries impacted by the Covid-19 pandemic, travel and tourism has been the hardest hit. Operators across the value chain are trying to innovate and improvise in order to mitigate the impact of the pandemic on cash flows and working capital. The primary purpose of this paper then is to take a closer look at the measures adopted by the Indian hotel industry to restore revenues, conserve resources and attain greater operational and cost efficiencies in the midst of the Covid-19 crisis. The article also brings to the fore the growth-enhancing measures adopted by the industry in anticipation of a “new normal” in the post-Covid world.Design/methodology/approachThis study is based on primary data collected via a survey, followed by a series of interviews with a select group of senior finance managers from a wide spectrum of hotels based in India.FindingsOur findings suggest that Indian hotels have adopted several measures to enhance cash flows/revenues, reduce operating costs and cash outflows and conserve resources in order to tide themselves over during the crisis. Prominent cash flow–enhancing measures include price drops on special offers and reductions on list prices. Cost-cutting measures include economizing on energy consumption, reductions in labour costs and the postponement of maintenance expenses and discretionary spending. Resource conservation measures that have been adopted focus on postponement of capital expenditure and an increasing shift to localizing supply chains. Growth-enhancing measures adopted by the industry in anticipation of the long-term “new normal” include restructuring of the workforce and measures aimed at attracting domestic tourists and increasing product diversity.Originality/valueThis study attempts to understand the short-term and long-term financial management strategies adopted by Indian hotels in the face of unprecedented disruption caused by the Covid-19 pandemic. To the best of our knowledge, this paper is the first of its kind in the Indian context.

Poetry in Action: From the Gift Economy to Corporate Philanthropists

The role of patronage has been widely examined in studies in different disciplines, from the arts to sociology. This paper adopts a novel interdisciplinary approach to investigate the relationship between patronage, corporate philanthropy, and the economic (and non-economic) returns for donors. In an ancient Latin literature perspective, the case study analyzes the literary works of Horace, master poet and noteworthy exemplum of cursus honorum and Latin patronage. Highlighting some pivotal poetic lines (from a managerial standpoint), the study proposes a patronage and gift economy framework as the building blocks for corporate philanthropy and corporate social responsibility actions. While patronage fosters the development of economic relationships, even if in a non-linear and multi-faceted way, corporate philanthropy promotes relationships aimed at achieving positive returns for the donor, be they economic or meta-economic, instantaneous or delayed. Although more difficult to capture through the usual cash inflow and outflow measurements, corporate philanthropy and corporate social responsibility express an elusive but valuable economic relationship. Therefore, this study offers some managerial insights for non-profit corporations and those industries – for example, sports – where the economic returns may not be a central element of the investment. Finally, it is noteworthy that Horace is, among other things, an author of great modernity for his tension, articulated and complex, towards the active events of his time. His rediscovery, not only in literary studies, has allowed to add to other disciplines the analysis of an intellectual, divided between art and current life. Keywords: Latin literature, patronage, corporate philanthropy, gift economy, non-financial performance

PENGARUH PSAK NO. 1 TENTANG PENYAJIAN LAPORAN CASH FLOW DAN CAPITAL EXPENDITURE TERHADAP FIRM VALUE PADA PERUSAHAAN YANG BERGERAK DI BIDANG CONSUMER GOOD YANG TERDAFTAR DI JAKARTA ISLAMIC INDEX PERIODE 2010-2019

Financial statements are prepared and presented to be submitted to those who need them. Of course, in this presentation must be in accordance with the existing provisions that are stipulated in PSAK No. 1 concerning the presentation of financial statements. Firm Value has an important role because it will form an image for the company, firm value is created by the contribution of other factors. Operation Cash Flow informs cash inflows and cash outflows from a company. Capital Expenditure as a reserve fund to support the expansion of the company or the improvement of assets. This research uses descriptive methods and quantitative approaches using secondary data supported by literature and documentation studies. The results showed that Operation Cash Flow partially has a positive and significant effect on Firm Value as well as Capital Expenditure has a positive and significant effect on Firm Value. Simultaneously both free variables can contribute and are able to significantly affect firm value.Keywords: Operation Cash Flow, Capital Expenditure, Firm Value

Effective budgeting as a priority of the company›s development

In the modern world, in the conditions of economic instability and fierce competition, companies need to have effective tools that can provide an opportunity to study the current financial condition, compare cash inflows and outflows, approve the right decisions that contribute to the subsequent formation and development of the enterprise, as well as optimize management costs. In a company, such an important tool for financial planning, as well as control, is budgeting.This article discusses the tasks, goals, methods, disadvantages and advantages of budgeting, illustrates the full continuous cycle of budget management and the stages of development of the concept of budgeting. In addition to the theoretical aspects, the article considers the empirical and methodological aspects. The purpose of this article is to generalize the theoretical provisions and develop the organizational and methodological aspects of the application of budgeting and the impact of effective budgeting on the development of the overall company. The article uses complex and systematic approaches to the processes and phenomena under study, which is achieved through the methods of analysis and synthesis, review and collection of information, statistical analysis, scientific abstraction and visualization.In the conclusion of the article, the conclusions are made, that a properly formed concept of budgeting, improvement of methods and elements of the budget process will make it possible to manage the capital, as well as a single commercial, and the company as a whole, establishing the sequence of business types, terms and trends of restructuring. This will allow the owners of companies to adapt their business in time to all possible changes in market conditions.

REVIEW PENYUSUNAN LAPORAN KEUANGAN BERBASIS PSAK NO. 45 (STUDI KASUS PADA UNIVERSITAS MUHAMMADIYAH PONTIANAK)

The purpose of this study is to apply PSAK no. 45 Non-Profit Organization and compilation of financial reports at the Muhammadiyah Pontianak University. Financial statements, balance sheet and income statement are object of this analysis for the period September 2018 - August 2019. The research method used is descriptive qualitative. The analysis starts by reviewing the financial reports, examining the standards in PSAK, then compiling financial reports and classifying accounts according to PSAK no. 45 standard. The results showed that the University's financial statement is well system, record cash inflows and outflows clearly, has been report Income statement and balance sheets but for the posts, sequences, accounts valuation were not in accordance with PSAK no. 45 Non-Profit Organization. The university does not report cash flow statement and notes on financial statements.

RISK MANAGEMENT STRATEGIES OF MICRO, SMALL AND MEDIUM AGRIBUSINESS ENTERPRISES IN NORTH-WEST, NIGERIA

The study identifies the common risk management strategies (RMS) used by micro, small and medium scale enterprises (MSMAEs) in North-west, Nigeria. A sample of 334 MSMAEs were selected using multi-stage sampling procedure. Data were collected in 2020 with the use of structured questionnaire. Both descriptive statistics and principal component analysis (PCA) were employed to describe and analyse risk management strategies of MSMAEs. The result revealed that there were three categories of RMS namely, investment, budgeting and marketing. The investment RMS were the most used strategies with a mean score ( of 3.73 and a standard deviation ( of 2.85. This is followed by the marketing RMS with a mean score of 2.98 and a standard deviation of 2.08, irrespective of the business status. The least important RMS were the budgeting RMS with a mean score of 1.91 and a standard deviation of 1.52. The PCA results also revealed that RMS factor under micro agribusinesses had the highest and smallest correlation in terms of maintaining accurate and up-to-date financial record (0.93) and savings (0.66), respectively. Similarly, under the small agribusinesses, RMS factor had the highest and smallest correlation with timing or type of sales modification (0.95) and Borrowing (0.54). Furthermore, in medium agribusinesses, RMS factor had the highest and smallest correlation with timing of sale of output (0.92) and keeping of business record (0.68). In conclusion, MSMAEs managed their risk through investment, budgeting and marketing strategies. It was recommended that regular capacity building especially in the area of record keeping, maintaining accurate and up-to-date financial record, budgeting cash flow and outflows and conducting basic financial analysis couple with effective marketing management system should be given priority in risk management strategies in the sector.

Manajemen Pembukuan pada Petani di Desa Adat Anggabaya

Anggabaya Traditional Village has natural resources and wide and good agricultural land. Farmers in the Anggabaya Traditional Village are members of an organization called Subak. In managing their farming business, most of the farmers in the Desa Adat Anggabaya still have problems because there are still many farmers who do not know how to make a format for recording financial transactions and apply simple bookkeeping. Bookkeeping management training is expected to be able to solve the problems experienced by farmers so that farmers can make their own books and know the cash inflow and outflow of cash every time they make a purchase or sale transaction.

Major Shareholders' Investment Background and Corporate Investment Behavior — Based on Evidence from China's Private Listed Companies

Investment behavior is one of the three major financial decisions of a company. Based on this, this paper takes China's private listed enterprises from 2004 to 2017 as samples, and through literature review and empirical analysis, studies the influence of the major shareholder's investment background on the company's investment behavior. It is found that the investment background of the major shareholder is positively correlated with the cash outflow from the company. At the same time, the major shareholders with investment experience tend to choose the pyramid shareholding structure with financing advantages. After the introduction of shareholding structure, the above positive relationship has a significant change: the internal capital market brought by the pyramid shareholding structure can promote the major shareholder with investment background to find more potential investment opportunities and promote the scale of cash outflow from the company's investment, while the direct shareholding structure can inhibit the promotion effect. To sum up, the investment background provides the major shareholder with subjective motivation and ability to conduct investment, while the pyramid shareholding structure creates objective conditions for him to some extent. The research conclusion of this paper enriches the theoretical research on the high-level echelon theory and the motivation of the existing corporate investment behavior, and provides some reference significance for the investors in the capital market to judge the investment decisions of the company and identify the sustainable development and expansion ability of the company.

Modeling and Management of Power Supply Enterprises’ Cash Flows

The purpose of the study is to assess the efficiency of cash flow management at power supply companies of the CIS (Commonwealth of Independent States) countries. A methodological approach to cash flow forecasting with the use of linear and polynomial regression has been developed. The study is based on the data provided by 12 power supply companies operating in CIS member countries. Forecasting based on the generated polynomial models of multiple regression of cash flow for the power supply companies under study confirms the strong possibility of extrapolating the studied trends to future periods. Compared to the linear model, the polynomial one confirms higher values of the determination coefficients for the majority of power supply companies. The projected volumes of cash inflow, cash outflow, and net cash flows of power supply companies with the application of the described polynomial multiple regression models have a fairly high degree of approximation. The correlations between operating cash flows and outflows, between total cash inflow and outflow of the majority of power supply companies are high. The low level of synchronization between cash inflows and outflows of the companies under study is associated with the specifics of their financial and investment activities and the cash flow management policy. It has been proven that energy enterprises’ financial stability significantly depends on the synchronization and uniformity of cash flows. The proposed methodological approach allows identifying enterprises by the criterion of riskiness from the standpoint of the synchronization and homogeneity of their cash flows.

Вплив інфляції на результативність діяльності банків

Abstract. Introduction. Researchers and banking practitioners pay considerable attention to the analysis of the impact of inflation on the banking sector. The statement of the scientists as to the nature of inflation, corresponding to the modern development of the economic processes, is an approach to the origin of inflation based on the imbalance in money supply and demand. Purpose. During 2014-2017, the political and economic crises in Ukraine led to imbalances in the main macroeconomic proportions, which negatively affected the development of the banking system and, as a result, caused rising of the inflation rate, cash outflow, increasing dollarization and declining purchasing power. Inflation processes had a negative impact on the banks’ performance, namely, the rise in inflation reduced lending and interest income and increased interest expenses, what, therefore, reduced banks’ net interest income. Results. While assessing the impact of inflation on the banks’ performance, it was determined that 2019 was a year of the banks’ performance record. According to the statistics, when the inflation rate fell to record low of 4.05%, BSU’s profit in 2019 reached a historic high: solvent banks received UAH 58.36 billion of net profit, which is 2.7 times higher than the previous year historical record. Thus, the implementation of the NBU’s stimulating monetary policy contributes to the achievement of the projected social and economic goals of the society and is an essential factor in ensuring the stability of the banking system, creating the appropriate basis: price stability and low inflation in the long run. Conclusions. According to the results of the analysis, it is possible to state that in 2020 and in the coming years, due to the qualitative monetary policy of the NBU and a decrease in inflation, there is a reason to expect an increase in net profit of the banking system in Ukraine. This positive trend will renew the banking sector in Ukraine, which will lead to its profitability and efficiency. Keywords: inflation, inflation component, inflation targeting, monetary policy, banks’ performance, lending.

Does China's Anti‐corruption Campaign Curb Position‐related Consumption? Evidence of Classification Shifting*

AbstractThis study investigates whether and how China’s anti‐corruption campaign, which was promulgated in 2012, reduces position‐related consumption. It examines data from Chinese A‐share listed companies for the period 2010–2015 using a difference‐in‐differences research design and finds that state‐owned enterprises are more likely to reclassify consumptive cash expenditure to less sensitive accounts by moving the expenditure as items for investing cash outflow after the campaign. This result is more pronounced when the chief executive officer has greater power or when corporate governance is weak. The study contributes to academia and practice by showing that an anti‐corruption ban may have unintended consequences.

The importance of cash flows in the economic assessment of the mining projects

The economic assessment and analysis of investment projects is aimed to show what the value will be achieved by the project for enterprise, region and wider community. The overall assessment of the project should be given by the investor, financier and ecology. The positive results of the project are certainly acceptable from the point of view of investors, but they do not have to be acceptable from the point of view of financiers and ecologists. This imposes a need for balancing the demands of all three sides. In the static evaluation of the project, the profit and loss account, profitability, is observed, which is higher than in costs, which is a gain (profit). In the dynamic project evaluation, the following cash flows are monitored: financial, economic and social. The financial cash flow points to the liquidity of the project during its lifetime, if the inflow is constantly greater than the outflow of funds, the project is liquid. The economic flow indicates the project profitability, period of return on investment, net present value and internal rate of return. The social cash flow deals with the national economy, excludes the government's contributions to cash outflows and determines the social net present value as well as the social rate of profitability.

Cash flows, capital structure and shareholder value: Empirical evidence from Amman stock exchange

The current study links the information contents of the three main financial statements in a balanced panel data model to empirically examine the effect of cash flows per share and capital structure on shareholder value. The results of the study are based on a sample of 270 firm-year observations from the Jordanian commercial banks and insurance companies that listed on Amman Stock Exchange (ASE) from 2011 to 2019. Based on the Fixed Effect Model (FEM) with Driscoll-Kraay standard errors, the empirical results show that cash flows from operating activities per share had a positive and significant relationship with shareholder value, whereas both the cash flows from investing and financing activities per share had negative but insignificant relationship with shareholders’ value. Results also show that capital structure had a negative but insignificant relationship with shareholder value. Finally, the results indicate that dividend per share had a positive and significant relationship with shareholder value. Accordingly, decision-makers should direct cash to efficient investment projects in order for cash outflows from investing activities to create value to shareholders and to generate positive cash flows from financing activities. Similarly, an appropriate capital structure should be selected to create value for shareholders.

The German Business Panel: Insights on Corporate Taxation and Accounting during the COVID-19 Pandemic

We introduce the German Business Panel (GBP), a novel large-scale survey of German firms. The GBP periodically surveys executives and key decision-makers in a representative sample of German firms, taking stock of their perceptions, views, and expectations. A particular focus of the survey is on the role of accounting and tax regulation for companies. We present findings from the first wave of the GBP which was in the field over the summer 2020 and addressed the consequences of the Covid-19 pandemic for companies in Germany. Relying on more than 10,000 complete responses, we disentangle how the economic impact of COVID-19 hits industries with varying intensity. We also document that state aid was insufficient for the hardest-hit firms. As a consequence, firms systematically took additional measures like cost-cutting or reducing cash outflows. The state interventions did not lead to managers expecting a substantial increase in future tax rates. We conclude by providing an outlook on how researchers can access and use the survey data for their own research questions.

Spreadsheet Iteration of Reversionary Leasehold Rental Growth Rate Within The Framework of Explicit DCF Appraisals

Income growth rates are required to justify decisions and strategies for property investments. Although existing studies addressed this phenomenon in freehold investments, a relative question regarding the determination of rental growth rates of leasehold investment properties valued part-way through rent review periods has not been addressed before now. This study examined the spreadsheet-assisted scenario analysis tools and techniques that are required for the determination of rental growth rates of leasehold investment properties valued part-way through rent review periods. A precursor to the scenario analysis was the development of a hybrid leasehold DCF valuation model arising from the equation of the formula for reversionary leasehold equivalent yield valuation to the formula for reversionary leasehold growth explicit DCF valuation model; thereby culminating into the identification of four unknown variables comprising the all risks yield and the implied growth rates of leasehold cash inflows and cash outflows which were subsequently derived using the solver tool of Excel®. From a total of eleven scenarios generated, the 9th successive scenario produced optimal results indicating zero slack between iterated and calculated values for the growth rates of leasehold cash inflows and cash outflows respectively. With recourse to the hybrid leasehold DCF valuation model, the spreadsheet-assisted scenario was found to produce mathematically valid growth rates that justify the valuation of leasehold investment properties part-way through rent review periods. The value of this research is the analytical tools and rigour it avails investors seeking income returns and growth from reversionary leasehold property as an instance of terminable investments.

Preceding Dividend as a signal of Future Dividends: Evidence from Chinese Commercial Banks

Dividend policy is a prime concern of all stakeholders for it represents major cash outflow. There are two major underlying considerations for present study; first, academicians have spent more than five decades now and used various theoretical and empirical models to explore and study nature of determinants of dividend policy; but the issue is yet unresolved and open for further discussion. Second, majority of extant studies used data from developed economies to understand dividend myth. In addition, from available studies, the study on dividend policy of non-financial sector takes large area in pie. The present study is based on model after considering all factors to address dividend policy of commercial banks in emerging markets. Secondary data is used for statistical analysis the empirical results indicate significant relationship of provisioning against non-performing loans (LNPNPL), total assets (LNTA) and return on assets (ROA) on dividend payout ratio. LNPNPL significantly and negatively causes dividend policy, this indicates that banks with higher level of risk pay less dividends. Similarly, ROA significantly and positively explains variations in dividend payout ratio. The positive relationship tells that banks with higher returns (profitable banks) pay higher dividends. The negative and significant relation (causal) between LNTA and dividend payout indicates that Chines banks pay less dividends as they grow bigger in size. Other variables of model indicate insignificant relationships. Findings support existing literature but the size of bank has significant but inverse relationship with dividend policy. The findings are instrumental for investors aspiring for dividend income.