Payment Period Research Articles

Adherence of AS-16 Borrowing Costs by Non- Corporate Entities; A Descendant Note

All organisations whether profit oriented or not need funds either borrowed or owned for investing in its operating assets on a regular basis. Borrowed funds attracts the periodical interest payments and also includes other costs like discounts, finance charges, ancillary costs etc. Proper accounting of such borrowing cost is equally applicable both for the corporate and non-corporate entities in order to report true and fair state of affairs of the business. In this regard, the Accounting Standard – 16 “Borrowing Costs” specifies the criteria for Recognition and Measurement, Presentation and Disclosure of borrowing costs incurred by an entity on its qualifying assets. How far this Accounting Standard is adhered, particularly by the noncorporate entities is a million-dollar question. The present study intends to analyse the treatment of borrowing costs incurred by the non-corporate entities on the qualifying assets. For a deeper analysis of the issue, an enquiry on 30 non-corporate entities was made and analysed the results thereof. The study revealed some interesting facts regarding the issue. Non adherence of AS - 16 among non-corporate entities is evident from the study.

ANALISIS BALANCED SCORECARD SEBAGAI ALAT PENGUKUR KINERJA MANAJEMEN PERUSAHAAN LEASING (Studi Kasus pada PT. Samudra Artha Finance)

Performance assessment is one of the important factors in the company. Apart from being used to assess the success of the company, performance measurement can also be used as a basis for determining the reward system in the company. The Balanced Scorecard is comprehensive enough to motivate executives in realizing performance from these four perspectives so that the resulting financial success is sustainable. Financing through leasing is generally intended for the procurement of capital goods in the form of production facilities and equipment such as machinery and other equipment. Also, the type of business being carried out is consumer financing, which is a financing transaction for the purchase of consumer goods to individuals using a periodic payment system, where the main customer is the general public who has credibility. PT. Samudra Artha Finance is a finance company incorporated in the finance business and solutions for two-wheeled and four-wheeled motor vehicles. The purpose of writing this article is to determine the performance achievements of PT. Samudra Artha Finance. From the results, the assessment using the balanced scorecard greatly facilitates PT. Samudra Artha Finance to be able to find out the advantages and disadvantages of the company. The suitability of the vision and mission so that goal congruence is created among business actors has a very big influence in achieving the overall goals of the company as indicated by a final score of 97.95% or having a good performance.Keywords: balanced scorecard, leasing, assessment, performance

WORKING CAPITAL MANAGEMENT AND FINANCIAL DISTRESS OF NON-FINANCIAL COMPANIES LISTED AT THE NAIROBI SECURITIES EXCHANGE

Financial distress is a common global phenomenon among the corporate entities. Locally, there is overwhelming evidence of firms that have undertaken financial restructuring, delisted from the exchange market, gone into receivership and subsequently liquidated on account of financial distress. This study therefore set out to examine the way in which management of working capital affects financial distress of non-financial firms listed at the Nairobi Securities exchange. In fulfilling this objective, the study sought to establish how cash management, inventory management and accounts receivables management effects financial distress of non-financial firms listed at Nairobi Securities Exchange. The free cash flows theory, Precautionary motive theory, financing advantage theory and liquidity theory formed the theoretical basis of the study. The study adopted longitudinal research design and collected secondary data over ten years period (2009-2018) from a census of the 40 non-financial firms listed in Nairobi Securities exchange. Descriptive statistical analysis was used to obtain the initial overview of the data collected. Inferential statistical analysis was undertaken using the F and t-tests at 95% confidence level. The study found that cash management had a positive and significant effect on the firms’ distress index. Further, the study revealed that inventory holding period was negatively and significantly related to the firms’ financial distress index. The study also showed that suppliers’ payment period had a positive and significant effect on financial distress indicator. The study however depicted a negative but insignificant relationship between receivables period and financial distress. The study recommended that the management of non-financial listed firms should ensure appropriate management of working capital components in order to guard against instances of corporate financial distress 
 
 JEL: O15; J24; L20
 
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Financing capital-constrained third party logistic firms: fourth party logistic driven financing mode vs. private lending driven financing mode

The accounts payable payment period for transportation costs is usually less than the accounts receivable cycle for transportation fees for a third-party logistic (3PL) firm in China; hence, a capital-constrained 3PL firm has a strong demand to seek credit loans from some competitive lenders (e.g., fourth-party logistic [4PL] firm or private lending [PL] organization). To investigate the attractiveness and effectiveness of different financing modes, two practical financing modes (4PL-driven and PL-driven) and an improved 4PL-driven financing mode are formulated in this work. We present a game-theoretical approach to investigate the equilibria based on the profile functions among 4PL firm (or PL), 3PL firm, supplier and retailer under different financing modes. We find that (1) the practical 4PL-driven financing mode will be the Pareto-dominant financing mode for 3PL firms, suppliers and retailers when the initial budget of the 3PL firm falls below a certain level. (2) The 4PL firm's profit is always higher when using the improved 4PL-driven financing mode. (3) The 4PL firm should use the practical 4PL-driven financing mode for start-up 3PL firms to support their growth; but when they grow to a certain scale, the 4PL firm should use the improved 4PL-driven financing mode to enhance its profit.

New drug approvals and their effect on performance for participants in the Oncology Care Model.

e13525 Background: The Oncology Care Model (OCM) is an oncology-specific value-based care model that holds participating practices accountable for all costs of care. Medicare implements quantitative adjustments to model target costs in OCM, including a trend factor to reflect aggregate cost growth and a novel therapy adjustment for new indications. However, it is unclear how well these adjustments account for the emergence of new therapies that are evidence based and influence standard of care for an individual cancer type. We sought to investigate this by studying the impact that FDA approval for brentuximab vedotin (BV) in the first line setting in March 2018 had on OCM practice performance in Hodgkin’s Lymphoma (HL). Methods: We identified all HL OCM episodes attributed to Tennessee Oncology (TO), a large community oncology network of over 90 oncologists, during performance periods (PP) 3 through 6. HL episodes within the lymphoma bundle were identified through the use of individual ICD-10 coded diagnoses on claims for antineoplastic infusions and E&M visits. Using OCM performance data, our electronic health record, and claims data analytics software, we calculated average episode target costs, drug spending by drug type, and hospitalization costs to determine key determinants of OCM performance. Results: During the study period, there were 577 episodes of lymphoma attributed to TO, of which 28 were for patients with HL. TO’s OCM performance in HL was significantly under target in PP4 (under target by $13.5K) and significantly over target in PP5 (over target by $32.1K) after the updated BV FDA approval. Average episode spending on BV increased by over $45K during this timeframe, while OCM target cost increased only by approximately $19K. Despite the change in OCM performance, hospitalization costs and hospice utilization remained relatively stable. Conclusions: In the OCM, despite quantitative payment factors that in principle are intended to adjust target prices to reflect changing cost dynamics, significant gaps exist. These gaps can inappropriately shift risk to providers for the appropriate use of new indications, including those that change standard of care. The example of brentuximab vedotin in HL illustrates the difficulty in reaching performance benchmarks due to dynamics associated with the rising cost of drugs. Further methodological changes are needed in future oncology value-based care models to ensure accurate prediction of rapidly changing treatment costs for appropriate therapies. Hodgkin’s lymphoma OCM payment period cost and utilization comparison data.[Table: see text]

Macroeconomic factors, working capital management, and firm performance\u2014A static and dynamic panel analysis

The aim of the study is to explore the interaction effect of macroeconomics indicators, and working capital flows on financial performance in a developing economy. By using the static and dynamic approach of panel analysis, it has been shown that there is a relationship between the components of working capital and the gross profit and cash conversion duration. Second, while interest rates used as an interaction variable with the average payable days have adverse effects, firm performance would decrease if interest rates increase. The average payable duration extends; instead of primarily regressing, the average payable period positively correlates with firm performance. The conversion cycle of cash has a negative relationship, but it reverses its actions after using interest rate interaction. There is a negative relationship with gross profit in the simple regression exchange rate and cash conversion cycle while using the second interaction variable with the cash conversion cycle, has positive effects. In addition, the exchange rate gets higher to increase the cash conversion length, financial performance will be increased. In addition, the exchange rate gets higher to increase the cash conversion length, financial performance will be increased. This study receives new results, the exchange rate increases, companies that can pay early to payable will get higher firm performance while exchange rate and the interest rate have a significant role in changing the firm performance.

Churn Prediction on Higher Education Data with Fuzzy Logic Algorithm

Colleges are an optional final stage of formal education. However, with time, the Management Section finds the fact that the student churn rate in the university scope becomes a problem. The purpose of this research is to predict whether the student will be churn or loyal in the future, the data will be taken from 2014. The analytical technique used in this research process is the Fuzzy method of C-Means. At a university, the variable that will be tested is the Length of students who are currently attending higher education at the University or campus, when the last student pays enrollment, the last payment period, and the student's total payment. The data used as many as 100 datasets were collected in this research, starting from 2014 to 2020. Of the 100 Datasets of informatics engineering, students gained 92% of loyal students, and 8% of students predicted to churn.

Working Capital Management and Corporate Financial Performance of Consumer Goods Sector in Nigeria

The study assessed the impact of working capital management on corporate financial performance of consumer goods sector in Nigeria. The study specifically determined the impact of average collection period on the return on assets of consumer goods industries in Nigeria; assessed the effect of cash conversion cycle on the return on assets of consumer goods industries in Nigeria and evaluated the effect of average payment period on the return on assets of consumer goods industries in Nigeria. Panel data spanning five years (2013-2017) was gathered for five consumer goods firms in Nigeria. Panel estimation techniques such as descriptive, correlation, fixed effect (cross section and time specific), random effect and other post estimation tests was used in the study. Findings from the study indicated that average collection period exerts negative insignificant impact on the profitability of consumer goods firms with coefficient estimate of -.0000662(p=0.848>0.05); cash conversion cycle exerts negative insignificant impact on profitability of consumer goods firms with coefficient estimate of - .0002468 (p=0.527>0.05) and average payment period exerts negative significant impact on the profitability of consumer goods firms in Nigeria with coefficient estimate of .0016386 (p=0.049<0.05). Premise on these findings, the study suggested that management of manufacturing firms should adopt effective cost reduction strategies, measures to control labour cost vis-à-vis ensuring adequate supervision of workers, monitor firm’s assets and occasion employee training.

Working capital management and financial performance of non financial quoted companies in Nigeria

This study examines the effect of working capital management on the financial performance of Non-financial companies quoted on the Nigerian Stock Exchange over the period 2014 – 2018 while using a panel research design. This work is unique because it considers a sample of 71 companies drawn from all the 10 non-financial sectors of the NSE. Unlike most extant studies, financial performance was captured by earnings per share as a proxy, while the right-hand side variable being working capital management was denominated by Accounts receivable period, Inventory turnover period, and Accounts payable period. This study also considered the effect of some control variables namely annual capital expenditure, age of firm, GDP, firm size, growth of the company, and firm leverage on EPS. Data were retrieved from the Nigerian Stock Exchange 2019 Factbook. The model estimation technique adopted was the Pooled Ordinary Least Squares, fixed effect, and random-effect methods. Results from this study are consistent with the theoretical position that all aspects of working capital management have a significant effect on financial performance. While ITP and ACP were negatively related to EPS, APP was found to have a positive relationship with EPS. The research results also reveal that although all the control variables were found to be significant, only the age of the firm was deemed to be positively related to EPS. Based on the findings, the research recommends that firms should focus their managerial attention on lowering their ITP and ACP while increasing their APP, as results indicate that management of these elements of working capital can translate into liquidity and higher profitability.

Determinants of Rice Farmer Participation in the Direct Marketing Channel in Ghana

Enhancing smallholder farmers’ access to reliable, ready, and direct marketing channels is a prerequisite for sustainable food supply and poverty reduction in the developing countries including Ghana. However, it is a great challenge for smallholder farmers to access direct marketing channels in Ghana. This paper analyzes the factors that influence smallholder rice farmers’ participation, and the intensity of participation, in direct marketing channels using primary data from 199 farmers in three rice-growing districts in the Northern Region of Ghana. A double hurdle model was used in the empirical analysis. The study findings show that a lower percentage of farmers sold their rice output to processors (direct marketing). Farm size, the price of rice output per 85 kg bag, access to market information, and access to credit increased farmers’ participation in direct marketing channels, whereas payment period and ownership of a bicycle reduced their participation. The study concludes that improving farmers’ access to market information and credit availability would enhance participation in direct marketing channels.

Analysis of Working Capital Management in Automotive Industry Sector Listed in Indonesia Stock Exchange

This study aims to determine the analysis of working capital management in automotive industry sector listed on the Indonesia Stock Exchange. The object of the study consisted of 12 companies included in the automotive industry sector which were listed on the Indonesia Stock Exchange from 2014 to 2018. The results showed that the average collection period, inventory collection period, average payment period, and cash conversion cycle showed fluctuating results during the study period . The less time it takes for a company to collect receivables, the more liquid a company is. While the less time needed to convert raw materials into finished goods shows good results because the inventory will not be too long in the warehouse so that it will reduce costs. The average payment period is relative for each company. That's because every company has a debt agreement with a certain period. The less time needed by the company since the raw materials purchased are paid until the trade receivables from the sale are billed, the better for the company because the faster the time needed to turn money into goods and into cash back which will increase company profits.

The debtor-attributes information and the probability of performing loans in the microfinance sector

Based on the recent evidence of the high rate of non-performing loans in Indonesia’s microfinance sector, there is a need to formulate a mechanism that could control such credit risk. This study attempts to identify the pivotal determinant factorsresponsible for performing loans. In particular, this research proposes demand-side factors, such as debtor-attributes information, as critical for ensuring installment payments. Using unique data from microfinance in Central Java, it employs logistic regression analysis to prove that debtors’ age and type of collateral significantly affect loan performance. This paper further shows that other variables, such as the payment period and the interest rate, also substantially affect credit risk. These findings have empirical and practical significance. For practical purposes, this research develops the new perspective that debtor-specific information, particularly on their behavioral aspects, requires more in-depth review. This insight may be useful for developing new credit-analyzing tools to alleviate severe non-performing loans. Empirically, this research improves the study of antecedent variables that influence performing loans.

Does working capital management impact an enterprise’s profitability? Evidence from selected Nigerian firms

This study examined the impact of working capital management on the profitability of selected quoted agricultural and agro-allied companies (from 2012 to 2016) in Nigeria. Secondary data were extracted from eighteen quoted agricultural and agro-allied companies in Nigeria, four of which are agricultural companies out of the twenty-three in Nigeria. Descriptive research design and regression analysis were used. Working capital management was measured using the trade receivables collection period, trade payables, payment period, inventory turnover period, and cash conversion cycle, while profit before interest and tax measured profitability. This study found that working capital management and profitability are related to the agriculture and agro-allied sector in Nigeria. The result shows the trade receivables collection period and profitability are negatively related. The result also shows the trade payables payment period and profitability are positively related. The result shows that the inventory turnover period and profitability are related, the cash conversion cycle and profitability are positively related. The conclusion is that working capital management and profitability are related. If the management of firms takes efficient and effective decisions in managing the company’s working capital, all things being equal, the maximization of the firm’s profitability, value, and shareholders’ wealth can be guaranteed. Consequently, agency costs asserted by agency theory would be eliminated automatically. AcknowledgmentAll researchers and non-researchers that contributed to this paper are highly appreciated.

Conditional optimization of mortgage loan parameters

Subject. In the article, we calculate the period of a borrowing, in which the interest burden and monthly payments are minimal. Objectives. The aim is to create an algorithm to optimize the term of the mortgage loan, taking into account the amount of debt and interest rate of the loan. Methods. The study employs methods to analyze the formula of annuity payments of a mortgage loan, and to model the final optimization algorithm. Results. We developed an algorithm, to determine the optimal term of the loan, using the certain loan amount and interest rate. The study considers the case for banks, operating in Krasnoyarsk. Conclusions. The paper considers two parameters of a mortgage loan, i.e. the interest burden and the monthly payment, which is calculated, according to the annuity formula. Both parameters depend on the loan amount, the interest rate, and the period of the loan. However, the interest rate is set by the bank, so the only parameter that the borrower can change is the period of payment. By changing the term to maturity, it is possible to have a loan with minimum payments and interest burden. For the purpose of optimization, we consider both parameters simultaneously. Taking into account their versatile nature, we consider the optimal time, when payments and interest burden are minimized. The paper also reviews the case of optimization of credit parameters for construction enterprises of the Krasnoyarsk Krai, in various banks.

A Study on the Introduction of Cash Accounting Scheme in Tax Invoice for Small Businesses

사업자는 재화 또는 용역을 공급하고 공급시기에 세금계산서를 발급한다. 그러나 그 공급시기가 언제인지 모호하여 적법한 시기에 세금계산서를 발급하기 위해서는 납세협력비용이 발생된다. 만일 잘못된 시기에 세금계산서를 발급할 경우 가산세와 매입세액 불공제 등 과도한 세법상 제재를 받게 된다. 공급자가 외상으로 거래하는 경우 공급자는 부가가치세를 거래징수하지 못한 상태에서 자기부담으로 먼저 부가가치세를 납부하여야 하므로 자금부담이 발생한다. 또한 공급자는 공급받는 자의 파산 등으로 거래징수할 부가가치세의 회수가 불가능한 경우에는 대손세액공제를 받아야 하는데 그 적용요건이 엄격하여 대손세액공제 신청에 있어 납세협력비용이 발생함은 물론 이를 적용받지 못할 경우 장기적인 자금 압박으로 이어지게 된다. 아울러 과세관청 입장에서도 대손세액공제 제도의 운영으로 막대한 행정력이 소요되어 사회적 비용이 크다. 이러한 외상거래에 따른 경제적 부담들은 소규모 사업자에게 발생할 가능성이 상대적으로 높다. 따라서 독일과 영국의 예와 같이 소규모 사업자의 경우 세금계산서를 공급시기가 아닌 공급대가를 현금으로 지급받는 시점에 발급하도록 하는 현금회계제도를 도입함이 타당하다. 세금계산서 현금회계제도는 소규모 사업자의 납세협력비용을 절감하고 자금부담을 해소하며 세금계산서 발급시기의 오류를 줄임으로써 과도한 세법상 제재를 회피할 수 있게 한다. 다만 세금계산서 현금회계제도를 도입할 경우 납세자가 현금 지급시기를 조정하여 납세의무의 발생시기를 조정할 우려가 있다는 지적이 있으나 이는 현행 제도에서도 공급시기를 조정하여 나타날 수 있는 문제로 보인다.A businessman shall supply goods or services and issue tax invoices at the time of supply. However, tax cooperation costs are incurred to issue a tax invoice at a legitimate time because the timing of the supply is unclear. If a tax invoice is issued at a wrong time, it will be subject to excessive tax laws such as additional taxes and unfair purchase tax. When a supplier transacts on credit, the supplier must first pay the value-added tax at its own expense without collecting the value-added tax, which results in a financial burden. In addition, suppliers must receive a tax deduction if they cannot collect VAT due to bankruptcy of the supplier, and the application requirements are strict, resulting in tax cooperation costs in applying for the tax credit. In addition, from the perspective of the tax office, the operation of the loan-loss tax deduction system requires a huge amount of administrative power, which is a huge social cost. The economic burden of these credit transactions is relatively likely to occur for small businesses. Therefore, it is reasonable to introduce a cash accounting system for small businesses, such as Germany and the United Kingdom, to issue tax invoices at the time of payment of supply considerations rather than supply periods. The tax invoice cash accounting system allows small businesses to avoid sanctions under excessive tax laws by reducing the cost of tax cooperation, eliminating the burden of funds, and reducing errors in issuing tax invoices. However, some point out that if the tax invoice cash accounting system is introduced, taxpayers may adjust the timing of the tax obligation by adjusting the cash payment period, but this seems to be a problem that can be caused by adjusting the supply period in the current system.

MANUFACTURING FIRMS’ PROFItABILITY AND MANAGEMENT OF CREDIT A STUDY OF UNILEVER NIGERIA, PLC AND NIGERIA BREWERIES PLC

This study examines the effect of credit management on the returns of manufacturing firms using two quoted firms on the Nigerian stock exchange as a case study. This study determines whether a credit management mechanism using the receivable collection period, liquidity management, and payable payment period, have an effect on the profitability of a manufacturing firm which was measured using Return on Assets (ROA). Data were sourced from annual reports of the two firms, which provide empirical evidence for the two (2) manufacturing firms in Nigeria from 2013 to 2018. In other to achieve the objectives of the study, data collected were analyzed using descriptive statistics and Linear Regression to test for normality of variables on data obtained from annual accounts of the Companies under study. Data obtained were further analyzed by the use of financial ratios while the three hypotheses formulated were tested with ANOVA using SPSS statistical package 17.0 Version. From the analysis made, it was discovered that there is a significant relationship between credit management and the profitability of manufacturing firms, based on their Receivable collection period, Payable payment period, and Liquidity management. From the result, the researcher recommended that the sales department of the manufacturing firms must know about credit management to encourage the sales of their products and firms should not be scared of credit sales because it assists in the increase in the firm’s profitability performance. For proper management, credit should be converted to cash in the shortest possible period.

Working Capital Management and Its Impact on Firms’ Performance: An Empirical Analysis on Ethiopian Exporters

Companies may have their level of optimal working capital that maximizes their values through the effective management of current liabilities and assets. Previously, many studies were made on the impact of working capital management on the company’s performance in different sectors; however, its impact on the performance of firms that are engaged in export activities was not given any consideration and this particular study has attempted to investigate the fundamental impact of working capital management on the export firm’s performance in Ethiopia. To analyze this particular study, a total of 164 exporters operating in Ethiopia have been taken as a sample and both primary and secondary data collection methods were used. The data gathered from the sample of the study were analyzed using a multiple linear regression model and the result reveals that working capital management which was measured by account receivables period, cash conversion cycle, and accounts payable period has a statistically significant and positive correlation with the performance of exporting firms in Ethiopia which was measured by both return on assets and return on investment. However, working capital management which was measured by the inventory conversion period has a statistically significant and positive impact on return on investment, but it has an insignificant impact on the performance of sampled export firms in Ethiopia which was measured by return on assets. Based on the result of the study, firms may need to extend credit terms for customers, may prolong their cash conversion cycle, may need an extended payment period, and may or may not hold a high volume of inventory. All extending periods and cycles shall be made up to the extent of attaining an optimal level of working capital and better to implement a conservative policy of working capital management. Thus, it is advisable to consider the result of this study while making decisions regarding their working capital management to support their performance.

The Check Is in the Mail: Can Disclosure Reduce Late Payments to Suppliers?

A common corporate cash management strategy is to delay payments owed to suppliers. We examine whether buyers pay suppliers faster in response to a recent regulatory change in the United Kingdom that mandates the public disclosure of buyers’ payment practices. We find that after the regulatory change, UK firms subject to this regulation shortened their payment periods relative to several control samples of firms that were not subject to the regulation. In cross-sectional tests, we predict and find that this shortening of the payment period is attenuated for firms that are less able to bear the costs of paying suppliers faster. Specifically, we find that the reduction in the payment period is smaller for buyers that (i) have longer operating cycles, (ii) depend more heavily on trade credit as a source of external financing, and (iii) pay dividends. In supplemental tests using proprietary data, we find that buyers subject to this regulation reduced their trade credit that is overdue by 30 days or more. However, this reduction is partially offset by an increase in the trade credit that is overdue by less than 30 days. Our findings are important in light of the ongoing debate in other regimes (e.g., the United States) on whether to require additional disclosures of trade credit.

Taxes of the Russian Federation: Review and Systematization Taking into Account the Innovations of 2021

The article provides up-to-date information necessary for calculating taxes and contributions paid by Russian taxpayers in 2021. Information is presented in four groups: Federal taxes, regional taxes, local taxes, and special tax regimes. For each group of taxes are the main elements of taxation, such as taxation object, tax base, tax rate, tax period and terms of payment.

Replicating Maximum-Yield Annuities with US Treasury Funds

Many individuals rely on annuity purchases to provide a steady stream of income during their post-retirement years. Life insurance companies provide a variety of annuity contracts, but they often come with sizable fees that are extremely detrimental to the purchaser in a low-interest-rate environment. This article develops a methodology that enables retail investors to structure annuities using commonly available US Treasury exchange-traded funds (ETFs) or mutual funds. Only historical price or NAV data and Treasury yield data are required to implement the strategy. The funds compose a dynamically managed portfolio requiring only an initial investment. Each period, the portfolio is rebalanced to match the modified duration of a reference annuity. This minimizes interest rate risk from parallel shifts in future yield curves. The weights are optimized to provide the highest yield possible. The objective is for the portfolio to provide the required periodic annuity payments and have a zero balance at annuity maturity under a variety of interest rate scenarios, while providing the maximum possible yield. Scenario tests show that the strategy is effective under parallel yield curve shifts, but may have shortfalls for curve steepening and gains for curve flattening. Investors may choose to add to their initial investment to reduce the risk of shortfalls if the curve steepens. The article concludes with an implementation of the strategy using actual Treasury ETFs. <b>TOPICS:</b>Retirement, exchange-traded funds and applications, fixed income and structured finance, performance measurement <b>Key Findings</b> ▪ US Treasury ETFs can be used to replicate an annuity, thus enabling retail investors to avoid the sizable fees charged by life insurance companies. ▪ The replication performs well for parallel yield curve shifts. ▪ Future work using key-rate durations may enhance the performance of the replication for non-parallel yield curve shifts.