Sales Profitability Research Articles

Exploring the Utility of Word of Mouth Advertisement in Improving Product Sales: The Case of Selected Companies in the Kumasi Metropolis of Ghana

Background: Advertisements constitute one of the principal tools organizations use in securing and retaining customers. This study assessed the effect of word of mouth advertising on product marketing in selected companies in the Ashanti region of Ghana. Data were obtained through a cross-sectional multistage sampling process. Methods: Ten (10) companies were purposely selected out of which 100 participants made up of both customers and staff of the companies was recruited at random and data collected through a simple closed ended questionnaire. Simple descriptive statistics were employed in characterizing the respondents and responses given. This was supported with standard multivariate regression analyses to detect the predictive powers of different mediums of word of mouth advertisement on sales margin and profitability. Results: In the cross-sectional analyses, telephone communication demonstrated significant direct effect on high sales margins (beta = 0.726, t = 7.463, p < 0.000). Face to face communication is the most frequent word of mouth communication channel. Our model suggest that controlling for face to face communication, social networking, lectures, conference and seminars, telephones as a medium explains 72.6 percent of the variance in sales margin. Conclusion: Using the phone as a communication tool in advertising goods and services and for the companies has direct positive impact on the level of sales than other forms of word of mouth advertisement.

DOES BANCASSURANCE AFFECT PERFORMANCE OF NON-LIFE INSURANCE SECTOR – CASE OF EU COUNTRIES

The aim of this paper is to test the influence of bancassurance as a distribution channel on performance of non-life insurance sector in selected European countries. The analysis refers to 2009 ? 2015 period and it is conducted using static panel analysis. Performance measures employed comprise of sales profitability as well as of profitability ratio of technical activity whereas independent variables used in the model include share of bancassurance, market share, gross written premium growth rate, claims growth rate, insurance density, share of premium in GDP, share of reinsurance and number of insurance companies. The results of the analysis in both models reveal that market share prove to be statistically significant determinant of insurance sector performance negatively affecting performance. Furthermore, insurance density has statistically significant and positive influence on performance measured with profitability ratio of technical activity.

Cost Drivers for Food Retailers in Developed and Emerging Markets

The subject of research is a set of methodological and practical aspects of assessing the cost factors of food companies. The study of the above factors is becoming relevant under the current conditions of environment instability and the necessity to stimulate investment, given the low elasticity of demand for products in this sector. The purpose of the research was to confirm the hypothesis of a variety of cost drivers that form the financial result of companies in a developed and emerging markets by an example of 39 food retailers in an emerging market and 48 companies in developed markets based on a system approach and the comparison method using elements of factor and correlationand-regression analysis. The research findings obtained are as follows: the choice of indicators for the regression analysis of cost factors mostly of a multiplicative type is substantiated; the research was carried out using the indicator of financial result less the tangible assets depreciation; to clarify the results of the research, the elements of the comparative analysis were applied, with the companies classified into four groups where Lenta and X5 were in the group of the most efficient companies of the first quantile, and Dixie fell into the group of the fourth quantile companies that had difficulty in generating their own funds; the cost drivers of food retailers in emerging and developed markets were identified. It is concluded that the cost driver of food retailers in developed markets is profitability of sales, and in emerging markets it is the share of capital inputs in sales revenues. It has been established that the growth rate of consumer consumption plays a key role in the retail market of all countries. At the same time, there is a market tendency to oust small companies by large players whose assets have a higher level of investment demand. The novelty of the research lies in using by the authors the EBITA profitability indicator in the regression model, where EBITA is the profit before tax, interest and intangible assets depreciation.

The Influence of Financial Performance and Corporate Governance Mechanism on Capital Structure

The research aims to determine whether asset structure, firm size, profitability, growth sales, board size, and institutional ownership on the capital structure. The population of this research are all mining and mining service companies listed in Indonesia Stock Exchange period 2012-2016. The sample are 27 companies, so the data observation as much as 135 data. The data analysis technique used was linier regression analysis with Random Effect Model approach. The result of data analysis showed that profitability and growth sales have significant affect on capital structure. Profitability have significant negative affect and growth sales have significant positive affect. The conclusion of this research showed that the capital structure on mining and mining service was influenced by profitability and growth sales, while asset structure, firm size, board size and institutional ownership did not have significant affect. The writer suggeststhat the company should improve profitability by increasing company’s sales and stable sales growth in order to reduce the company’s dependence on debt.

Optimal scheduling in concentrating solar power plants oriented to low generation cycling

In a one-day ahead energy market, power plant owners have to provide a generation schedule in advance. A scheduling strategy for concentrating solar power plants with thermal energy storage is studied in this paper. The strategy is based on a mixed-integer linear programming model which approximates the plant operation. The main novelty of the method is the inclusion in the optimization model of a penalty term for generation variation (cycling) with different intensities depending on the power block situation, i.e., normal operation, startup or shutdown. This distinction increases the search space for schedules with reduced cycling and high energy sale profits. Cycling reduction leads to higher lifetimes of the power block elements, lower maintenance costs, and easier plant operability. A simulation case study, based on a 50 MW plant participating in the Spanish market, is included. The main conclusion of this study is that an important reduction of the generation cycling can be achieved without reducing profits. Other advantages of the method are also shown. By means of historical data, it is possible to estimate the lowest level of generation cycling which maintains profits. Moreover, lower generation deviations are obtained, facilitating the tasks of the electric system operator.

DETERMINANTS OF TRADE CREDIT FINANCING: CASE OF MANUFACTURING FIRMS LISTED IN PAKISTAN

Abstract This paper investigates the determinants of trade credit financing used by listed manufacturing firms in Pakistan. For this purpose, balanced panel data are used that consist of 327 manufacturing firms listed on KSE Pakistan and time period from 2005 to 2013. Results of system GMM estimator applied on dynamic panel data set reveal that trade credit financing used by listed manufacturing firms is significantly affected by its first lag, trade credit extended to customers, availability of short term bank credit, their sales growth, profitability, creditworthiness, collateral and financial leverage. Positive coefficient for first lag of trade credit financing shows that firms’ trade credit financing is dynamic. The speed of making adjustment in trade credit financing is found relatively high due to low cost of making adjustment. Findings of this study has managerial implication for trade credit financing decision of listed manufacturing firms. For future research, investigation of the effect of financial development on trade credit financing behavior of firms is proposed.

Determinanty i tendencje zmian efektywności ekonomicznej Colian S.A. na tle ogółu przedsiębiorstw przemysłu spożywczego w Polsce

W opracowaniu określono relacje między poziomem i zmianami struktury kosztów oraz efektywnością ekonomiczną przedsiębiorstwa na tle sektora produkcji artykułów spożywczych na podstawie studium przypadku Colian S.A. Wykorzystano zagregowane dane o poziomie cen i kosztów oraz wskaźniki rentowności operacyjnej aktywów (ROA), rentowności ekonomicznej sprzedaży (RES), rentowności netto i wartości dodanej wraz z danymi kosztów rodzajowych w układzie porównawczym. Poziom kosztów ogółem w sektorze i w spółce zwiększył się pomimo zmniejszenia w strukturze kosztów operacyjnych udziału kosztów materiałów i energii, wynagrodzeń, ubezpieczeń społecznych i innych świadczeń, amortyzacji oraz podatków i opłat. Tempo spadku rentowności operacyjnej aktywów i rentowności ekonomicznej sprzedaży oraz poziomu wartości dodanej było mniejsze niż wzrost poziomu kosztów, co może wynikać z działań w pozaoperacyjnych obszarach rachunkowości.

ŹRÓDŁA RENTOWNOŚCI KAPITAŁU WŁASNEGO W ZRÓŻNICOWANYM EKONOMICZNIE ROLNICTWIE KRAJÓW UNII EUROPEJSKIEJ

The study analysed sources of return on equity in countries with strong and economically weak farms. The economic size used in FADN was used as the breakdown criterion. In the group of countries where farms reached a relatively small economic size, there were Bulgaria, Greece, Croatia (from 2013), Malta, Lithuania, Poland, Romania and Slovenia. Farms with a high standard value of production came from the Netherlands, Belgium, the Czech Republic, Denmark, Germany and Slovakia. The studies used panel methods, and the model with fixed effects was used to estimate model parameters. Factors that influenced the return on equity in the group of weaker countries included asset productivity, sales profitability (sales margin) and operating subsidies. In the group of countries with economically stronger farms, the return on equity rate was positively affected by the margin on sales and profitability of production measured by the ratio of total production to total costs and property debt. Which confirms that foreign capital can contribute to achieving positive effects from the perspective of the return on equity.

A dynamic bid price approach for the seat inventory control problem in railway networks with consideration of passenger transfer

Railway seat inventory control aims to maximize ticket sale profits by determining a selling policy on the reservation horizon. This paper introduces a dynamic bid price approach in railway seat inventory control problem. Multi-dimensional demand is taken into consideration in modeling the problem, in which passenger transfer is our main focus. A new approximate approach is designed to this problem. Numerical examples are presented to evaluate the efficiency of this approach. Simulation experiments are conducted to verify the impact of transfer under different scenarios.

Profitability of online order fulfillment in multi-channel retailing

Store-based retailers have been concerned about the high fulfillment costs and low gross margins of their online sales. This paper incorporates such issues in a non-linear mixed-integer profit maximization model of the online order fulfillment process for multi-channel retailers. A solution approach based on an iterative outer-approximation technique is developed. Using empirical data from a large U.S. retailer, the profitability of different options used by multi-channel retailers to fill online orders is evaluated. Managerial insights are developed through a factorial research design that highlights the effect of relevant logistics processes and fulfillment methods on the profitability of online sales for retailers.

The Costs of Cutting Advertising to Manage Earnings: Evidence from the Survival of Newly Launched Trademarks

Using the newly available U.S. trademark dataset to measure the lifespan of new brands, we find that new brands’ survival rate significantly declines following managers’ myopic cuts in marketing budgets. This evidence is consistent with concerns raised by marketing managers that firms’ brand innovation is being sacrificed in order to manage reported earnings to meet short-term earnings targets. The observed effect is more pronounced for firms in industries where more resources are devoted to advertising expenditures and in more reputation-sensitive industries. Additional analyses show that the survival rate of new brands has a significantly positive impact on future sales growth and profitability, confirming the value-relevance of brand innovation and our findings about the detrimental effects of earnings management .

Managing the vanishing North American hunter: a novel framework to address declines in hunters and hunter-generated conservation funds

ABSTRACTAs long as the funding mechanism supporting state wildlife conservation relies heavily on hunter-generated funds, declines in hunter participation are a threat to the conservation of both game and nongame species. To address options to bolster wildlife agency profit from the sale of hunting licenses, we developed a stage-based, stochastic population model of a hunter population, and demonstrate its utility within a decision-making framework to inform state wildlife agency decisions. We evaluated hypothetical youth and adult recruitment-focused outreach programs over 10 years to increase license sale profit. Using our model as the core of a decision analysis, state agencies can set hunter population or license profit targets, and evaluate management actions designed to achieve those objectives. We expect that our approach will provide a valuable framework for anticipating the future of hunting and hunting-generated conservation funds, and can be extended to other user groups, including target shooters and anglers.

Investment in online advertising and return on sales: Does it pay to outsource the services to an advertising agency?

The effect of investing in online advertising on a firm’s financial outcomes can depend on whether or not the development and implementation of advertising campaigns are managed by advertising agencies. Agencies may have experienced professionals or workload to perform these jobs, but the costs are greater. This paper aims to investigate the effects of investments in digital marketing on the financial outcome of a company’s services, comparing whether or not it is outsourced to advertising agencies. The secondary data relates to services advertised and marketed by a firm. We tested the possible moderating effect of outsourcing the service in the relationship between investment in online advertising (Google and Facebook) and return on sales (profit margin), by controlling the effect of covariates. Through four regression analyses, the results showed that outsourcing the service moderates the relationship. Specifically, the higher the amount of advertising investment, the more it pays to outsource the service to an advertising agency in order to generate greater profit margin. But with a low investment value, it does not pay to outsource. This study helps to identify situations in which it pays to outsource digital marketing services to an advertising agency.

Decolonising drug studies in an era of predatory accumulation

The cultural and political-economic valences of psychoactive drugs in the Global South offer critical insights on local and international fault lines of social inequality and profiteering. Historically, in a classic primitive accumulation process the trafficking of industrially produced euphoric substances across the globe have wreaked havoc among vulnerable populations while extracting profit for the powerful. The complex flows of capital generated both by illegal addiction markets and also by the mobilisation of licit public funds to manage their mayhem, however, suggest the contemporary utility of the concept of ‘predatory accumulation’. The Enlightenment-era concept of ‘primitive accumulation’ usefully highlighted state violence and forcible dispossession in the consolidation of European capitalism. A contemporary reframing of these processes as predatory accumulation, however, highlights contradictory, nonlinear relationships between the artificially high profits of illegal drug sales, repressive governmentality and corporate greed. It sets these patterns of destructive profiteering in the context of our moment in history.

Effect of Profitability, Operating Leverage, Firm Size, and Growth Sales on Capital Structure

Capital structure is a financial decision related to the composition of corporate debt, preferred stock and common stock used by the company, managers must be able to raise capital, both from within the company and from outside the company efficiently. The problem of capital structure is an important issue for every company, because good bad corporate capital structure will have a direct influence on its financial position. The importance of determining the structure of capital because it can be a strong foundation for the company to run its production activities, and able to obtain optimal benefits for the company. The purpose of this research is to obtain empirical evidence of profitability, operating leverage, firm size and sales growth on the capital structure of banking companies listed in Indonesia Stock Exchange period 2013-2015. Determination of the sample using purposive sampling method where the determination of the sample is determined using the criteria of banking companies listed on the Indonesia Stock Exchange period 2013-2015 and banking companies that publish the financial statements in succession during the period 2013-2015, obtained 10 companies that meet the criteria in 3 Years of observation resulting in 30 samples. Hypotheses were tested using multiple linear regression analysis techniques. Based on the results of multiple linear regression analysis it is known that profitability and firm size have no effect on capital structure. However, operating leverage and sales growth have a negative and significant influence on capital structure.&#x0D; Keyword: profitability, operating leverage, company size, sales growth, capital structure

Enterprise Competitiveness Assessment Methodology

The purpose of writing this article is to develop an enterprise competitiveness assessment methodology, taking into account the specifics of business process management. The basic characteristics of this property, objective and subjective principles, and a number of initial requirements were taken into account when developing the enterprise competitiveness assessment methodology. It was proposed to calculate two integral indicators: the first provides a static assessment of the competitiveness of an enterprise in comparison with selected competitors at a particular point in time, the second indicator demonstrates in dynamics the level of synchronization of the enterprise with the relevant market. To assess the static component of enterprise competitiveness, the taxonomy method was chosen as the method for constructing an integral indicator. The proposed integral indicator ‒ an indicator of the development level ‒ will evaluate the totality of financial, managerial and marketing indicators that characterize the results of the flow of both basic and equally important management business processes, some significant serving business processes in the enterprise, and take into account the overall assessment of the quality of business processes management. An algorithm was proposed for evaluating the indicator “Quality of Business Process Management” based on the point method. The assessment algorithm can be used both for business entities just starting to implement business process management, and for those who already have successful experience using this approach. The dynamic component of enterprise competitiveness assessment characterizes the level of perception by an enterprise of market conditions. The calculation of the integral indicator of the dynamic estimate was based on the averaging of the four indices based on the geometric average. The indices were built on the basis of a comparison of the following basic indicators and their growth rates: profitability of sales of the enterprise, average profitability of sales in the market, volume of sales of the enterprise, real market capacity.

Financial literacy and business performances improvement of micro, small, medium-sized enterprises in East Java Province, Indonesia

The primary purpose of this study is to examine the relationship between financial literacy and business performance improvement of MSMEs in East Java Province. Data collection from a survey questionnaire of 399 respondents was used to examine the research model. Then, the research model was analysed primarily using logistic regression supported by SPSS V.20 Software. The results of the study show that bookkeeping literacy and budgeting literacy has been proven as the significant predictor of sales growth, profit growth and overall business performance of MSMEs. However, control variables such as gender, education, and experience do not give any critical role in the relationship between financial literacy and business performance improvement of MSMEs. Theoretically, this study proposed that increasing the level of financial literacy for MSMEs managers related to bookkeeping and budgeting skills can enhance the business performance of MSMEs. Practically, the results of the study can be used as a reference for increasing the level of financial literacy for MSMEs managers who are still low in Indonesia. It is suggested to develop well-structured regular training for MSMEs managers regarding bookkeeping and budgeting skills in improving the level of financial literacy and business performance simultaneously.

Pengaruh metode penilaian persediaan terhadap volatilitas return on asset, volatilitas cost of sale, dan volatilitas profit or loss pada perusahaan real estate dan properti yang tercatat di bursa efek indonesia periode 2007 – 2009

The purpose of this study is to investigate the influence of inventory evaluation method toward ROA volatility, cost of sale volatility, and profit or loss volatility in publicly listed real estate and property companies in Indonesian Stock Exchange related to valuation method decision which more describes current cost. This study uses data from 34 samples during year 2007 – 2009. It is an empirical study using regression model with dummy variable. Therefore, before conducting hypothesis testing, the classic assumption testing was done. Beside that, t-test was done and shows there is significant average difference of profit or loss volatility in company using average method and FIFO method. The results show that: Inventory valuation method has significant influence toward profit or loss volatility. But, inventory valuation method doesn’t have significant influence toward ROA and cost of sale volatility using 95% level of confidence. For further studies, it is expected to use longer observation period and other variables to minimize bias that might happen.

Optimization design and computer simulation of enterprise R&amp;D decision model under resource allocation

Taking into account enterprises’ investment on commodity quality and advertisements as important factors that affect sales volume, and the R&D activities are effective measures to reduce production costs and improve commodity competitiveness. Based on the game theory, this paper establishes the price game model among enterprises, and analyzes the relationship of relevant parameters under different competition modes by using computer simulation technology. The simulation results show that the two enterprises will obtain relatively high sales volume and profits in the Stackelberg competition mode, but the absorptive capacity makes the coordination strategy of the R&D stage become unstable. The non-coordination strategy can not only effectively stimulate enterprises to expand the scale of R&D investment to further reduce the cost of production, but also has a positive effect on the follower enterprises in improving sales volume and profits.

TOOLS FOR FINANCIAL SECURITY OF ELECTRIC POWER ENTERPRISES

The achievement of a safe level of financial security of an enterprise in a static and dynamic dimension is provided by the financial equilibrium tool of the enterprise, which is based on balancing the indicators of profitability of sold products, efficiency of asset utilization, improving the cost structure and maximizing the cost of the enterprise. For this purpose, we suggest using the model of sustainable growth of enterprises, which enables estimation and forecasting of indicators that influence the forecast of income growth from sales of products of the enterprise. The results of the analysis of the application of the sustainable growth model at the Western power industry companies revealed their significant dependence on the fluctuations in sales volumes, the turnover of net assets, the factor of the financial leverage and the reinvestment factor. The deepening of analytical research in the direction of identifying the main factors of influence on the economic growth of the enterprise emphasized the importance of the relationship of indicators of sales profitability, efficiency of asset utilization, optimization of cost structure, and maximizing the cost of the enterprise. The determining factor was the simultaneous achievement of many financial indicators, namely: high growth rates of turnover of current assets of the enterprise; high profitability of sales, profitability of net assets, return on equity; acceptable leverage of the financial leverage; economic growth of the enterprise and its high cost. In the proposed model of sustainable growth of indicators it is expedient to introduce a ratio of net assets, which characterizes the efficiency of using own and attracted capital. This model will allow assessing the relationship between the operating and financial activities of the enterprise, to determine the equilibrium between the growth of sales volume due to the growth of domestic sources and the efficiency of asset utilization, optimization of enterprise costs, as well as between the policy of payment of profits and financial policies. The estimation of the activity of electric power enterprises on the model of economic growth allowed revealing the influence of factors on the results of factor analysis of the economic growth factor and to substantiate the main managerial decisions. The application of simplified financial modeling to achieve the level of growth in the enterprise enables predicting the financial parameters of a particular strategic scenario and balancing the goals of the enterprise, namely optimizing the structure of costs (reducing fixed costs, controlling costs, synergistic approach of activities, scale effect), and using assets more effectively (reducing the need for working capital, lower capital intensity, synergy with regard to the use of non-current assets).