Stock Turnover Research Articles

Process Inventory Management in a Production Company

This paper analyses the economics of material management in the 7up Bottling Company, Benin for the duration (2011 – 2015) with a view of designing a process inventory. The specific objectives were to determine the level of efficiency and product improvement in material management, investigate whether the material management practice permit high stock turnover validation and to proffer useful suggestions on how to effectively manage the company materials. The variance analysis and Economic Order Quantity (EOQ) model were used to analyse the data collected. The results showed that the company spent a total of 118.8 million naira for production process and made a total sale of 395.84 million naira. This implies that the company optimises production by adopting the EOQ model into their production process and management. Based on these findings, the study recommends that optimal quantity and timing of material ordering in production process is a key to profit maximisation.

How time horizons and arbitrage cost influence the turnover premium?

ABSTRACTThere are multiple theories for the causal relation between stock turnover and expected return. The risk theory argues that stocks with high turnover generally have high information uncertainty, and thus high subsequent returns are required to compensate for the increased risk. By contrast, the theory of heterogeneous beliefs considers that high-turnover stocks have high speculative values and tend to be overpriced. We find that the information contained in stock turnover is multidimensional and controlling time horizons and arbitrage cost contributes to the reconciliation of the theories of risk compensation and heterogeneous beliefs. Our result shows that expected return is positively correlated with short-term turnover, and negatively correlated with long-term one. The premium on short-term turnover is consistent with the explanations based on transaction cost and liquidity risk. The premium on long-term turnover is much more pronounced among stocks with high arbitrage cost and can be largely explained by the mispricing theory and heterogeneous beliefs.

Power sector asset stranding effects of climate policies

ABSTRACTEnergy sector decarbonization to limit the temperature rise to well-below 2°C will result in stranded assets and capital stock replacement before its technical lifetime ends. In this paper, stranded assets in the global power sector are quantified based on a simplified bottom-up analysis that considers the capital stock turnover of fossil fuel-fired power plants in the G20 countries between 2015 and 2050. Power sector transformation starting now based on accelerated deployment of renewables results in US dollar (USD) 927 billion of global power sector stranded assets by 2050. Stranded coal assets would represent around three-quarters of total stranded assets value and China alone would represent 45% of the total. Delaying action to mitigate climate change until 2030 doubles stranded asset value. Countries should consider assets’ age profile characteristics in their decision making. Early action and avoidance of investments in new carbon-intensive assets can minimize stranded asset risks.

Implications of water constraints on electricity capacity expansion in the United States

The development of new electricity generation capacity is constrained by water resource availability. However, the sufficiency of available water resources is rarely incorporated into the planning of electricity capacity expansion in the United States. Previous studies on the implications of water constraints on US electricity generation are limited in terms of scale and robustness. Here, we extend previous studies by including physical water constraints within a state-level model of the US energy system embedded within a global integrated assessment model (GCAM-USA) that integrates both supply and demand effects under a consistent framework. We show that water constraints have two general effects across the United States: (1) to increase the cost of electricity generation, which results in slightly reduced electrification of end-use sectors, and (2) to incentivize early retirement of water-intensive technologies before the end of their designed lifetimes, while simultaneously boosting investment in less water-dependent technologies. Our results suggest that water availability constraints may cause substantial capital stock turnover and result in non-negligible economic costs for the western United States, whereas fewer impacts may be anticipated in the eastern United States. Our work emphasizes the need to integrate water availability constraints into electricity capacity planning and highlights the state-level challenges to facilitate regional strategic resource planning. Water constraints can affect plans to expand electricity capacity. This study shows that in the United States such constraints can increase the cost of electricity generation with slightly reduced electrification of end-use sectors, and can incentivize early retirement of water-intensive technologies.

Market Risk and Financial Performance of Non-Financial Companies Listed on the Moroccan Stock Exchange

This study examines the effect of market risk on the financial performance of 31 non-financial companies listed on the Casablanca Stock Exchange (CSE) over the period 2000–2016. We utilized three alternative variables to assess financial performance, namely, the return on assets, the return on equity and the profit margin. We used the degree of financial leverage, the book-to-market ratio, and the gearing ratio as the indicators of market risk. Then, we employed the pooled OLS model, the fixed effects model, the random effects model, the difference-GMM and the system-GMM models. The results show that the different measures of market risk have significant negative influences on the companies’ financial performance. The elasticities are greater following the degree of financial leverage compared with the book-to-market ratio and the gearing ratio. In most cases, the firm’s age, the cash holdings ratio, the firm’s size, the debt-to-assets ratio, and the tangibility ratio have positive effects on financial performance, whereas the debt-to-income ratio and the stock turnover hurt the performance of these non-financial companies. Therefore, decision-makers and managers should mitigate market risk through appropriate strategies of risk management, such as derivatives and insurance techniques.

Effects of monetary investment, payback time and firm characteristics on electricity saving in energy-intensive industry

Our study looked at the extent to which firm characteristics such as total firm capital affect electricity saving in energy-intensive industry in Sweden from 2007 to 2015. Specifically, the most influential variables for systematic variation in electricity saving in the energy-intensive companies participating in Sweden’s voluntary programme for improving energy efficiency in energy-intensive industry (the PFE) were studied by analysing monetary investment, payback time and firm characteristics. Monetary investment and payback time influenced electricity savings during the PFE more than firm characteristics, with monetary investment being most influential. Nevertheless, the total systematic variation in firm characteristics may account for ∼16% of the systematic variation in electricity saving, where ∼74% (32 of 43) of the studied firm characteristics seemed to merit further investigation and where ∼49% (21 of 43) of firm characteristics appeared most influential. The most influential firm characteristics were total firm capital, stock turnover ratio, machinery, short-term liabilities per turnover ratio and goodwill. The overall results showed that firm characteristics can influence a firm’s energy-saving activities and indicated a tendency for more energy savings in companies that were financially weaker or had done less work to improve energy efficiency prior to the PFE.

Does Chinese Financial Market Information Promote Listed Manufacturing Firms’ Productivity?

There have been many research studies that have examined the impact of financial development on economic growth, but few of them have explored this problem from the perspective of financial market information. In this paper, we investigate whether the stock price informativeness affect the listed firms’ sustainable growth by using the Chinese manufacturing listed companies’ data from 2007 to 2017. Specifically, we use the stock price nonsynchronicity and turnover rate to measure stock price informativeness, and the economic growth sustainability is proxied by the listed companies’ total factor productivity, which is the driving force of firms’ sustainable and steady growth. We find that higher stock price informativeness is associated with higher total factor productivity, no matter whether the stock price informativeness is proxied by the stock price nonsynchronicity or turnover rate. This finding is robust when we mitigate for endogeneity issues, and when we use the return on assets (ROA) as an alternative proxy for economic growth. Our results show that the stock price informativeness can significantly improve the total factor productivity of the listed companies, and play an important role in the sustainable development of listed manufacturing enterprises.

МАТЕМАТИЧНА МОДЕЛЬ «РОЗМІЩЕННЯ МЕТАЛОПРОКАТУ НА СКЛАДАХ ГОТОВОЇ ПРОДУКЦІЇ»

The article describes the mathematical model of the location of metal rolling in the warehouses of finished products. The mathematical model will enable the arrival of metal rolling in the warehouse at each position to search for the appropriate location, taking into account the category of ABC analysis, geometric features, storage method and the number of metal rolling. ABC-analysis in stock is a method that allows to classify the stocks of metal rolling by their degree of importance by division into three categories. As a criterion for classification it is suggested to use the coefficient of turnover of metal rolling. An algorithm for placing metal rolling in a partially filled warehouse is presented. The choice of the sector for placement is determined by the lowest load value at the current time. Target storage of the nomenclature in one place of storage - no more than 2 positions. The calculation takes into account the presence of separation (wooden gaskets) between bundles of nomenclature items. The target value for the width of the warehouse space is one meter between the four places of storage. The target value for the length of the warehouse space is one meter between storage locations. The division of warehouses into sectors takes into account inventory storage areas and service processing (cutting) areas of products. Mathematical model of metal rolling placement in finished goods warehouses. One of the main indicators of the efficiency of the warehouse enterprise is the turnover of stocks of rolled metal. Inventory turnover ratio is the ratio of stock shipments to its assets (balances). This indicator makes it clear how quickly the stock that is in stock is consumed. The inventory turnover ratio shows how efficiently and successfully an entity uses its assets to generate revenue. The following coefficients have been introduced to evaluate the efficiency of the mathematical model: the coefficient of use of the warehouse space, the coefficient of utilization of the volume of the warehouse, the cargo tension of the nomenclature.

Impact of futures expiration on underlying stocks: intraday analysis for Warsaw Stock Exchange

Based on high-frequency data, this study is concerned with the effects of stock futures expirations on the spot market on the Warsaw Stock Exchange. The typical effects of futures expirations include the impact on the trading volume of the underlying asset, abnormally high volatility of the returns on expiration day, and price reversal after expiration. In line with observations of the effects for other markets, it can also be noticed that futures expiration is a source of rises in trading volume for the WSE. There is an observed significant abnormal trading volume and turnover of stocks that are underlying assets of futures as well as an increased volatility of these stocks’ returns on expiration day. An additional analysis conducted during three sub-periods (around April 15, 2013, and May 31, 2015) checks whether the implementation of a new transaction system on the WSE and the changes in short-selling rules influenced the expiration-day effects. The results suggest that the implementation of a new regulation by the EU on the WSE concerning short selling in trading on stock exchanges had a significant impact on expiration-day effects.

An Empirical Study about the Impact of China’s Financial Industry Development on Economic Growth

Since the reform and opening up, China’s economic level has witnessed rapid growth, while the financial industry is gradually growing. This paper mainly explore the relationship between the development of China’s financial industry and the economic situation. To measure the economic growth by GDP; to measure the development of domestic financial industry by financial development indicators such as currency and quasi-currency, gold reserve, foreign exchange reserve, the number of domestic listed companies (A, B shares), total stock issuance capital, total stock market value, stock turnover, etc. Using the relevant data from 1992 to 2017, this paper explores the relationship between the two by means of multiple regression model and principal component analysis. The research shows that with the increase of money supply and the number of listed companies, as well as the expansion of the total size of the stock market, China’s economic development has improved significantly and accordingly put forward relevant suggestions.

A New Investor Sentiment Index Model and Its Application in Stock Price Prediction and Systematic Risk Estimation of Bull and Bear Market

Many studies in recent years have shown that investor sentiment affects investor decision-making, which in turn affects stock market volatility and the direction of stock market prices. Since behavioral finance researchers find that linear combinations of stock turnover and popularity indices can greatly reflect stock investor sentiment, this paper aims to construct a new investor sentiment index that can be reasonably applied to predict stock market risk by selecting rational factors. A new investor sentiment index model is first proposed by combining specific monthly new account ratio (SNIA), monthly turnover rate (TOR), popularity index AR, delayed yield (DY) and using principal component analysis approach. Secondly, the indicator is statistically tested. The results of the correlation analysis show that the investor sentiment index is positively correlated with the monthly rate of return, and the result of causal analysis reveals that the investor sentiment index is the Granger cause of the change in yield. Thirdly, a new method is designed to predict the stock price trend by using the presented investor sentiment index. Finally, based on VaR and CoVaR model the investor sentiment index can be utilized to forecast and estimate of systematic risk in the bull or bear market.

Inventory Management: An Impetus for Increased Profitability in Manufacturing Firms

This study evaluated the degree of relationship between inventory management and profitability of manufacturing firmsin Nigeria. International Breweries Plc was adopted as case study. Secondary data were sourced from the company’s annual reports for the period of 10 years. A simple linear regression model was specified to test the correlation between variables used. Stock turnover ratio was used to capture the relationship between costs of sales incurred in generating total revenue and the inventory utilized in for production and distribution. The result generated from the study showed that the company operates an efficient Inventory Management System which has strong influence on its profitability. The correlation coefficient (r) was 85.3% while r2 was 72.7%. The study concluded that the efficient inventory management contributed significantly to profitability of manufacturing companies. The study recommended that manufacturing firms should focus on improving on their inventory management system by adopting a more efficient approach in utilizing inventory items.

Mali Başarısızlık Tahminlemesinde Sektör Bazlı Bir Karşılaştırma - A Sector-Based Comparison of Financial Distress Prediction

It is important to know the factors that cause financial distress in companies for being able to take preventive measures and reduce losses. Financial distress estimation provides important information about firms and sectors to stakeholders of the economy that can be listed as managers, lenders, investors, independent auditors and governments. Within the scope of this study, financial distress of companies operating in IT, manufacturing and service sectors, which are traded in Istanbul Stock Exchange, have been estimated and it has been aimed to reveal sectoral differences in estimation. Financial distress estimations of the companies in the Technology Transportation Communication sector, Food Drink Tobacco sector and Wholesale Retail Hotel Restaurant sector traded in Borsa Istanbul were made.This study uses logistic regression as the analysis technique by using the balance sheet and income statements data between the dates of 31.12.2008 and 31.12.2017.The likelihood of companies’ financial distress were calculated one year in advance the existence of the distress. According to the findings; the stock turnover rate in the Technology Transportation Communication sector, the current ratio in Food Drink Tobacco sector and the ratio of Profit Before Tax / Equity in Wholesale Retail Hotel Restaurant sector are the main indicators of the financial distress.

Online search activities and investor attention on financial markets

We investigate the online search activities regarding stock markets and their applications on forecasting trading volumes, stock turnover, and stock volatility. Following Da et al. (2011), we use the Google Search Volume Index (SVI) as a direct proxy for individual investors' attention. For Taiwan's top 50 firms, we show that online search activities are significantly correlated with stock turnover, trading volumes and stock volatility, indicating that online search activities reflect individual investors' attention and thus are associated with investors' investment behaviors.

Is the environmental opportunity of retrofitting the residential sector worth the life cycle cost? A consequential assessment of a typical house in Quebec

The residential sector has a major role to play in the transition to green energy. The heating and cooling of buildings represents 40% of global energy consumption, while vast energy savings potential remains largely unexploited. Given the low turnover of housing stock and ambitious emission reduction targets, most of this potential will require retrofitting existing buildings. In this study, we investigate how to best take advantage of retrofits in the residential sector of Quebec (Canada) using environmental and economic criteria. Within the province, heating is mainly powered by electricity from renewable sources. We propose an approach based on a consequential life cycle assessment that focuses on marginal impacts combined with “consequential life cycle costing.” Seven alternatives using different heating systems and building envelopes are compared to a reference case, which consists of a typical detached house heated with electric baseboards. This approach permits an assessment of cost-efficiency and sustainable technological solutions. Our results show that the amount of energy saved by retrofits (especially for air source heat pumps with and without building envelop improvements) generates environmental and economic benefits. Furthermore, if the saved electricity is exported to replace natural gas, then the local electricity savings is quite beneficial. These results provide key new insights on the energy policies affecting the building sector, especially for regions in cold climates such as Quebec.

Leveraged Share Repurchase: A Tax-Based Explanation

This paper investigates a corporate tax-based and shareholder tax-based explanation for a firm’s decision to finance a stock repurchase by utilizing debt, commonly referred to as a leveraged share repurchase. I find that during tax regimes in which corporate tax rates are more favorable for the use of debt, and during tax regimes in which shareholder tax rates are more favorable for firm distributions of funds to shareholders through stock repurchases, firms are more likely to aggressively utilize debt to undertake a leveraged share repurchase. Further supporting this claim, I find that firms aggressively utilize debt to fund leveraged share repurchases when they are likely to have low share turnover, suggesting that a greater percentage of shareholders qualify for preferential long-term capital gains. In contrast, I find that a firm is less likely to undertake a leveraged share repurchase if the firm has high stock turnover, low stock appreciation, or has greater ownership by short-term institutional shareholders. Overall, my results support the notion that corporate and shareholder-level taxes influence corporate leveraged share repurchases.

China's building stock estimation and energy intensity analysis

Reliable and objective data regarding building stock is essential for predicting and analyzing energy demand and carbon emission. However, China's building stock data is lacking. This study proposes a set of China building floor space estimation method (CBFSM) based on the improved building stock turnover model. Then it measures China's building stocks by vintage and type from 2000 to 2015, as well as building energy intensity (national level and provincial level) and energy-efficient buildings. Results showed that total building stocks increased significantly, rising from 35.2 billion m2 in 2000 to 63.6 billion m2 in 2015, with the average growth rate 4.0%. The deviations were well below 10% by comparing with China Population Census, which validated the reliability of CBFSM and the results. As for energy intensity, urban dwellings and rural dwellings showed relatively stable and increasing trend respectively. The commercial building energy intensity saw a downward trend during “12th Five Year Plan” period. This indicated the effectiveness of building energy efficiency work for commercial buildings since 2005.38.6 billion m2 residential dwellings and 5.7 billion m2 commercial buildings still need to be retrofitted in future. CBFSM can overcome shortages in previous studies. It can also provide Chinese government with technical support and data evidence to promote the building energy efficiency work.

A methodology for bottom-up modelling of energy transitions in the industry sector: The FORECAST model

Bottom-up energy models can support strategic decision-making and can help to manage an efficient transition to a low-carbon energy system. The manufacturing industry accounted for about 19% of EU-wide greenhouse gas emissions in 2014, which underlines the importance of this sector for model-based decarbonisation assessments.This paper describes the methodology of the FORECAST model. FORECAST is a bottom-up simulation model used to develop long-term scenarios for the future energy demand of industry, services and household sectors. In this study, we discuss the model in the light of developing transition scenarios for the decarbonisation of the industry sector. In doing so, we focus on the model's structure and simulation algorithms, and provide illustrative results.The FORECAST model includes a broad range of mitigation options combined with a high level of technological detail. Technology diffusion and stock turnover are explicitly considered to allow insights into transition pathways. The model further includes different policy levers to improve its applicability as a policy support tool. The model is designed to cover the entire industry sector from major energy-intensive processes to the numerous less energy-intensive sub-sectors and applications.The concluding discussion suggests future research directions to improve the contribution industry sector models can make to supporting the industrial energy transition.

Estimating urban residential building-related energy consumption and energy intensity in China based on improved building stock turnover model

Accurate estimation of urban residential building-related energy consumption (URBEC) and energy intensity per unit floor area at the national level has significant implications for the analysis of carbon emission peaks. However, reliable data on China's building floor space (BFS) are lacking, resulting in unclear energy intensity levels. This study proposes a China BFS estimation method (CBFSEM) based on improved building stock turnover model. Using CBFSEM, it estimates the BFS of historic urban dwelling stock, the demolished and newly built dwelling from 2000 to 2015. It then estimates the corresponding energy consumption and intensity based on the obtained urban residential BFS data. Results showed that total URBEC in China increased dramatically from 217.1 Mtce in 2000 to 417.2 Mtce in 2015 with an average annual growth rate of 4.45%. China's total dwelling stock almost doubled, from 10.6 billion m2 in 2000 to 27.4 billion m2 in 2015 with an annual growth rate of 6.56%. The operational energy consumption accounted for approximately 70% of total URBEC and the building material production energy intensity was the highest in total URBEC, >60 kgce/m2. A comparison with the China Population Census showed that the deviations were well below 8%, which indicated the reliability of the CBFSEM and the estimated results. In general, this study fills the gap in available data and addresses the shortage of estimation methods for BFS and energy intensity. It also provides the government with technical support and scientific evidence to promote building energy efficiency.

Immigration and house prices under various labour market structures in England and Wales

This article estimates the impact of immigration on local house prices under various local labour market structures in England and Wales. Typically, for the nation as a whole, newly arriving immigrants add to the overall housing demand; this would in general push up house prices when facing an upward-sloping supply curve. However, sorting and native-outmigration response to immigration may change the dynamics and impact at the ‘local’ level, depressing house prices through income change. We use data on England and Wales to investigate the local house price effect of immigration when taking into account the local labour market structure of the areas, particularly with respect to employment density and average socioeconomic profile (skill) of workers. We found that in high density of employment areas but with a majority of the occupations in low skill sets, there is a negative house price effect led by immigrant inflows, and this might be due to a type of tenure ‘downgrade’ in the area as immigrants increase the rate of free renting. Free renters are less likely to participate in the housing market themselves and an increase in the rate of this form of tenure could also reduce their mobility further, hence lead to lower levels of housing stock turnover and transaction-related renovation; as a result, both housing quality and house prices fall. The evidence is in addition to the native flight argument typically found in the literature to explain house price depreciation led by immigration.