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Article
Publication date: 1 January 1981

J.C. Drury

The origins of financial ratio analysis can be traced back to the first decade of the twentieth century. It began with the development of a single ratio, the current ratio

Abstract

The origins of financial ratio analysis can be traced back to the first decade of the twentieth century. It began with the development of a single ratio, the current ratio, for a single purpose—the evaluation of credit worthiness. Today ratio analysis involves the use of several ratios by a variety of users including credit lenders, credit rating agencies, investors and management.

Details

Management Decision, vol. 19 no. 1
Type: Research Article
ISSN: 0025-1747

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Article
Publication date: 11 March 2019

Rakesh Ranjan, Subrata Kumar Ghosh and Manoj Kumar

The probability distribution of major length and aspect ratio (major length/minor length) of wear debris collected from gear oil used in planetary gear drive were analysed…

Abstract

Purpose

The probability distribution of major length and aspect ratio (major length/minor length) of wear debris collected from gear oil used in planetary gear drive were analysed and modelled. The paper aims to find an appropriate probability distribution model to forecast the kind of wear particles at different running hour of the machine.

Design/methodology/approach

Used gear oil of the planetary gear box of a slab caster was drained out and charged with a fresh oil of grade (EP-460). Six chronological oil samples were collected at different time interval between 480 and 1,992 h of machine running. The oil samples were filtered to separate wear particles, and microscopic study of wear debris was carried out at 100X magnification. Statistical modelling of wear debris distribution was done using Weibull and exponential probability distribution model. A comparison was studied among actual, Weibull and exponential probability distribution of major length and aspect ratio of wear particles.

Findings

Distribution of major length of wear particle was found to be closer to the exponential probability density function, whereas Weibull probability density function fitted better to distribution of aspect ratio of wear particle.

Originality/value

The potential of the developed model can be used to analyse the distribution of major length and aspect ratio of wear debris present in planetary gear box of slab caster machine.

Details

Industrial Lubrication and Tribology, vol. 71 no. 2
Type: Research Article
ISSN: 0036-8792

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Article
Publication date: 8 May 2009

V. Riihimäki

The purpose of this paper is to analyze the suitability of the real option methods in the valuation of WiMAX networks. Particularly, the shapes of the probability

Abstract

Purpose

The purpose of this paper is to analyze the suitability of the real option methods in the valuation of WiMAX networks. Particularly, the shapes of the probability distributions for the investment costs and net present values (NPV) are examined.

Design/methodology/approach

The study analyzes the costs and NPV distributions by simulating an investment project in a rural area. The paper examines the influences of different uncertainty models and the shapes of the resulting investment costs, NPVs, and NPV ratios. The simulated option values are compared to results from different analytical equations.

Findings

The analysis in this study shows that the shape of the uncertainty – or error – in the parameters does not affect the shapes of the investment costs or NPV distribution. Instead, the subject of the uncertainty – i.e. the parameters for which the uncertainty is modeled – matters.

Practical implications

The study shows that the uncertainties and opportunities in network investments may increase the value of the projects dramatically and thus they should be taken into account. The shape of the NPV distribution varies depending on the technology and construction strategy of the network. This makes the real option valuation challenging since the assumptions of the valuation models must be satisfied for reliable results. Analytical option valuation formulas give the same results as simulation, only if the assumptions are sufficiently fulfilled and the parameters properly estimated.

Originality/value

The uncertainty in the service rate growth or population growth parameter influences the resulting distributions. The investment costs are positively skewed and can be approximated by a log‐normal distribution. This makes NPV negatively skewed, which suits badly in the existing analytical option valuation methods assuming log‐normal assets. Also, the NPV ratio is correlated with the investment costs.

Details

info, vol. 11 no. 3
Type: Research Article
ISSN: 1463-6697

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Article
Publication date: 14 April 2014

Nada Lahrech, Abdelmounaim Lahrech and Youssef Boulaksil

The purpose of this paper is to assess whether Islamic banks are transparent regarding profit (and loss) sharing to investment account holders. Another objective is to…

Abstract

Purpose

The purpose of this paper is to assess whether Islamic banks are transparent regarding profit (and loss) sharing to investment account holders. Another objective is to appraise whether Islamic banks' performance affects management incentives to distribute profit (and loss) to investment account holders.

Design/methodology/approach

To investigate the research issue, the authors conducted an empirical study. Data of 25 global operating Islamic banks have been collected and analyzed for the period 2006-2010. The authors also developed a mathematical model based on the generalized least-squares principle.

Findings

The research results showed that enhancing transparency will prevent Islamic banks from shadowing their profit allocation practices and place investment account holders in a better position to manage their invested funds. The study also showed that bettering Islamic banks’performance will induce them to manager profit-sharing investment account holders’ funds under bonafides.

Research limitations/implications

The main limitation is data availability. The maximum number of Islamic banks that disclose financial data covering the period of 2006-2010 limited the scope of the study to 25 banks.

Practical implications

The findings are very valuable for designing policies and standards as well as for the enforcement of these standards to improve transparency in Islamic banking.

Originality/value

The study outcome is vital to many parties involved in the Islamic banking field and can be taken as a strong foundation to make appropriate actions that would help grow and sustain Islamic banking development globally.

Details

International Journal of Islamic and Middle Eastern Finance and Management, vol. 7 no. 1
Type: Research Article
ISSN: 1753-8394

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Article
Publication date: 1 November 2000

A.H Amershi and E.H Feroz

Conducts an exploratory analysis of the probability distribution of the ratio total debt/total invest capital, to determine if the occurrence of the Finobacci golden mean…

Abstract

Conducts an exploratory analysis of the probability distribution of the ratio total debt/total invest capital, to determine if the occurrence of the Finobacci golden mean and ratio, as possible values of this ratio, are random or indicative of firm survival. Uses highly technical mathematical and algebraic explanatory means to emphasize points. Adopts the use of figures and tables to aid explanation. Concludes that, although some progress has been made, more sophisticated analysis is required.

Details

Managerial Finance, vol. 26 no. 11
Type: Research Article
ISSN: 0307-4358

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Article
Publication date: 4 July 2019

Shijing Liu, Hongyu Jin, Chunlu Liu, Benzheng Xie and Anthony Mills

Targeting public–private partnership (PPP) rental retirement villages, the purpose of this paper is to bring forward the solution of insufficient research in a…

Abstract

Purpose

Targeting public–private partnership (PPP) rental retirement villages, the purpose of this paper is to bring forward the solution of insufficient research in a non-competitive guarantee (a restrictive agreement) towards the compensation and guarantee costs in consideration of benefit redistribution if the governments are unable to keep the promise on guarantee provision.

Design/methodology/approach

Real option principles are applied to assess the public–private investment proportions and the expected return rates of the private sector in a non-competitive guarantee and analyse their effects on the public–private benefit and risk allocations as well as the success of the project. Instead of granting direct capital support, this research accomplishes the compensation of non-competition guarantee by adjusting the project benefit distribution ratios between the government and the private sector to achieve the option value of the guarantee. An empirical example with alternative scales, which is developed from an existing rental village in Geelong, is used to numerically verify the research process.

Findings

The results illustrate that the option value of the non-competition guarantee plays an important role in supporting the implementation of the PPP rental retirement village projects. The option value of the non-competition guarantee has a close relationship with the guarantee level and the government guarantee cost, which is positively correlated with the guarantee level and negatively correlated with the government guarantee cost. To reduce the government guarantee cost, the government should carefully determine the public–private investment proportion, appropriately control the return rate of the private sector and approve the construction of the new project after the investment recovery of the private sector.

Research limitations/implications

This research mainly focusses on the economic loss of the government due to the guarantee responsibility. Further research could be conducted to determine the guarantee level more precisely and take the social cost of the government guarantees into consideration.

Originality/value

This research is the first attempt to investigate the government compensation and costs of non-competition guarantee for PPP rental retirement village projects and will enhance the understanding of the nature of PPP applications. The evaluation process and the implementation of the compensation through the adjustment of benefit distribution provides a comprehensive method to analyse the non-competition guarantee of PPP projects and help the parties negotiate in good faith to agree on a method of redress.

Details

Engineering, Construction and Architectural Management, vol. 27 no. 1
Type: Research Article
ISSN: 0969-9988

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Article
Publication date: 13 May 2019

Duarte Trigueiros

Financial ratios are routinely used as predictors in modelling tasks where accounting information is required. The purpose of this paper is to discuss such use, showing…

Abstract

Purpose

Financial ratios are routinely used as predictors in modelling tasks where accounting information is required. The purpose of this paper is to discuss such use, showing how to improve the effectiveness of ratio-based models.

Design/methodology/approach

First, the paper exposes the inadequacies of ratios when used as multivariate predictors. It then develops a theoretical foundation and methodology to build accounting-based models. Experiments then verify that this methodology outperforms the conventional methodology.

Findings

From plausible assumptions about the cross-sectional behaviour of accounting data, the paper shows that the effect of size, which ratios remove, can also be removed by modelling algorithms, which facilitates the discovery of meaningful predictors and leads to markedly more effective models.

Research limitations/implications

The paper covers cross-sectional modelling only, accounting identities and other interactions between line items are ignored, the methodology is especially appropriate in tasks where the effectiveness of the model is seen as a valued quality.

Practical implications

The need to select ratios among many alternatives is avoided, models become more accurate and robust, less biased and less likely to generate missing values, model construction is less arbitrary.

Originality/value

The paper provides a solid foundation for accounting-based modelling, by developing a whole new methodology that can end the uncritical use of modelling remedies currently prevailing and release the full relevance of accounting information when utilised to support investments and other value-bearing decisions.

Details

Journal of Applied Accounting Research, vol. 20 no. 2
Type: Research Article
ISSN: 0967-5426

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Article
Publication date: 3 April 2017

R. Askari, M.F. Ikram and S. H. Hejazi

Thermal conduction anisotropy, which is defined by the dependency of thermal conductivity on direction, is an important parameter in many engineering and research studies…

Abstract

Purpose

Thermal conduction anisotropy, which is defined by the dependency of thermal conductivity on direction, is an important parameter in many engineering and research studies such as the design of nuclear waste depositional sites. In this context, the authors aim to investigate the effect of grain shape in thermal conduction anisotropy using pore scale modeling that utilizes real shapes of grains, pores and throats to characterize petrophysical properties of a porous medium.

Design/methodology/approach

The authors generalize the swelling circle approach to generate porous media composed of randomly arranged but regularly oriented elliptical grains at various grain ratios and porosities. Unlike previous studies that use fitting parameters to capture the effect of grain–grain thermal contact resistance, the authors apply roughness to grains’ surface. The authors utilize Lattice Boltzmann method to solve steady state heat conduction through medium.

Findings

Based on the results, when the temperature field is not parallel to either major or minor axes of grains, the overall heat flux vector makes a “deviation angle” with the temperature field. Deviation angle increases by augmenting the ratio of thermal conductivities of solid to fluid and the aspect ratios of grains. In addition, the authors show that porosity and surface roughness can considerably change the anisotropic properties of a porous medium whose grains are elliptical in shape.

Originality/value

The authors developed an algorithm for generation of non-circular-based porous medium with a novel approach to include grain surface roughness. In previous studies, the effect of grain contacts has been simulated using fitting parameters, whereas in this work, the authors impose the roughness based on the its fractal geometry.

Details

International Journal of Numerical Methods for Heat & Fluid Flow, vol. 27 no. 4
Type: Research Article
ISSN: 0961-5539

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Article
Publication date: 1 July 2006

Michael Bourlakis and Constantine Bourlakis

To investigate the integration process of retailer's information technology strategy within logistics strategy and to find out those aspects of the retailer's distribution

Abstract

Purpose

To investigate the integration process of retailer's information technology strategy within logistics strategy and to find out those aspects of the retailer's distribution and operational performance that are mostly influenced via that integration.

Design/methodology/approach

A qualitative case study methodology is used where the managers of the major domestic and multinational firms operating in the Greek food multiple retail market are interviewed. The integration process of the information technology and logistics strategies of these retail firms is linked to their relevant distribution and operational functions. Secondary data for the Greek food multiple retail sector are also employed.

Findings

The findings show that logistics and information technology strategies are developed and implemented in a parallel way by both local and multinational food multiple retailers in Greece. A financial ratio analysis carried out for these firms, suggests that multinational firms possess greater operational efficiency at both secondary and in‐store distribution operations compared to domestic firms, something that is largely attributed to their integration of logistics and information technology operations. Multinational firms' superior operational efficiency is also resulting in a higher profitability performance.

Originality/value

The paper proposes that a successful integration process between the logistics and the information technology functions seems to confer a competitive advantage upon retailers' distribution operations. The paper will assist retail managers and researchers responsible for the development of logistics and information technology strategies to understand that fully absorbed information technology and logistics strategies and operations will be rewarded with superior pecuniary and operational efficiency benefits.

Details

Journal of Enterprise Information Management, vol. 19 no. 4
Type: Research Article
ISSN: 1741-0398

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Article
Publication date: 1 November 2004

Dmitry V. Vedenov, Mario J. Miranda, Robert Dismukes and Joseph W. Glauber

An economic analysis is presented of the Standard Reinsurance Agreement (SRA), the contract governing the relationship between the Federal Crop Insurance Corporation and…

Abstract

An economic analysis is presented of the Standard Reinsurance Agreement (SRA), the contract governing the relationship between the Federal Crop Insurance Corporation and the private insurance companies that deliver crop insurance products to farmers. The paper outlines provisions of the SRA and describes the modeling methodology behind the SRA simulator, a computer program developed to assist crop insurers and policy makers in assessing the economic impact of the Agreement. The simulator is then used to analyze how the SRA affects returns from underwriting crop insurance. The results are presented in aggregate and also at the regional and individual company levels.

Details

Agricultural Finance Review, vol. 64 no. 2
Type: Research Article
ISSN: 0002-1466

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