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Article
Publication date: 1 March 1996

Frank Engert

Demands for accountability in education are not a new phenomenon, however, they have increased significantly in the recent past and have encompassed not only educational…

Abstract

Demands for accountability in education are not a new phenomenon, however, they have increased significantly in the recent past and have encompassed not only educational outcomes but also efficiency. In this study, ratio measures, similar to those recommended by the GASB, were compared to measures of relative efficiency determined through the use of data envelopment analysis (DEA). The consistency of the two approaches in distinguishing between relatively efficient and inefficient school districts was examined. It was found that compared to the DEA approach, the ratio measures, may be unable to provide reliable information for educational decision making.

Details

Journal of Public Budgeting, Accounting & Financial Management, vol. 8 no. 2
Type: Research Article
ISSN: 1096-3367

Open Access
Article
Publication date: 15 July 2021

Ali Saleh Ahmed Alarussi

This paper examines the financial ratios that may have a significant effect on the efficiency in Malaysian listed companies. Nine financial ratios measure seven variables…

4807

Abstract

Purpose

This paper examines the financial ratios that may have a significant effect on the efficiency in Malaysian listed companies. Nine financial ratios measure seven variables which are firm visibility, tangibility, working capital, leverage, liquidity, productivity and profitability.

Design/methodology/approach

Data are collected from 108 public listed companies in Malaysia. The data extracted from companies' annual reports for three years 2012–2014. STATA software analysis is used to examine these relationships.

Findings

The results show each of tangibility and liquidity have negative relationships with efficiency ratio. In against of that, profitability, working capital and productively positively link to efficiency. Leverage which is measured by two ratios – Debt ratio and Debt equity ratio – shows mix results. Debt ratio shows a positive but not significant relationship with efficiency ratio and Debt equity ratio shows a negative significant relationship with efficiency ratio.

Practical implications

The results benefit companies, investors, economists and governments regulators in Malaysia-to understand the efficiency determinants, so help to make the right decision to enhance the efficiency level in companies which leads to enhance the amount of investments which in turn, enhance the country's economy in general.

Originality/value

This study differs than previous studies number of aspects: first the study covers a three years' period between 2012 and 2014, this period presents the movement of Malaysian current into depreciation with more than 45 percent of its value. Second, in the Malaysia context, this study examines new variables such as firm visibility, tangibility, and productivity. Third, the results of this study will help managers, shareholders, investors, regulators and other parties to make right decisions that will enhance the level of firm efficiency which enhances the investments and the economy of Malaysia.

Details

Asian Journal of Economics and Banking, vol. 5 no. 2
Type: Research Article
ISSN: 2615-9821

Keywords

Article
Publication date: 1 February 1998

Minwir Al‐Shammari and Anwar Salimi

This paper seeks to model and evaluate the comparative operating efficiency of banks using a non‐parametric methodology known as the data envelopment analysis (DEA). The…

2378

Abstract

This paper seeks to model and evaluate the comparative operating efficiency of banks using a non‐parametric methodology known as the data envelopment analysis (DEA). The paper adopts a modified version of DEA in which no inputs are specified. The only variables considered are the financial ratios. The results obtained suggest that the majority of banks investigated are fairly inefficient over the period 1991‐94. In addition to calculating efficiency scores for all banks in the sample, the study results revealed the composite reference set and their shadow prices, major determinants of banks’ relative performance, and the target financial ratios.

Details

Logistics Information Management, vol. 11 no. 1
Type: Research Article
ISSN: 0957-6053

Keywords

Article
Publication date: 1 April 2004

M. Oberholzer and G. van derWesthuizen

When bank managers are asked to comment on the bank’s performance over the past year, most would quote either their bank’s return on equity or return on assets. If these…

Abstract

When bank managers are asked to comment on the bank’s performance over the past year, most would quote either their bank’s return on equity or return on assets. If these measures were higher than those of their peers, the bank is referred to as a high‐performance bank. The ratios involved are financial ratios and the main problem with this approach is its reliance on comparable ratios. To find suitable comparable standards (norms) is quite difficult, and when the standard (norm) is not appropriate, the comparison may mislead the analyst. A measurement tool that can compensate for the weaknesses in financial ratios is therefore needed. One such tool that can be used to measure bank performance is Data Envelopment Analysis (DEA). The objective of this article is to draw a comparison between the results of financial ratios (as a conventional performance measurement) and the results obtained by means of DEA with regard to the performance evaluation of the ten regional offices of one of South Africa’s larger banks.

Details

Meditari Accountancy Research, vol. 12 no. 1
Type: Research Article
ISSN: 1022-2529

Keywords

Article
Publication date: 4 November 2013

Levi Alan Russell, Michael R. Langemeier and Brian C. Briggeman

– This paper aims to develop and utilize a conceptual framework to examine the impact of liquidity and solvency on cost efficiency for a sample of Kansas farms.

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Abstract

Purpose

This paper aims to develop and utilize a conceptual framework to examine the impact of liquidity and solvency on cost efficiency for a sample of Kansas farms.

Design/methodology/approach

A standard cost-efficiency model is modified to incorporate liquidity and solvency ratios. Tobit regressions are used to determine the impact of farm characteristics on improvements in efficiency.

Findings

Results confirm that liquidity and solvency measures have a significant impact on improving cost efficiency. Farms with larger expenditures on purchased inputs relative to capital were less likely to improve efficiency when liquidity and solvency were considered.

Originality/value

To the authors' knowledge, the paper is the first to add liquidity and solvency ratios to the cost-efficiency model developed by Färe et al. for the analysis of farms.

Details

Agricultural Finance Review, vol. 73 no. 3
Type: Research Article
ISSN: 0002-1466

Keywords

Article
Publication date: 11 May 2015

Thanh Pham Thien Nguyen and Son Hong Nghiem

The purpose of this paper is to examine the interrelationships among default risk, capital and efficiency of the Indian banking system over 1990-2011. This study also took…

1601

Abstract

Purpose

The purpose of this paper is to examine the interrelationships among default risk, capital and efficiency of the Indian banking system over 1990-2011. This study also took into account the impact of ownership on these interrelationships

Design/methodology/approach

This paper employed Data Envelopment Analysis (DEA) Windows Analysis to estimate efficiency levels and trends of individual banks. This paper then used a model of seemingly unrelated regression equations (SURE) to examine the interrelationships among default risk, capital and efficiency.

Findings

This study found a two-way negative association between efficiency and default risk, and between capital ratio and default risk. However, this study found a two-way positive relationship between capital ratio and only profit efficiency. Public banks behaved differently from private banks regarding the association between capital and efficiency. Moreover, public banks had greater probability of default risk, lower capital ratio but higher efficiency level than private banks. Further, default risk, capital ratio and efficiency of the Indian banking system increased over time, but the two formers were driven by public banks while the latter was driven by private banks.

Practical implications

The findings of this study appear to favour capital ratio as an efficient tool to improve efficiency and reduce default risk of the Indian banking system.

Originality/value

This paper is the first investigating the interrelationships between bank risk, capital and efficiency of the Indian banking system, where bank risk is measured by Z-score value and efficiency is captured by cost, revenue and profit efficiencies, and then considering the impact of agency issues on these interrelationships.

Details

Managerial Finance, vol. 41 no. 5
Type: Research Article
ISSN: 0307-4358

Keywords

Article
Publication date: 28 June 2022

Peter Wanke, Sahar Ostovan, Mohammad Reza Mozaffari, Javad Gerami and Yong Tan

This paper aims to present two-stage network models in the presence of stochastic ratio data.

Abstract

Purpose

This paper aims to present two-stage network models in the presence of stochastic ratio data.

Design/methodology/approach

Black-box, free-link and fix-link techniques are used to apply the internal relations of the two-stage network. A deterministic linear programming model is derived from a stochastic two-stage network data envelopment analysis (DEA) model by assuming that some basic stochastic elements are related to the inputs, outputs and intermediate products. The linkages between the overall process and the two subprocesses are proposed. The authors obtain the relation between the efficiency scores obtained from the stochastic two stage network DEA-ratio considering three different strategies involving black box, free-link and fix-link. The authors applied their proposed approach to 11 airlines in Iran.

Findings

In most of the scenarios, when alpha in particular takes any value between 0.1 and 0.4, three models from Charnes, Cooper, and Rhodes (1978), free-link and fix-link generate similar efficiency scores for the decision-making units (DMUs), While a relatively higher degree of variations in efficiency scores among the DMUs is generated when the alpha takes the value of 0.5. Comparing the results when the alpha takes the value of 0.1–0.4, the DMUs have the same ranking in terms of their efficiency scores.

Originality/value

The authors innovatively propose a deterministic linear programming model, and to the best of the authors’ knowledge, for the first time, the internal relationships of a two-stage network are analyzed by different techniques. The comparison of the results would be able to provide insights from both the policy perspective as well as the methodological perspective.

Details

Journal of Modelling in Management, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1746-5664

Keywords

Article
Publication date: 3 August 2021

Faheem Ejaz, William Pao and Hafiz Muhammad Ali

Offshore industries encounter severe production downtime due to high liquid carryovers in the T-junction. The diameter ratio and flow regime can significantly affect the…

111

Abstract

Purpose

Offshore industries encounter severe production downtime due to high liquid carryovers in the T-junction. The diameter ratio and flow regime can significantly affect the excess liquid carryovers. Unfortunately, regular and reduce T-junctions have low separation efficiencies. Ansys as a commercial computational fluid dynamics (CFD) software was used to model and numerically inspect a novel diverging T-junction design. The purpose of diverging T-junction is to merge the specific characteristics of regular and reduced T-junctions, ultimately increasing separation efficiency. The purpose of this study is to numerically compute the separation efficiency for five distinct diverging T-junctions for eight different velocity ratios. The results were compared to regular and converging T-junctions.

Design/methodology/approach

Air-water slug flow was simulated with the help of the volume of the fluid model, coupled with the K-epsilon turbulence model to track liquid-gas interfaces.

Findings

The results of this study indicated that T-junctions with upstream and downstream diameter ratio combinations of 0.8–1 and 0.5–1 achieved separation efficiency of 96% and 94.5%, respectively. These two diverging T-junctions had significantly higher separation efficiencies when compared to regular and converging T-junctions. Results also revealed that over-reduction of upstream and downstream diameter ratios below 0.5 and 1, respectively, lead to declination in separation efficiency.

Research limitations/implications

The present study is constrained for air and water as working fluids. Nevertheless, the results apply to other applications as well.

Practical implications

The proposed T-junction is intended to reduce excessive liquid carryovers and frequent plant shutdowns. Thus, lowering operational costs and enhancing separation efficiency.

Social implications

Higher separation efficiency achieved by using diverging T-junction enabled reduced production downtimes and resulted in lower maintenance costs.

Originality/value

A novel T-junction design was proposed in this study with a separation efficiency of higher than 90%. High separation efficiency eliminates loss of time during shutdowns and lowers maintenance costs. Furthermore, limitations of this study were also addressed as the lower upstream and downstream diameter ratio does not always enhance separation efficiency.

Details

International Journal of Numerical Methods for Heat & Fluid Flow, vol. 32 no. 5
Type: Research Article
ISSN: 0961-5539

Keywords

Article
Publication date: 20 April 2020

Parisa Kamyab, Mohammad Reza Mozaffari, Javad Gerami and Peter F. Wankei

It is always of great importance for managers in organizations to evaluate their staff members and create incentive systems, using instruments such as Data Envelopment…

Abstract

Purpose

It is always of great importance for managers in organizations to evaluate their staff members and create incentive systems, using instruments such as Data Envelopment Analysis (DEA) and DEA-R (DEA models based on ratio analysis). The purpose of this paper is to propose a two-stage network incentives system for commercial banks.

Design/methodology/approach

Centralized Resource Allocation (CRA) models make it possible to project all decision-making units (DMUs) onto the efficient frontier by solving a single linear programming model. In this paper, we use our proposed DEA-R-based CRA models to evaluate commercial banks in a two-stage case when the only ratios available are the assets-to-costs and income-to-assets vectors.

Findings

Thirteen commercial banks modeled as two-stage networks were evaluated by the models proposed in two different cases of ratio data. Results suggest that the proposed methodology yields more accurate efficiency scores, thus allowing better discrimination among DMUs. Furthermore, evaluating the DMUs when they are structured as two-stage (or even three-stage) networks makes it possible to examine the incentives system in more detail. Therefore, the use of incentive systems by managers would allow a better focus on the priority activities of commercial banks and a faster movement toward the frontier of best practices.

Originality/value

The super-efficiency scores of a number of commercial banks are evaluated based on the CRA model, as a cornerstone criterion for the two-stage evaluation in DEA-R, thus allowing the rank of each commercial bank in terms of the incentives system rather on the performance of the productive process.

Details

International Journal of Productivity and Performance Management, vol. 70 no. 2
Type: Research Article
ISSN: 1741-0401

Keywords

Open Access
Book part
Publication date: 4 May 2018

Anwar Puteh, Muhammad Rasyidin and Nurul Mawaddah

Purpose – The purpose of the research is to analyze the efficiency of Islamic banks in Indonesia. The data used in this research are panel data observed from 2012 until…

Abstract

Purpose – The purpose of the research is to analyze the efficiency of Islamic banks in Indonesia. The data used in this research are panel data observed from 2012 until 2016. The sampling of this research is conducted on five Sharia banks in Indonesia, that is, Bank Muamalat, Bank SyariahMandiri, BukopinSyariah, BRI Syariah, and Bank Mega Syariah.

Design/Methodology/Approach – The study uses a quantitative method to analyze the efficiency of Sharia banking with formulation of comparison of operating expenses to operating revenues (BOPO).

Finding – The result of this research concludes that Sharia banking in Indonesia has not been efficient during the last five years, that is, 2012–2016. This can be seen from the range of banking efficiency ratio. The average level of Islamic banking efficiency ranges between 89.73% and 94.16%. Bank Muamalat whose range is 94.16% shows the highest average efficiency ratio compared to other Sharia banks. Meanwhile, Bank Mega Syariah maintains the lowest average efficiency ratio that is 89.37%. The five Sharia banks have a high efficiency ratio of over 80%. This shows that Sharia banking in Indonesia is inefficient

Originality/Value – The bank should be able to balance between cost (cost) and revenue. Sharia banks must also be able to create good product innovation in order to increase the collection of funds from the community, such as for competitive outcomes, prizes, or other programs that raise public interest to use the services of Sharia banking.

Research Limitations/Implications – This inefficiency is due to the high bank operating costs compared to the bank’s operating income.

Details

Proceedings of MICoMS 2017
Type: Book
ISBN:

Keywords

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