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Financial Analysis (financial + analysis)

Distribution by Scientific Domains

Business, Economics, Finance and Accounting	100%

Selected Abstracts

St. Thomas University: Which Balanced Scorecard to Use?,/ST.

ACCOUNTING PERSPECTIVES, Issue 4 2007
THOMAS UNIVERSITY: LE CHOIX D'UN TABLEAU DE BORD
ABSTRACT This case provides background on a university that undertook a formal strategic-planning initiative. Mary White, Vice-President (Administration), was responsible for developing the performance evaluation framework. She established a special task force, which included Peter Crimson, Assistant Vice-President (Administration), Eva Black, Director of Financial Analysis, and Adam Green, Director of Planning and Analysis, to assist her in this endeavor. The special task force had an insightful discussion on the balanced scorecard during its first meeting. When the meeting concluded, Mary White asked Adam Green to conduct research on the different approaches to the balanced scorecard adopted in a number of universities. She expected Adam Green to provide an analysis of the different balanced scorecard approaches in universities, to make recommendations on the balanced scorecard approach that St. Thomas should adopt, and to develop a balanced scorecard for the university. An objective of the case is to provide students with an opportunity to evaluate the implementation of the balanced scorecard in universities, to recommend an approach for developing the performance evaluation framework, and to design a balanced scorecard for the university. RÉSUMÉ Le cas élaboré par l'auteure contient les données de base relatives au projet structuré de planification stratégique entrepris par une université. Mary White, vice-présidente à l'administration, assumait la responsabilité de l'élaboration du cadre d'évaluation de la performance. Elle a constitué un groupe de travail spécial, réunissant Peter Crimson, adjoint à la vice-présidente à l'administration, Eva Black, directrice de l'analyse financière, et Adam Green, directeur de la planification et de l'analyse, pour lui prêter main-forte dans cette entreprise. Lors de sa première réunion, le groupe de travail spécial a tenu une discussion instructive sur le tableau de bord. Au terme de cette réunion, Mary White a demandé à Adam Green de faire des recherches sur la façon dont différentes universités ont choisi de traiter le tableau de bord. Elle souhaitait obtenir une analyse des différentes méthodes utilisées dans les universités, des recommandations quant au choix de la méthode appropriée à St. Thomas et l'élaboration du tableau de bord de l'université. Ce cas a notamment pour objectif d'offrir aux étudiants l'occasion d'évaluer la mise en application du tableau de bord dans les universités, de recommander une méthode d'élaboration du cadre d'évaluation de la performance et de concevoir un tableau de bord pour l'université. [source]

The Use of Dynamic Financial Analysis to Determine Whether an Optimal Growth Rate Exists for a Property-Liability Insurer

JOURNAL OF RISK AND INSURANCE, Issue 4 2004
Stephen P. D'Arcy
Prior research on the aging phenomenon has demonstrated that new business for property-liability (P-L) insurers generates high loss ratios that gradually decline as a book of business goes through successive renewal cycles. Although the experience on new business is initially unprofitable, the renewal book of business eventually becomes profitable over time. Within this context, insurers need to manage their exposure growth in order to maximize long run profitability. Dynamic financial analysis (DFA), a relatively new tool for P-L insurers, utilizes Monte Carlo simulation to generate the overall financial results for an insurer under a large number of scenarios. This article uses a publicly available DFA model,along with the estimated market value of an insurer, based on 1990,2001 data for stock P-L insurers and underlying financial variables,to determine optimal growth rates of a P-L insurer based on mean,variance analysis, stochastic dominance, and constraints on leverage. [source]

Integrated Environmental and Financial Performance Metrics for Investment Analysis and Portfolio Management

CORPORATE GOVERNANCE, Issue 3 2007
Simon Thomas
This paper introduces a new measure, based on a study by Trucost and Dr Robert Repetto, combining external environmental costs with established measures of economic value added, and demonstrates how this measure can be incorporated into financial analysis. We propose that external environmental costs are relevant to all investors: universal investors are concerned about the scale of external costs whether or not regulations to internalise them are likely; mainstream investors need to understand external costs as an indication of future regulatory compliance costs; and SRI investors need to evaluate companies on both financial and social performance. The paper illustrates our new measure with data from US electric utilities and illustrates how the environmental exposures of different fund managers and portfolios can be compared. With such measures fund managers can understand and control portfolio-wide environmental risks, demonstrate their environmental credentials quantitatively and objectively and compete for the increasing number of investment mandates that have an environmental component. [source]

Learning the language of business at Sabre

GLOBAL BUSINESS AND ORGANIZATIONAL EXCELLENCE, Issue 3 2003
Deedra Yarbrough
Sabre Holdings had to grow up fast. It was spun off from American Airlines in 2000,and then September 11, 2001 slammed the entire airline industry. Yet Sabre came close to achieving its 2002 profitability plan,in large part because employees controlled expenses. And they had learned both why and how to do that through an innovative, experiential learning initiative that linked corporate financial analysis with daily work activity. © 2003 Wiley Periodicals, Inc. [source]

Do Stock Prices Fully Reflect the Implications of Special Items for Future Earnings?

JOURNAL OF ACCOUNTING RESEARCH, Issue 3 2002
David Burgstahler
Previous research (Rendleman, Jones, and Latane [1987]; Freeman and Tse [1989]; Bernard and Thomas [1990]; and Ball and Bartov [1996]) indicates that security prices do not fully reflect predictable elements of the relation between current and future quarterly earnings. We investigate whether this finding also holds for the special items component of earnings. Given that special items are prominent in financial analysis and are assumed to have relatively straightforward implications for future earnings (special items are assumed to be largely transitory), one might expect that prices would fully impound the implications of special items for future earnings. Based on the "two-equation" approach used in Ball and Bartov [1996] and other studies (e.g., Abarbanell and Bernard [1992]; Sloan [1996]; Rangan and Sloan [1998]; and Soffer and Lys [1999]), we find that while prices reflect relatively more of the effects of special items compared to other earnings components, we still reject the null hypothesis that prices fully impound the implications of special items for future earnings. The "two-equation" approach assesses the consistency of coefficients in a pair of prediction and pricing equations, and thus depends on an assumed functional form. However, a less structured abnormal returns methodology like that used in Bernard and Thomas [1990] also supports the conclusion that the implications of special items are not fully impounded in prices. Specifically, a trading strategy based only on the sign of special items earns small but statistically significant abnormal returns during a 3-day window four quarters subsequent to the original announcement of special items. [source]