Operating Income (operating + income)

Distribution by Scientific Domains


Selected Abstracts


Voluntary disclosure of operating income

ACCOUNTING & FINANCE, Issue 1 2010
Jilnaught Wong
M41 Abstract This study investigates whether New Zealand firms' voluntary disclosure of operating income, which is also known as earnings before interest and tax, in the income statement is related to the investment opportunity set. New Zealand provides an ideal setting to examine this because New Zealand generally accepted accounting principles do not require the disclosure of operating income as an intermediate income number in arriving at net income (earnings) in the income statement. We hypothesize and find evidence that firms with high assets-in-place and high leverage are more likely to voluntarily disclose operating income/earnings before interest and tax. However, the assets-in-place finding is sensitive to alternative measures of the investment opportunity set. [source]


Determinants of Cross-Sectional Variation in Discount Rates, Growth Rates and Exit Cap Rates

REAL ESTATE ECONOMICS, Issue 2 2004
Åke Gunnelin
This study investigates the determinants of key input variables in valuers' discounted cash flow models used for estimating market values for offices. Data from 599 valuations in 2000 from Stockholm, Gothenburg and Malmö are used to explain variation in discount rates, expected growth rates in net operating income and exit cap rates. Our ability to explain the relatively wide variation in appraisal assumptions with plausible covariates generates confidence in the appraisal process. This has important implications because most value and returns indices of commercial real estate worldwide are appraisal based. [source]


Financial Impact of Emergency Department Ultrasound

ACADEMIC EMERGENCY MEDICINE, Issue 7 2009
Olanrewaju A. Soremekun MD
Abstract Objectives:, There is limited information on the financial implications of an emergency department ultrasound (ED US) program. The authors sought to perform a fiscal analysis of an integrated ED US program. Methods:, A retrospective review of billing data was performed for fiscal year (FY) 2007 for an urban academic ED with an ED US program. The ED had an annual census of 80,000 visits and 1,101 ED trauma activations. The ED is a core teaching site for a 4-year emergency medicine (EM) residency, has 35 faculty members, and has 24-hour availability of all radiology services including formal US. ED US is utilized as part of evaluation of all trauma activations and for ED procedures. As actual billing charges and reimbursement rates are institution-specific and proprietary information, relative value units (RVUs) and reimbursement based on the Centers for Medicare & Medicaid Services (CMS) 2007 fee schedule (adjusted for fixed diagnosis-related group [DRG] payments and bad debt) was used to determine revenue generated from ED US. To estimate potential volume, assumptions were made on improvement in documentation rate for diagnostic scans (current documentation rates based on billed volume versus diagnostic studies in diagnostic image database), with no improvements assumed for procedural ED US. Expenses consist of three components,capital costs, training costs, and ongoing operational costs,and were determined by institutional experience. Training costs were considered sunken expenses by this institution and were thus not included in the original return on investment (ROI) calculation, although for this article a second ROI calculation was done with training cost estimates included. For the purposes of analysis, certain key assumptions were made. We utilized a collection rate of 45% and hospitalization rates (used to adjust for fixed DRG payments) of 33% for all diagnostic scans, 100% for vascular access, and 10% for needle placement. An optimal documentation rate of 95% was used to estimate potential revenue. Results:, In FY 2007, 486 limited echo exams of abdomen (current procedural terminology [CPT] 76705) and 480 limited echo cardiac exams were performed (CPT 93308) while there were 78 exams for US-guided vascular access (CPT 76937) and 36 US-guided needle placements when performing paracentesis, thoracentesis, or location of abscess for drainage (CPT 76492). Applying the 2007 CMS fee schedule and above assumptions, the revenue generated was 578 RVUs and $35,541 ($12,934 in professional physician fees and $22,607 in facility fees). Assuming optimal documentation rates for diagnostic ED US scans, ED US could have generated 1,487 RVUs and $94,593 ($33,953 in professional physician fees and $60,640 in facility fees). Program expenses include an initial capital expense (estimated at $120,000 for two US machines) and ongoing operational costs ($68,640 per year to cover image quality assurance review, continuing education, and program maintenance). Based on current revenue, there would be an annual operating loss, and thus an ROI cannot be calculated. However, if potential revenue is achieved, the annual operating income will be $22,846 per year with an ROI of 4.9 years to break even with initial investment. Conclusions:, Determining an ROI is a required procedure for any business plan for establishing an ED US program. Our analysis demonstrates that an ED US program that captures charges for trauma and procedural US and achieves the potential billing volume breaks even in less than 5 years, at which point it would generate a positive margin. [source]


Testing options for the commercialization of abalone selective breeding using bioeconomic simulation modelling

AQUACULTURE RESEARCH, Issue 9 2010
Nick Robinson
Abstract The genetic response and economic benefit from alternative breeding programme designs for blacklip and greenlip abalone (Haliotis rubra and Haliotis laevigata, respectively) were evaluated using a computer simulation model. Two selection criteria were investigated, one used family breeding values for liability to disease challenge test infection and the other used a direct selection of the best performing individuals across families for growth rate. Five scales of breeding programme were tested and the model predicted that if growth rate is the only selection criterion, breeding programmes of a scale using 150 families of each species each generation would result in 12,13% genetic improvement in initial generations and have the greatest beneficial economic impact on the Australian abalone industry of the options tested. The model predicts an average discounted benefit,cost ratio of 48:1, total added discounted benefit of AU$4.90 for each kilogram of abalone produced and nominal economic effect on operating income of over AU$16 million per year after 10 years. If disease resistance is the only selective breeding criterion, 100 families of each species would result in the highest benefit,cost ratio of the options tested, although some genetic gain would need to be sacrificed to reduce inbreeding to acceptable levels in this scenario. A strategy for a stand-alone abalone selective breeding cooperative was also modelled. For a farm of current tank area yielding 100 t year,1, participation is expected to yield over AU$0.7 million in discounted total added production value and annual discounted returns of over AU$0.4 million per annum by year 10. [source]


Voluntary disclosure of operating income

ACCOUNTING & FINANCE, Issue 1 2010
Jilnaught Wong
M41 Abstract This study investigates whether New Zealand firms' voluntary disclosure of operating income, which is also known as earnings before interest and tax, in the income statement is related to the investment opportunity set. New Zealand provides an ideal setting to examine this because New Zealand generally accepted accounting principles do not require the disclosure of operating income as an intermediate income number in arriving at net income (earnings) in the income statement. We hypothesize and find evidence that firms with high assets-in-place and high leverage are more likely to voluntarily disclose operating income/earnings before interest and tax. However, the assets-in-place finding is sensitive to alternative measures of the investment opportunity set. [source]


Contemporaneous Loan Stress and Termination Risk in the CMBS Pool: How "Ruthless" is Default?

REAL ESTATE ECONOMICS, Issue 2 2010
Tracey Seslen
This study analyzes the impact of contemporaneous loan stress on the termination of loans in the commercial mortgage-backed securities pool from 1992 to 2004 using a novel measure, based on changes in net operating incomes and property values at the metropolitan statistical area-property-type-year level. Employing a semi-parametric competing risks model for a variety of specifications, we find that the probability of default is extremely low even at very high levels of stress, although the coefficient estimates of greatest interest are very statistically significant. These results suggest substantial lender forbearance and are consistent with previous research that models default as a "gradual dynamic process" rather than a "ruthless" exercise once "in the money." [source]