Finance

To evaluate the financial conditions and performance of a company, the financial analysis needs certain yardsticks. Among the variables, tools are employed in analyzing the financial information contained in the financial statements. Ratio analysis is a widely used tool, which is relevant in assessing the performance of a firm in respect of liquidity position, long-term, solvency. In additional to this, it helps to predict the financial distress of the business. An attempt has been made in the present study to have an insight into the examination of financial health of the organization using Z-Score analysis.

Current study is carried out to look at the deterinmants of profitablity in insurance sector of Pakistan with a panel data set of 31 insurance firms (life insurance sector and no-life insurance) of Pakitan from 2006-2011. To investigete the deterinmants of profitabiltiy two most applicable panel data teachniques (fixed effects and random effects models) are employed and then Hausman’s specification test is applied to select the most effective model. This test proves that fixed effects model is the most appropriated model for this study. The outcomes of fixed effects model propose that leverage, size, earnings voalitiy and age of the firm are signficant determinants of profitablitiy while growth opportunities and liquidty are not significant determinants of peorfitabiltiy. Accordign to best knowledge of authors this is frist study that covers the whole fiancial sector and emoply the appropriate models on the panel data. This study is very handy for the mangement of insurance sector of Pakistan in regarding their profitabilty decsions and stakeholders of insurance sector.

This paper deliberated to impact of domestic trade and Nepal-India trade by demonetization of Indian currency by Indian government. The Indian government is claiming that the action is a surgical strike against black money. The demonetization of the large bills has received mixed reactions. A large section of industry and the public reacted to the decision with overwhelming support, stating that the government should have taken such action a long time ago. Their point is that deflation is the most prominent and quick bang that is going to be seen in the Indian economy. On the other hand, this move is not only going to affect the Indian economy but also the Nepali economy, which is very closely linked to India.

Frequent and abrupt movements affect stock market movements adversely and results it in a highly volatile stock market. Hub of this study is to determine the relationship that exists between stock market volatility and macroeconomic variable concerning price level. Inflation rate, gold, oil and producer prices have been selected as macroeconomic variables concerning price level whereas volatility in KSE-100 Index served as dependent variable of the study. It is based on 144 monthly observations of the selected variables for a period of eleven years from 2002-2013. Multiple regression analysis is applied based on Ordinary Least Square. Findings revealed that statistically there exists a significant relationship between index volatility and selected macroeconomic variables. Movements in oil prices affect capital market movements positively whereas negative impact of inflation rate, gold and producer prices is revealed on index volatility. It is concluded that movements in these variables can help in predicting capital market volatility.

The study investigates the direction of volatility spillover between exchange rate and stock prices in Nigeria using quarterly data for the period of 1990-Q1 to 2009-Q4. Exponential Generalized Autoregressive Conditional Heteroskedastic (EGARCH) framework due to Nelson (1991) was employed. Two different stock exchange indicators were used as proxy for stock prices to test the direction of volatility spillover between the variables. Thus we have two EGARCH models. The ADF and PP tests suggest that the series are random walk processes in their level form. The empirical findings suggest evidence of no long run equilibrium relationship between exchange rate and stock prices. It further shows that there is a robust unidirectional volatility spillover running from exchange rate to stock prices irrespective of the stock market indicator used. The result supports the findings of Beer and Hebeins (2008) for industrialized countries. The estimated mean equation showed that there is instantaneous positive response of stock market volatility to exchange rate fluctuation. Evidence from variance equation revealed that volatility persists longer when SMC was used as proxy for stock prices than ASI. The standard deviation statistic showed that stock market indicator is positively related to risk, validating the capital asset market hypothesis.

While much research has been conducted in the United States on the use of loan loss provisions (LLPs) as a mechanism for managing earnings, managing capital, and as a tool for signaling future earnings strategies, there is a paucity of research in Europe. In this research, we replicate methodology used by Ahmed, Takeda and Thomas (1998) and examine the relative importance of key factors affecting the LLP decisions of Spanish depository institutions. Among others, we focus on the role of organizational structure. We speci?cally examine if and how LLPs are used prior to and after the implementation of capital adequacy regulations in the Spanish depository industry in 1992. Our results indicate that while LLPs were not used as a tool for managing capital after the new regulation came into effect, banks have now adopted a more aggressive earnings management strategy. This appears to be because the capital adequacy regulation of 1992 removed any capital constraint that hitherto acted as a disincentive to aggressive earnings management. Commercial banks appeared to adopt a more aggressive earnings management as well as capital management strategy than savings banks in the post regulatory era. Finally, we did not ?nd evidence that LLPs were used as a signaling tool by Spanish banks to portray their intentions about future earnings.

This study shows that China has strategically, for the time period studied between 2000 and 2010 increased its investments in Kenya. The increase in China’s economic and political involvement in Africa is arguably the most momentous development on the continent today. One of the contentious issues surrounding Sino-African relations involves investments. Although Africa and China have been trading with each other for centuries, the level and intensity of their trade relationship have increased dramatically since 2000. China has gained long strides in the global arena and more so by investing heavily in Africa. China has become a major source of a wide range of manufactured goods and foreign investment in many Africa countries. The trends and patterns of trade between China and Africa suggest many possible impacts in Africa. While many African welcome the capital and know-how, others fear that China is stepping in with heavy boots in various cycles. This has raised concerns with the developed nations and big world donors raising concerns whether China would bring hope or problems. This paper examined the impact of the China’s Investments, economic and developmental activities in Africa with focus to Kenya. However, there are both gains and losses in the relationship between the two countries. Data and information was gathered from the existing literature, books, journals, newspapers and internet search. It appeared that there is scarcity of the up to date data and information about China-Kenya and much of the information available captured a number of the past years and since this was the information the author could access, it was the same information used to examine the research paper study issue.

Currently, there are about 1,750 urban co-operative banks in India, which form 14% of the banking sector. While the focus has always been on private and public sector banks who are riding the technology wave to emerge as front runners in the global banking arena, cooperative banks, have been laggards when it comes to technology adoption. The drivers of performance for UCBs, as for any organisation, includes indicators such as increased employee satisfaction, increased customer satisfaction, financial stability, lower average time to resolution, and innovations in information and communications technology (ICT). Co-operative banks can play a significant role in rural financial inclusion if they ably take advantage of the technology in place. Besides enabling faster services, their decision to bring technology into play will open up possibilities of providing new cost-effective banking products and services to the farming community in particular. It is envisaged that post implementation of CBS including Financial Inclusion, Cooperative banks will also implement internet banking, phone banking, ATM network etc. According to industry watchers, technology deployments like CBS are a big challenge in cooperative banks. Factors such as high costs of implementation and maintenance coupled with lack of regional language software support for CBS are deterrents.

Working capital can be considered as source of existence for a financial body and management of working capital is regarded as one of the most essential part of business management. This study aims to find out the impact of working capital policies on profitability. Return on assets is used as a measure of profitability. Current assets to total assets ratio is used to compute the investment policy of working capital management and to determine financing policy of working capital management current liabilities to total assets ratio is used. Other variables that are used in this study are quick ratio, debt to equity ratio and size of the firms. Secondary data of 117 textile firms listed on Karachi stock exchange is taken for a period of six years i.e. 2005-2010 to calculate all these variables. Results of the regression analysis show that aggressiveness of working capital management policies is negatively associated with profitability. Moreover liquidity and size of the firm have positive relation profitability whereas debt to equity ratio is negatively correlated with profitability. Textile sector is one of the majors sectors of Pakistan. It needs due consideration regarding the management of assets and liabilities. So, the aim of this study is to provide some useful recommendations for the people responsible for the management of this sector. This study also establishes the basis for future research in this area of business.

Basel II initially published in June 2004, was intended to create an international standard for banking regulators to control how much capital bank need to put aside to guard against the types of financial and operational risks bank faces. Basel II attempted to accomplish this by setting up risk and capital management requirement designed to ensure that a bank has adequate capital for the risk the bank exposes itself to through its lending and investment practices. This paper helps in detailed study about the Basel II and also helps in to find out the relationship between capital adequacy, non performing assets and net profits of some selected private and public sector banks. This paper also explores the effect on Net profit due to change in Capital Adequacy ratio and non Performing Assets.