We examine the effects of financial analysts on the real economy in the case of innovation. Our baseline results show that firms covered by a larger number of analysts generate fewer patents and ...patents with lower impact. To establish causality, we use a difference-in-differences approach that relies on the variation generated by multiple exogenous shocks to analyst coverage, as well as an instrumental variable approach. Our identification strategies suggest a negative causal effect of analyst coverage on firm innovation. The evidence is consistent with the hypothesis that analysts exert too much pressure on managers to meet short-term goals, impeding firms' investment in long-term innovative projects. We further discuss possible underlying mechanisms through which analysts impede innovation and show that there is a residual effect of analysts on innovation even after controlling for these mechanisms. Our paper offers novel evidence on a previously under-explored adverse consequence of analyst coverage—its hindrance to firm innovation.
In today's rapidly evolving industrial landscape, businesses are increasingly challenged to strike a balance between enhancing productivity and maintaining product quality. Company X, a renowned ...cement manufacturer in Indonesia, relies heavily on four key raw materials, among which clay is particularly crucial for the raw mix. Recent trends have shown a decrease in the Al2O3 composition of clay, necessitating adjustments in clay capacity to uphold quality standards. A thorough technical evaluation of the plant highlighted that a significant number of critical machines, totaling 17, were operating with mechanical availability below the desired threshold. Additionally, a utility analysis pinpointed a shortfall in meeting the required clay tonnage, leading to the identification of machines that would benefit from retrofitting. The financial implications of this initiative were substantial, with the initial investment for the upgrades and subsequent operational costs in the first year being considerable. Yet, this expenditure was offset by a notable profit in the first year post-retrofitting. Key financial metrics further underscored the project's viability: a highly favorable Net Present Value (NPV), an impressive Internal Rate of Return (IRR), a rapid Payback Period (PP), and a significant Profitability Index (PI). These parameters, derived from an exhaustive analysis, clearly support the strategic decision to invest in retrofitting the production machinery at Company X's cement plant, illustrating the project's feasibility and the prospective benefits of this investment.
The Llttlo Rock Advertising A Promotion Commission's $3.35 million purchase of the Cromwell Building at 101 Spring St. for the Little Rock Convention A Visitors Bureau could be finalized within a ...month or so, according to Gretchen Hall, the bureau's president and CEO.
Abstract The complete rearing cycle of dairy calves is not yet widely adopted by rural producers, possibly because they do not perceive these animals as potential meat producers or are unaware of ...their production capabilities. This study aimed to assess the economic viability of rearing dairy calves through their entire growth cycle. Sixteen Holstein × Gyr crossbred animals were assessed, originating from dairy farming, with an average initial weight of 40.67 ± 5.27 kg and slaughtered at 10 months of age, reaching a final weight of 320.4 ± 45.87 kg. These calves were reared in a feedlot system and received a mash diet without the inclusion of roughage. The experiment was conducted on a farm primarily focused on dairy farming, situated in the municipality of Turvânia, GO, Brazil. Economic evaluations were conducted at the conclusion of the production cycle, with the calculation of the value of the arroba (@ = 15 kg) produced. Data were analyzed using a production cost structure methodology, which included effective operating cost, total operating cost, and total cost. The following economic indicators were examined: gross revenue, gross margin, net margin, and the break-even point. Results were highly promising, demonstrating a profit from raising dairy male calves, with a net margin per animal of BRL 321.50. Additionally, these animals displayed noteworthy potential for weight gain and carcass quality. A total of 149.19 @ were produced, averaging 9.32 @ per animal, with a production cost of BRL 105.52, encompassing expenses such as milk consumption, concentrate diet, and labor, which amounted to BRL 1.18 per month per animal. These findings underscore the economic feasibility of this rearing system.
Resumo O ciclo completo de bezerros leiteiros ainda não é muito utilizado pelos produtores rurais, por não considerarem esses animais como produtores de carne, ou pelo motivo de não conhecerem o potencial de produção. Objetivou-se avaliar os índices econômicos do ciclo completo em bezerros leiteiros. Foram avaliados 16 animais mestiços Holandês x Gir, oriundos da atividade leiteira com peso médio inicial de 40,67 ± 5,27 kg, abatidos aos 10 meses de vida com peso final de 320,4 ± 45,87 kg, mantidos em sistema de confinamento recebendo dieta farelada sem o uso de volumoso. O experimento foi conduzido em uma propriedade com principal fonte renda à atividade leiteira, no munícipio de Turvânia-GO. As avaliações econômicas foram feitas no final do ciclo de produção, com o cálculo do valor da arroba (@) produzida, para a interpretação dos dados utilizou-se a metodologia da estrutura de custos de produção: custo operacional efetivo, custo operacional total e custo total. Foram analisados os seguintes indicadores econômicos: receita bruta, margem bruta, margem líquida e ponto de equilíbrio. Os resultados obtidos foram satisfatórios, ao apresentarem lucro com utilização dos machos leiteiros, com Margem Líquida por animal de R$ 321.50, além do potencial de ganho de peso e qualidade de carcaça desses animais. Foram produzidas 149,19 @ com média de 9,32 @ animal-¹, com o custo de produção de R$ 105,52 incluindo o leite consumido, dieta concentrada e a mão-de-obra no valor de R$ 1,18 ao mês por animal, demonstrando viabilidade econômica do sistema.
Expected Shortfall (ES) is the average return on a risky asset conditional on the return being below some quantile of its distribution, namely its Value-at-Risk (VaR). The Basel III Accord, which ...will be implemented in the years leading up to 2019, places new attention on ES, but unlike VaR, there is little existing work on modeling ES. We use recent results from statistical decision theory to overcome the problem of “elicitability” for ES by jointly modeling ES and VaR, and propose new dynamic models for these risk measures. We provide estimation and inference methods for the proposed models, and confirm via simulation studies that the methods have good finite-sample properties. We apply these models to daily returns on four international equity indices, and find the proposed new ES–VaR models outperform forecasts based on GARCH or rolling window models.
Analytical technologies that structure and process data hold great promise for organizations but also may pose fundamental challenges for how knowledge workers accomplish tasks. Knowledge workers are ...generally considered experts who develop deep understanding of their tools, but recent observations suggest that in some situations, they may black box their analytical technologies, meaning they trust their tools without understanding how they work. I conducted a two-year inductive ethnographic study of the use of analytical technologies across four groups in an investment bank and found two distinct paths that these groups used to validate financial analyses through what I call “validating practices”: actions that confirm whether a produced analysis is trustworthy. Surprisingly, engaging in these practices does not necessarily equate to understanding the calculations performed by the technologies. In one path, validating practices are partitioned across junior and senior roles: junior bankers engage in assembling tasks and use the analytical tools to perform analysis, while only senior bankers interpret the analysis. In the other path, junior and senior members engage in co-construction: junior bankers do both assembling and interpreting tasks, and senior bankers engage in interpreting and provide feedback on junior bankers’ reasoning and choices. Both junior and senior bankers in the partitioning groups routinely black boxed the algorithms embedded in their technologies, taking them for granted without understanding them. By contrast, bankers in the co-construction groups were conscious of the algorithms and understood their potential impact. I found that black boxing influenced the knowledge outputs of these bankers and constrained the development of junior members’ expertise, with consequences for their career trajectories.
The financial analysis represents a complex and complete management instrument, by means of which the financial information related to a company is processed and interpreted for the purpose of ...capitalizing in order to adopt the most appropriate managerial decisions. The financial analysis is based on a series of indicators of ratio or difference type organized in an assembly, often correlating with each other. The informational basis of the financial analysis is provided by the company’s balance sheet, which points out its financial position, on the one hand, and by the profit and loss account, which captures its financial performance, on the other hand.
Lahjie AM, Lepong A, Simarangkir BDAS, Kristiningrum R, Ruslim Y. 2018. Financial analysis of dipterocarp log production and rubber production in the forest and land rehabilitation program of Sekolaq ...Muliaq, West Kutai District, Indonesia. Biodiversitas 19: 757-766. The Dayak community of East Kalimantan in the last decade has begun to develop production systems that integrate forest timber tree species into plantation commodity enterprises. They have become aware that the natural forest species of their surroundings such as Meranti (Shorea sp.) and Kapur (Dryobalanops aromatica) are often easier to exploit economically, and represent potentially cheaper investments, than are introduced plantation crops such as rubber (Hevea brasiliensis). This is because the price of rubber latex has decreased over the years and has ceased to give a financial return commensurate with the investment required to develop rubber as a monocrop. The research described in this paper aimed to evaluate the viability of a dipterocarp forest/rubber plantation system cultivated by people in the West Kutai District of East Kalimantan. The viability of the system was evaluated by (i) measuring its production of dipterocarp logs and natural rubber; (ii) determining the diameter distribution of its dipterocarp trees and (iii) assessing the financial feasibility of the dipterocarp/rubber system using the theories of increment production and basal area applied to the determination of Pay Back Period, Net Present Value (NPV), Net Benefit Cost (B/C) ratio and Internal Rate of Return (IRR). The research areas on which the evaluation was performed consisted of (1) a mixed population of Shorea spp. (Meranti) and rubber (Hevea brasiliensis) and (2) a mixed population of Dryobalanops aromatica (Kapur) and rubber. The growth analysis of Shorea spp. combined with rubber as well as D. aromatica combined with rubber at the planting distance of 5m x 5m showed that the maximum cycle was reached at the age of 40 years. Whereas the rubber trees in monoculture cultivation reached their maximum cycle at the age of 17 years. The optimum increment of MAI and CAI of Shorea spp. combined with rubber reached 3.61 m3 ha-1 year-1 and 3.62 m3 ha-1 year-1 respectively. The maximum increment of MAI and CAI of Dryobalanops aromatica combined with rubber reached 3.09 m3 ha-1 year-1 and 3 m3 ha-1 year-1 respectively.
We develop a bid-ask spread estimator from daily high and low prices. Daily high (low) prices are almost always buy (sell) trades. Hence, the high-low ratio reflects both the stock's variance and its ...bid-ask spread. Although the variance component of the high-low ratio is proportional to the return interval, the spread component is not. This allows us to derive a spread estimator as a function of high-low ratios over 1-day and 2-day intervals. The estimator is easy to calculate, can be applied in a variety of research areas, and generally outperforms other low-frequency estimators.
•Uncertainty in market prices drives financial outcomes.•Monte Carlo simulation allows uncertainty to be quantified.•Biochar-only production offers a potentially profitable venture.•Biofuel-biochar ...coproduction requires RINs to achieve financial success.
A comparative techno-economic analysis of two different thermochemical biomass conversion pathways was conducted to examine the effects of fuel price and other variables on project financial performance. Monte Carlo simulation was used to quantify the effects of uncertainty and volatility of ten critical variables: biofuel, biochar and feedstock prices, discount rate, capital investment, labor cost, loan terms, feedstock drying, and biofuel and biochar conversion rates. Market prices for biofuel and biochar have the largest impact on net present value (NPV) of any variable considered, due in part to the high levels of uncertainty associated with future prices of both. Across the ranges of input values for these variables in simulation analysis, hearth-based pyrolysis biochar production had the highest likelihood of profitability with a mean NPV of $41.5 million and only 20% of outcomes resulting in a net loss, while 68% of outcomes for auger-based biochar-biofuel coproduction represented a financial loss, including a mean NPV of -$24.2 million. However, when additional revenue from Renewable Identification Numbers (RINs) credits generated by biofuel production is considered, financial outcomes of biochar-biofuel coproduction improve to 50% likelihood of experiencing a net loss. Findings of the very strong impact of market prices on financial outcomes, relative to other important technical and economic variables, can inform effective targeting of future renewable energy policy, as well as the design of future techno-economic analyses, which do not currently focus on the effect of market prices on profitability.
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