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Abstract - Modeling the Process of Financing Small Organizations
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Abstract: Most small business organizations are constantly lacking financial resources. This situation is associated with a small amount of own funds and the difficulty of raising borrowed funds. In the prevailing conditions, the need for well-founded financing management, this ensures the stable financial condition of a small organization, increases. Modeling the process of financing an organization allows you to consider different financing options, to influence the most significant factors in a particular situation. It is proposed to use the cognitive approach for dynamic management of the financing process and the choice of a rational variant based on the logit model. Determination of the degree of influence of various factors is proposed to be determined using correlation-regression modeling. With the help of the proposed modeling of the financing process of a small organization, it is possible to forecast positive changes in financial performance. Keywords: Management, small business, financing, is modeling. |
Abstract - Modelling the Dynamic Impact of Fertilizer Subsidy on Paddy Production: Empirical Evidence from Sri Lanka
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Abstract: Rice is the main staple food in Sri Lanka. There will be a potential increase in demand for rice due to the high population growth in the years to come. As the cultivable area is limited, the only way to increase required supply is to improve the yield level. However, there are a limited number of district level studies, which examined the factors that influence the paddy production in Sri Lanka. Hence, this study aims to identify the factors, which increase the paddy production in Sri Lanka with particular reference to fertilizer usage, guaranteed paddy price, temperature and rainfall. District-wise data were collected over the period from 1979 to 2019. An autoregressive distributed lag (ARDL) model was used to examine the short-run and long-run relationships between the paddy production and explanatory variables. According to the estimated model, the temperature has both significant positive and negative long-run relationships with paddy production in several districts. Furthermore, results reveal that paddy production in many districts had positive long-run relationships with the usage of the mixture of organic and chemical fertilizer. Hence, the findings of this study provide valuable policy insight for decision makers to redesign the chemical fertilizer subsidy in Sri Lanka. Our results also reveal that the use of organic fertilizer contributes to an increase in paddy production in both short-run and long-run. Hence, it is our opinion that sustainable agricultural practices combined with the removal of market distortions will lead to establishing an economically efficient paddy production system in Sri Lanka. Keywords: Cointegration, Fertilizer usage, Guaranteed paddy price, Long-run relationship. |
Abstract - Modern Theory of Capital Cost and Capital Structure by Brusov–Filatova–Orekhova (BFO Theory) for Companies, which Ceased to Exist at the Time Moment n
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Abstract: Modern theory of capital cost and capital structure by Brusov–Filatova–Orekhova (BFO theory), which describesthecompanies of arbitrary age n in opposite to the perpetuity Modigliani – Miller theory, is applied for companies, which ceased to exist at the time moment n. The required modification of BFO theory has been done in the paper. Formula BFO-2 for calculation of dependences of weighted average cost of capital, WACC, on the company's of lifetime n, on leverage level L and on tax on profit rate t for companies, which ceased to exist at the time moment n has been derived. We analyze these dependences and compare them with the results of classical BFO theory which describesthecompanies of arbitrary age n. Comparing of results, obtained for companies as remaining in the market (BFO), as well as retired from the market (BFO-2) shows that dependence of the weighted average cost of capital WACC of companies on leverage level L, the company's lifetime (or age) n and the tax on profit rate t are qualitatively similar in nature, while, there are significant quantitative differences in these dependences: WACC for companies ceased to exist, always turns out to be higher than that of the companies that remain on the market (with the same parameters: leverage level L, the company's lifetime (or age) n and the tax on profit rate t, capital costs (equity and debt)), by other words the cost of attracting capital for companies that continue to operate, is always lower. We examine whether the effects, discovered by us within classical BFO theory, are present in its modified form (BFO-2). We have found that within trade off theory there is no an optimal capital structure for BFO-2 case as well as for BFO (as it has been proven by us before), while the qualitatively new effect in corporative finance (decreasing of equity cost withleverage L), existing within classical BFO theory, is absent in BFO-2 case similar to the case of perpetuity companies.
Keywords: Classical BFO theory, BFOtheory modified for companies, which ceased to exist. Download Full Article |
Abstract - Modelling the Dynamic Impact of Replanting Subsidy on Tea Production in Sri Lanka: Policy Analysis Using the ARDL Model Approach
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Abstract: The tea industry in Sri Lanka plays a vital role in the economy with its direct and indirect contribution to the gross domestic products, employment, and foreign exchange earnings. The successive governments have introduced subsidy schemes for replanting to increase tea production. However, according to the authors' knowledge, there are no comprehensive quantitative studies undertaken to effectively investigate and quantify the effect of tea replanting subsidy scheme on tea production of the various geographic elevations of tea cultivating lands. The significant contribution of this paper is the quantification of the impact of tea replanting subsidy schemes on tea production in the short-run and long-run at different altitudes. This research takes time series data from 1970 to 2018 of three different heights or elevations-high, medium, and low. The Autoregressive Distributed Lag (ARDL) Model examines the short-run and long-run dynamics of the subsidy scheme on tea production. The results reveal that there is a cointegration between tea production and three variables; tea replanting subsidy, tea prices and tea bearing area; in all three elevations. But tea replanting subsidy is not significant in long run for all three elevations, separately. In the short-run analysis, the impact of replanting subsidy is significant only for tea production in low heights with one-year time lag. Since the study reveals that tea replanting subsidy increases, the tea production of low elevation also increases, and almost 60% of the tea extent and 73% of the total tea production gained from low heights, we recommend that the government continue the tea replanting subsidy schemes as it is benefitted by whole tea industry in long run. Keywords: ARDL Approach, Cost of Production, Tea Production, Tea Prices, Tea Replanting Subsidy, Sri Lanka. |
Abstract - Modernization of the Company's Fixed Assets: Critical Factors that Affect the Capital Budgeting Decisions
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Abstract: Modernization of the company's fixed assets is a necessary condition for its development and competitiveness. Assessing projects and efficient allocation of the capital depend on the project requirements. The identification of the critical factors makes it possible to compile a realistic investment budget of the company. It also contributes to the optimal solution of the problem of modernization of fixed assets. The capital investment decision of project ranking plays a crucial role in capital investment decisions. The business concerns prioritize the various projects on the base of the kind of project a firm has at a particular point of time. Project ranking is dependent on the fact as to how much would a particular project return as well as which project has the ability to provide the business, a maximum value. The development of recommendations to improve the company's policies of modernization of fixed assets under the investment budget project makes the right accents for the targeted usage of funds. Keywords: Budget decisions, capital investment projects, fixed assets, project valuation, capital budgeting techniques, facility management. |