This document summarizes a research article that explores the relationship between stock returns and fundamental variables (earnings yield, size, book-to-market ratio, cash flow yield) in the Japanese stock market from 1971-1988. The study finds that the book-to-market ratio and cash flow yield have the most significant positive impact on expected stock returns, while earnings yield and size do not impact returns as strongly. Specifically, stocks with higher book-to-market ratios and cash flow yields experienced higher returns. The results differ from previous findings on the US market and help address anomalous price behavior in the Japanese market.
AN ANALYSIS OF THE FINANCIAL PERFORMANCE EFFECT OF SHARIA COMPANIES ON STOCK ...Saputra Ayudi
This study entitled " An Analysis of the Financial Performance Effect of Sharia Companies on Stock Price Changes ( a Case Study of Companies Listed on the Sharia Stock Listing) ". This study uses eight (8) the financial ratios are debt to equity ratio, current ratio, inventory turnover ratio, total asset turnover, net profit margin, return on equity, price earning ratio, and dividend yield. The above financial ratios have been considered representative of the five types of financial ratios, which are 5 types of financial ratios in question are leverage ratios, liquidity ratios, efficiency ratios, profitability ratios, and market value ratios.
AN ANALYSIS OF THE FINANCIAL PERFORMANCE EFFECT OF SHARIA COMPANIES ON STOCK ...Saputra Ayudi
This study entitled " An Analysis of the Financial Performance Effect of Sharia Companies on Stock Price Changes ( a Case Study of Companies Listed on the Sharia Stock Listing) ". This study uses eight (8) the financial ratios are debt to equity ratio, current ratio, inventory turnover ratio, total asset turnover, net profit margin, return on equity, price earning ratio, and dividend yield. The above financial ratios have been considered representative of the five types of financial ratios, which are 5 types of financial ratios in question are leverage ratios, liquidity ratios, efficiency ratios, profitability ratios, and market value ratios.
Enterprise Excellence is Inclusive Excellence.pdfKaiNexus
Enterprise excellence and inclusive excellence are closely linked, and real-world challenges have shown that both are essential to the success of any organization. To achieve enterprise excellence, organizations must focus on improving their operations and processes while creating an inclusive environment that engages everyone. In this interactive session, the facilitator will highlight commonly established business practices and how they limit our ability to engage everyone every day. More importantly, though, participants will likely gain increased awareness of what we can do differently to maximize enterprise excellence through deliberate inclusion.
What is Enterprise Excellence?
Enterprise Excellence is a holistic approach that's aimed at achieving world-class performance across all aspects of the organization.
What might I learn?
A way to engage all in creating Inclusive Excellence. Lessons from the US military and their parallels to the story of Harry Potter. How belt systems and CI teams can destroy inclusive practices. How leadership language invites people to the party. There are three things leaders can do to engage everyone every day: maximizing psychological safety to create environments where folks learn, contribute, and challenge the status quo.
Who might benefit? Anyone and everyone leading folks from the shop floor to top floor.
Dr. William Harvey is a seasoned Operations Leader with extensive experience in chemical processing, manufacturing, and operations management. At Michelman, he currently oversees multiple sites, leading teams in strategic planning and coaching/practicing continuous improvement. William is set to start his eighth year of teaching at the University of Cincinnati where he teaches marketing, finance, and management. William holds various certifications in change management, quality, leadership, operational excellence, team building, and DiSC, among others.
The world of search engine optimization (SEO) is buzzing with discussions after Google confirmed that around 2,500 leaked internal documents related to its Search feature are indeed authentic. The revelation has sparked significant concerns within the SEO community. The leaked documents were initially reported by SEO experts Rand Fishkin and Mike King, igniting widespread analysis and discourse. For More Info:- https://news.arihantwebtech.com/search-disrupted-googles-leaked-documents-rock-the-seo-world/
Improving profitability for small businessBen Wann
In this comprehensive presentation, we will explore strategies and practical tips for enhancing profitability in small businesses. Tailored to meet the unique challenges faced by small enterprises, this session covers various aspects that directly impact the bottom line. Attendees will learn how to optimize operational efficiency, manage expenses, and increase revenue through innovative marketing and customer engagement techniques.
Premium MEAN Stack Development Solutions for Modern BusinessesSynapseIndia
Stay ahead of the curve with our premium MEAN Stack Development Solutions. Our expert developers utilize MongoDB, Express.js, AngularJS, and Node.js to create modern and responsive web applications. Trust us for cutting-edge solutions that drive your business growth and success.
Know more: https://www.synapseindia.com/technology/mean-stack-development-company.html
Discover the innovative and creative projects that highlight my journey throu...dylandmeas
Discover the innovative and creative projects that highlight my journey through Full Sail University. Below, you’ll find a collection of my work showcasing my skills and expertise in digital marketing, event planning, and media production.
Attending a job Interview for B1 and B2 Englsih learnersErika906060
It is a sample of an interview for a business english class for pre-intermediate and intermediate english students with emphasis on the speking ability.
[Note: This is a partial preview. To download this presentation, visit:
https://www.oeconsulting.com.sg/training-presentations]
Sustainability has become an increasingly critical topic as the world recognizes the need to protect our planet and its resources for future generations. Sustainability means meeting our current needs without compromising the ability of future generations to meet theirs. It involves long-term planning and consideration of the consequences of our actions. The goal is to create strategies that ensure the long-term viability of People, Planet, and Profit.
Leading companies such as Nike, Toyota, and Siemens are prioritizing sustainable innovation in their business models, setting an example for others to follow. In this Sustainability training presentation, you will learn key concepts, principles, and practices of sustainability applicable across industries. This training aims to create awareness and educate employees, senior executives, consultants, and other key stakeholders, including investors, policymakers, and supply chain partners, on the importance and implementation of sustainability.
LEARNING OBJECTIVES
1. Develop a comprehensive understanding of the fundamental principles and concepts that form the foundation of sustainability within corporate environments.
2. Explore the sustainability implementation model, focusing on effective measures and reporting strategies to track and communicate sustainability efforts.
3. Identify and define best practices and critical success factors essential for achieving sustainability goals within organizations.
CONTENTS
1. Introduction and Key Concepts of Sustainability
2. Principles and Practices of Sustainability
3. Measures and Reporting in Sustainability
4. Sustainability Implementation & Best Practices
To download the complete presentation, visit: https://www.oeconsulting.com.sg/training-presentations
Affordable Stationery Printing Services in Jaipur | Navpack n PrintNavpack & Print
Looking for professional printing services in Jaipur? Navpack n Print offers high-quality and affordable stationery printing for all your business needs. Stand out with custom stationery designs and fast turnaround times. Contact us today for a quote!
Unveiling the Secrets How Does Generative AI Work.pdfSam H
At its core, generative artificial intelligence relies on the concept of generative models, which serve as engines that churn out entirely new data resembling their training data. It is like a sculptor who has studied so many forms found in nature and then uses this knowledge to create sculptures from his imagination that have never been seen before anywhere else. If taken to cyberspace, gans work almost the same way.
Memorandum Of Association Constitution of Company.pptseri bangash
www.seribangash.com
A Memorandum of Association (MOA) is a legal document that outlines the fundamental principles and objectives upon which a company operates. It serves as the company's charter or constitution and defines the scope of its activities. Here's a detailed note on the MOA:
Contents of Memorandum of Association:
Name Clause: This clause states the name of the company, which should end with words like "Limited" or "Ltd." for a public limited company and "Private Limited" or "Pvt. Ltd." for a private limited company.
https://seribangash.com/article-of-association-is-legal-doc-of-company/
Registered Office Clause: It specifies the location where the company's registered office is situated. This office is where all official communications and notices are sent.
Objective Clause: This clause delineates the main objectives for which the company is formed. It's important to define these objectives clearly, as the company cannot undertake activities beyond those mentioned in this clause.
www.seribangash.com
Liability Clause: It outlines the extent of liability of the company's members. In the case of companies limited by shares, the liability of members is limited to the amount unpaid on their shares. For companies limited by guarantee, members' liability is limited to the amount they undertake to contribute if the company is wound up.
https://seribangash.com/promotors-is-person-conceived-formation-company/
Capital Clause: This clause specifies the authorized capital of the company, i.e., the maximum amount of share capital the company is authorized to issue. It also mentions the division of this capital into shares and their respective nominal value.
Association Clause: It simply states that the subscribers wish to form a company and agree to become members of it, in accordance with the terms of the MOA.
Importance of Memorandum of Association:
Legal Requirement: The MOA is a legal requirement for the formation of a company. It must be filed with the Registrar of Companies during the incorporation process.
Constitutional Document: It serves as the company's constitutional document, defining its scope, powers, and limitations.
Protection of Members: It protects the interests of the company's members by clearly defining the objectives and limiting their liability.
External Communication: It provides clarity to external parties, such as investors, creditors, and regulatory authorities, regarding the company's objectives and powers.
https://seribangash.com/difference-public-and-private-company-law/
Binding Authority: The company and its members are bound by the provisions of the MOA. Any action taken beyond its scope may be considered ultra vires (beyond the powers) of the company and therefore void.
Amendment of MOA:
While the MOA lays down the company's fundamental principles, it is not entirely immutable. It can be amended, but only under specific circumstances and in compliance with legal procedures. Amendments typically require shareholder
Remote sensing and monitoring are changing the mining industry for the better. These are providing innovative solutions to long-standing challenges. Those related to exploration, extraction, and overall environmental management by mining technology companies Odisha. These technologies make use of satellite imaging, aerial photography and sensors to collect data that might be inaccessible or from hazardous locations. With the use of this technology, mining operations are becoming increasingly efficient. Let us gain more insight into the key aspects associated with remote sensing and monitoring when it comes to mining.
Falcon stands out as a top-tier P2P Invoice Discounting platform in India, bridging esteemed blue-chip companies and eager investors. Our goal is to transform the investment landscape in India by establishing a comprehensive destination for borrowers and investors with diverse profiles and needs, all while minimizing risk. What sets Falcon apart is the elimination of intermediaries such as commercial banks and depository institutions, allowing investors to enjoy higher yields.
3.0 Project 2_ Developing My Brand Identity Kit.pptxtanyjahb
A personal brand exploration presentation summarizes an individual's unique qualities and goals, covering strengths, values, passions, and target audience. It helps individuals understand what makes them stand out, their desired image, and how they aim to achieve it.
Skye Residences | Extended Stay Residences Near Toronto Airportmarketingjdass
Experience unparalleled EXTENDED STAY and comfort at Skye Residences located just minutes from Toronto Airport. Discover sophisticated accommodations tailored for discerning travelers.
Website Link :
https://skyeresidences.com/
https://skyeresidences.com/about-us/
https://skyeresidences.com/gallery/
https://skyeresidences.com/rooms/
https://skyeresidences.com/near-by-attractions/
https://skyeresidences.com/commute/
https://skyeresidences.com/contact/
https://skyeresidences.com/queen-suite-with-sofa-bed/
https://skyeresidences.com/queen-suite-with-sofa-bed-and-balcony/
https://skyeresidences.com/queen-suite-with-sofa-bed-accessible/
https://skyeresidences.com/2-bedroom-deluxe-queen-suite-with-sofa-bed/
https://skyeresidences.com/2-bedroom-deluxe-king-queen-suite-with-sofa-bed/
https://skyeresidences.com/2-bedroom-deluxe-queen-suite-with-sofa-bed-accessible/
#Skye Residences Etobicoke, #Skye Residences Near Toronto Airport, #Skye Residences Toronto, #Skye Hotel Toronto, #Skye Hotel Near Toronto Airport, #Hotel Near Toronto Airport, #Near Toronto Airport Accommodation, #Suites Near Toronto Airport, #Etobicoke Suites Near Airport, #Hotel Near Toronto Pearson International Airport, #Toronto Airport Suite Rentals, #Pearson Airport Hotel Suites
RMD24 | Debunking the non-endemic revenue myth Marvin Vacquier Droop | First ...BBPMedia1
Marvin neemt je in deze presentatie mee in de voordelen van non-endemic advertising op retail media netwerken. Hij brengt ook de uitdagingen in beeld die de markt op dit moment heeft op het gebied van retail media voor niet-leveranciers.
Retail media wordt gezien als het nieuwe advertising-medium en ook mediabureaus richten massaal retail media-afdelingen op. Merken die niet in de betreffende winkel liggen staan ook nog niet in de rij om op de retail media netwerken te adverteren. Marvin belicht de uitdagingen die er zijn om echt aansluiting te vinden op die markt van non-endemic advertising.
RMD24 | Debunking the non-endemic revenue myth Marvin Vacquier Droop | First ...
pp 5.pptx
1. Course title: Seminar in Accounting and Finance
Course Code: FIN 611
Presentation on
Fundamentals and Stock Returns in Japan
Description of the Article
Article Written by: Louis K. C. Chan, Hamao, Josef Lakonishok
Article published in: The Journal of Finance, 46 (December, 1991), pp.1739-1764
Presented By: Chandra Kumar Rai
Dated: 27th April, 2021
2. Research Context
• The Japanese and the U.S. equity markets are the two largest in the world.
• As of March 1990, the two markets together accounted for 67% of the world's stock
market capitalization.
• However, in spite of the Japanese market's rapid growth and its increasing
significance in the international financial arena, only recently have researchers
turned their attention to the Tokyo market.
• This paper relates cross-sectional differences in returns on Japanese stocks to the
underlying behavior of four variables: earnings yield, size, book to market ratio, and
cash flow yield.
• Alternative statistical specifications and various estimation methods are applied to a
comprehensive, high-quality data set that extends from 1971 to 1988.
• The sample includes both manufacturing and nonmanufacturing firms, companies
from both sections of the Tokyo Stock Exchange, and also delisted securities.
3. • In the U.S. the cross-sectional relationship between stock returns and fundamental
variables has been extensively studied.
• In general, a positive relationship has been found between equity returns and
earnings yield, cash flow yield and book to market ratio, and a negative relationship
has been found between equity returns and size.
• The shortcomings of accounting earnings have motivated a number of recent papers
to explore the relationship between cash flow yields and stock returns (Bernard and
Stober, 1989; Wilson, 1986).
• Rosenberg, Reid, and Lanstein (1984) study the relationship between stock returns
and the book to market ratio.
• The selection of such fundamental variables has been guided more by intuition and
by their popularity among practitioners than by any explicit theoretical model.
4. • Ball (1978), and more recently, Fama (1991) and Fama and French (1988) suggest
reasons why such variables might help to predict returns.
• In particular, yield surrogates such as the earnings yield and the dividend yield are
correlated with returns because they proxy for underlying risks not otherwise
accounted for by traditional risk measures such as betas.
• In addition, the information content of the release of accounting reports is examined
by Sakakibara, Yamaji, Sakurai, Shiroshita, and Fukuda (1988) and Darrough and
Harris (1991).
• Elton and Gruber (1989) analyze the relationship between expectational data and
actual stock performance.
• The difference between U.S. and Japanese P/E multiples is examined by Bilder see,
Cheh, and Lee (1990) and French and Poterba (1990).
• Finally, daily and intraday patterns in index returns are studied by Jaffe and
Westerfield 1985) and Kato, Ziemba, and Schwartz (1990). Nakamura and Terada
(1984) and Kato and Schallheim (1985) document size and seasonal anomalies,
while Nakamura and Terada (1984) and Aggarwal, Rao, and Hiraki (1986)
document P/E and size effects.
5. Purpose of the Study
To explore the cross-sectional predictability of equity returns in Japan
To provide compact summary of the relationship between stock returns and
fundamental variables i.e., Earning Yield, Cash Flow Yield Size and Book to
market ratio.
Research Methodology
• Study is based on the analysis of the relationship between stock returns and
fundamental variables. Analysis conducted at the portfolio level where the portfolio
is constructed under different grouping schemes.
• Alternative statistical specification and various estimation methods applied for
comprehensive & high-quality data set that extends from 1971 to 1988. The sample
includes both manufacturing and non-manufacturing firms, companies from both
section of the Tokyo Stock Exchange, and also de listed securities.
• The study employs the Seemingly Unrelated (SUR) model to adjust portfolio risk
and test for the significance of the fundamental variables.
6. • The SUR methodology assumes that the beta for the portfolios is constant over time.
• Model Rpt – Rft = α0 + βp1 (RWt – Rft) + βp2 (REt – Rft) + α1 (E/P) pt +
α2(LS)pt + α3 (B/M) pt + α4 (C/P) pt + ept ………... (1)
• Where, P= 1….64, t=1….210. Dependent variable is Return on Portfolio P in the
month t, rpt less the risk-free rate in the month t. RWt, Rft and REt are the returns
on the value weighted and equally weighted indexes in the month t.
• It provides a compact summary of the relation between stocks returns and
fundamental variables.
• Prior research indicates that the relationship between equity returns and fundamental
variables is different in US for January versus Non-January months.
• This issue is addressed by introducing dummy variables for January and non-
January months into equation (2): Rpt – Rft= α0 Djt + α0r (1-Djt) + βp1j (RWt –
Rft)Djt + βp1r (RWt – Rft) (1 – Djt) + βp2 j (REt – Rft) (1 – D jt) + βp2r (REt –
Rft) (1 – Djt) + α1j( E/P) pt Djt + α1r (E/P)pt ( 1 - Djt) + α2 j(LS)pt Djt + α2r
(LS)pt (1 – Djt) + α3j (B/M)pt Djt + α3r (B/M) pt (1 – Djt) + α4j (C/P)pt Djt +α4r
(C/P) pt (1–Djt)+ ept
7. • Where P= 1,…..64; t=1,….210 Djt is a dummy variable where it takes the value of 1
in the month of January and 0 otherwise.
• The other variables are defined as in equation (1). The study also applies the Fama-
MacBeth (1973) Methodology where this procedure update betas periodically.
• The basic model for month t is Rpt – Rft = α0t + b1t βp1 + b2t βp2 + α1t(E/P) pt +
α2t(LS) pt + α3t(B/M) pt + α4t(C/P) pt + ept
• (3) Where, Rpt – Rft is the excess return on portfolio (security) P, βp1, βp2 are beta
for two factor model with factors being excess return on value and equally weighted
indexes. E/P and C/P are the earning yield and cash flow yields, respectively. LS is
the natural logarithm of market capitalization, and B/M is the book to market ratio.
Major Findings
• All the SUR regressions in Table II use the same 64 portfolios where first we
group by earnings yield, then by size, and last by book to market ratio.
• The first four models include one of the four independent variables at a time.
Models 5 to 7 include various combinations of the fundamental variables and
Model 8 includes all our fundamental variables.
8. • The sample comprises stocks from both sections and the fundamental variables, as
in previous studies utilizing this approach, are not adjusted for the change in levels
over time.
• The results are striking. They differ from the findings obtained from U.S. data and
from previous results on the Japanese market. Moreover, the results conflict with the
univariate tests presented in Table I.
• The earnings yield effect is not significant across the different models; it is not even
significant if E/P is the only independent variable.
• If all the fundamental variables are included, the coefficient on E/P has a negative
sign, implying that stocks with low earnings yields outperform stocks with high
earnings yields.
• Size, in general, is significant but with an unexpected sign in all the models-large
companies in Japan tend to outperform small companies.
• This finding is inconsistent with the univariate results in Table I.
9. • This discrepancy in results may be due to the fact that the distribution of the
fundamental variables changes over time, and pooling the observations on the
unadjusted variables fails to account for such changes.
• While the C/P and B/M variables are widely used by the financial community as
important indicators of value, they have received relatively less attention in the
academic literature.
• They find that the cash flow yield variable and the book to market variable have the
expected positive signs.
• The coefficient on the C/P variable is marginally significant, whereas that on the
B/M variable is at least two standard deviations away from zero in all the models.
• In Model 7, earnings yield is replaced by the cash flow measure.
• For Japanese firms, the cash flow variable may be more informative than earnings
yields, since reported earnings are likely to be distorted by the substantial
divergence between economic and reported depreciation.
• This is consistent with the "quality of earnings" explanation discussed by Bernard
and Stober (1989), according to which earnings per share is more easily
manipulable.
10. • In both Models 7 and 8, where cash flow and earnings yield are simultaneously
included, the cash flow variable has a positive coefficient and a t-statistic slightly
above two.
• These results suggest that C/P may be more important in predicting returns than E/P,
although it is important to note that the two variables are quite highly correlated.
• The book to market ratio consistently has the largest coefficient and the highest t-
statistic in every model in Table III.
• Since the book to market ratio is likely to be less noisy than earnings and cash flow
yields, its influence can be detected more reliably.
• In the full model (Model 8), only the coefficients on B/M and C/P are statistically
different from zero.
• If anything, the results for these two variables may be understated; in forming
portfolios, they group by B/M last and do not group by C/P, thereby dampening the
dispersion across portfolios in the values of these variables.
• The magnitude of the coefficients suggests that the variables are not only
statistically but economically significant as well.
11. • For example, in 1988, for the book to market variable, the difference between the
boundaries of the upper and lower 10 percentiles are 1.28 (after dividing by the
mean).
• According to Model 8 (Table III), the coefficient of the book to market ratio is
0.0034, which implies a difference in monthly returns of .44%.
• The unprecedented appreciation of the Japanese market in recent years has
motivated arguments on the applicability of traditional fundamental variables in
explaining cross-sectional differences in stock returns.
• To address this issue, the results from Table III were replicated for the second half
of the period, 1980-1988.
• The results (not presented) in general carry over. As before, the book to market ratio
is the most significant variable across the different specifications.
12.
13.
14.
15.
16.
17.
18.
19.
20.
21.
22. Conclusion
• This study is based on cross-sectional differences in returns on Japanese stocks to the
underlying behavior of four fundamental variables; earnings yield, size, book to market
ratio, and cash flow yield.
• This study reveals a significant relationship between fundamental variables and expected
returns in the Japanese market. The book to market ratio and cash flow yield has the most
significant positive impact on expected returns.
• A cash flow yield has a positive and in general highly significant impact on expected
returns. Earnings yield and size have been the sole focus of cross-sectional studies on the
Japanese market.
• It is hardest to disentangle the effect of the earnings yield variable. In the context of the
full model, earnings yield has a negative impact on stock returns and is in some cases
reliably negative.
• E/P has a positive and nearly significant impact on stock returns. Due to failure in
application of the SUR methodology, the economic hypothesis predicts that relative values
of their fundamental variables, the failure to perform this adjustment results in a mis-
specified model.
23. Critical Appreciation
• This study helps to fill this void by exploring the relationship between equity
returns and fundamental variables.
• The results provide evidence on which fundamental variables (if any) are at work
in the Japanese market.
• Firms with large capital investments tend to have substantially understated
earnings.
• This study helps to deal with anomalous price behavior on the Tokyo Stock
Exchange.