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Enterprise valuation using the adjusted net assets methodology – case study

Enterprise valuation using the adjusted net assets methodology – case study

Author(s): Krzysztof Janas / Language(s): English / Issue: 3 (16)/2013

Keywords: company valuation; net assets; equity; liabilities

The purpose of this article is to supplement the space between the theoretical and practical approach to business valuation method adjusted net assets. The combination of legal principles and recommendations of how to establish the theoretical adjustment of individual balance sheet items valued companies, using the examples from the Polish capital market, allows the reader familiar with same accounting policies to make the company’s valuation using the presented method. The author proposes ways to determine the corrections, especially for other funds, unlisted joint stock companies and bonds due to the acceptance of an independent auditor and the Financial Supervisory Commission who, in turn, provide an assurance of the correctness of a valuation prepared in this way.

Implications of the Common Consolidated Corporate Tax Base Introduction on Tax Revenues (case study on Romania)

Implications of the Common Consolidated Corporate Tax Base Introduction on Tax Revenues (case study on Romania)

Author(s): Logica Banica,Daniela Pîrvu,Alina Hagiu / Language(s): English / Issue: 01/2011

Keywords: coordination; tax revenues; corporate income; EU formula apportionment

For solving the existing difficulties in corporate income taxation, the European Commission proposed the introduction of measures for coordination, solution contested by some Member States but supported by most professionals and many organizations representing the interests of European employers. Disputes in connection with the introduction of the "Common Consolidated Corporate Tax Base" are determined by the uncertainty regarding its effects. Since corporate income tax has an important contribution in forming the central budget revenues, the "Common Consolidated Corporate Tax Base" is a challenge for Romanian public authorities. The Romanian government has not expressed until the moment a choice in this respect. In this paper we intend to take stock of the main points of view about the implications of introducing the common consolidated corporate tax base made by specialists and to estimate the effects of the EU formula apportionment on corporate tax revenues in Romania. For the particular conditions of 2008 we concluded that Romania would register an increase in tax revenue. Accumulating that advantage with the other benefits of the common consolidated corporate tax base we believe that the Romanian authorities should support the actions to coordinate the corporate income tax systems in the European Union.

Dynamic capabilities and competitive advantage: findings from case studies

Dynamic capabilities and competitive advantage: findings from case studies

Author(s): Matej Lahovnik,Lidija Breznik / Language(s): English / Issue: Spec/2016

Keywords: dynamic capabilities; competitive advantage; information technology (IT) industry; case study;

Our paper highlights the importance of the dynamic capabilities perspective as a field of study in today's dynamic environment. The dynamic capabilities view has received a lot of attention in recent years, although the outcome is a complex with limited empirical studies. In our study we conducted in-depth interviews in six representative IT firms. The underlying assumption is that firms, which are able to reconfigure their resources and capabilities, in line with recognized opportunities and environmental change, can create and sustain a competitive advantage. We argue that firms with a stronger commitment to deploying dynamic capabilities are more successful, and vice versa. The results suggest that ignoring the deployment of a single dynamic capability can negatively affect the deployment of other dynamic capabilities since they are correlated and interwoven. Our paper is also considered to be important from practitioners’ point of view. We believe the results will help managers to understand how dynamic capabilities work and will guide them in deploying capabilities in their own organizations.

PROTECTION OF MINORITY SHAREHOLDERS FROM FINANCIAL TUNNELING: THE CASE OF BOSNIA AND HERZEGOVINA

PROTECTION OF MINORITY SHAREHOLDERS FROM FINANCIAL TUNNELING: THE CASE OF BOSNIA AND HERZEGOVINA

Author(s): Veljko Trivun,Mia Mrgud / Language(s): English / Issue: 3/2012

Keywords: Minority shareholders; Financial tunneling; Delisting; Preemptive rights;

In this article we examine legal protections against financial tunneling available to minority shareholders in Bosnia and Herzegovina. We analyze legal rules that specifically address the most common forms of financial tunneling in both entities of B&H, their application in practice, and compare them with the adequate protections provided to minority shareholders in comparative laws. Before introducing company law changes in 2008 in Federation of B&H was registered a significant number of cases of joint-stock companies delisting and going private. There are indications that those transactions occured without any compensation given to minority shareholders of those companies. In the article we focus on these cases and use experiences from other transition countries to evaluate the protections offered by entity company laws and propose their future improvements.

Management accounting practices in developing countries since the 1990s: the case of Poland

Management accounting practices in developing countries since the 1990s: the case of Poland

Author(s): Anna Szychta / Language(s): English / Issue: 99/2018

Keywords: management accounting; practices; change; economic factors; institutional drivers; Poland

The aim of this paper is to identify the type of management accounting (MA) practices used in business entities surveyed in Poland, and to recognize the direction and factors of changes in MA methods and tasks in the almost three decades of the dynamically developing market economy in Poland, after the change of the socio-political system at the turn of the 1980s and 1990s. The author answers several research questions based on a review of the previous literature and data obtained from three surveys conducted in 1999, 2005, and 2016. This study confirmed that the number of companies in Poland which have departments that carry out tasks in the area of MA/controlling has increased steadily. The research indicates that operational MA methods dominated in enterprises between 2010–2015, just like in 2000–2005 and in the 1990s. It also found that in no more than 10% of the medium and large business entities which responded in 2016 are the methods of strategic MA used. In the first period of the development of the market economy in Poland, i.e., until 2004, many different economic and institutional factors influenced the introduction and change in MA practices, and in the next period, the respondents of the empirical studies pointed to economic factors as being more important. The paper contributes to the literature on the development of MA in Central and Eastern European countries on the example of Poland

CCOUNTING AND FISCAL CONSIDERATIONS UPON PERFORMANCE GUARANTEES - PARTICULAR CASE OF CONSTRUCTION WORKS

CCOUNTING AND FISCAL CONSIDERATIONS UPON PERFORMANCE GUARANTEES - PARTICULAR CASE OF CONSTRUCTION WORKS

Author(s): Dorel Mateș,Adriana Puşcaş,Daniela Pordea / Language(s): English / Issue: 4/2018

Keywords: guarantee; performance; provisions; construction;

The performance guarantee represents the contractor's liability to ensure the beneficiary on the fulfillment of the quality conditions for the contracted works, as well as of their execution within the agreed contractual term. In the context of a growth trend in the industrial construction market since 2018, we considered it appropriate to study the impact of the performance guarantees on the financial balance of the contractors operating on this market. Through this research we aim to analyze the methods of guaranteeing the construction works, to assess the financial, accounting and fiscal issues of a construction company as a general contractor, to identify potential risks and to find solutions to avoid them.

Labour Force Reduction’s Influence on Financial Performance of Manufacturing Companies: A Case Study of Playtime Manufacturers (2011 – 2016)

Labour Force Reduction’s Influence on Financial Performance of Manufacturing Companies: A Case Study of Playtime Manufacturers (2011 – 2016)

Author(s): Wadesango Newman,D.C. Gwangwadza,Charity Mhaka,Ongayi Wadesango / Language(s): English / Issue: 5/2018

Keywords: labour force; financial performance; manufacturing company; reduction;

The objective of the study was to determine the influence of employing labour force reduction initiatives on financial performance of manufacturing companies. The researchers adopted aquantitative methodology. Primary data was collected from the total target population through questionnaires. A census was used to ensure that there was no bias and that findings could be generalised to the entire organisation with accuracy. The first major finding was that manufacturing companies in this developing country use layoffs, furloughs, outsourcing and delayering as labour force reduction methods. The second finding was that employees had adverse emotional reactions after labour force reduction initiatives, however, the emotions did not manifest to physical reactions such as strikes and employee turnover. The final finding was that labour force reduction is positively related to financial performance as measured by Return on Total Assets (ROTA). This research will enable organisation seeking to implement labour force reduction measures to critically assess method, effects and factors to consider before selecting a method best suited for their organisation. The study will add to literature on labour force reduction and performance of an organisation. The research will assist future students researching on labour force reduction as well as academics.

Benford’s Law in the Case of Hungarian Whole-Sale Trade Sector

Benford’s Law in the Case of Hungarian Whole-Sale Trade Sector

Author(s): Rabeea Sadaf / Language(s): English / Issue: 12/2016

Keywords: Benford’s Law; Sectoral Analysis; Mean Absolute Deviation;

Benford’s law has attracted many researchers for detecting the fraudulent data and can be used as one of the digital analysis tools for auditing of the accounting data. In this treatise, the accuracy of figures reported in Hungarian Trading Companies’ data are examined through digital analysis technique with the consideration of Benford’s Law. The net sales data from the period of year 2009 to 2014 has been used for detecting the anomalies and to confirm whether the digit-pattern follows Benford’s distribution. Through the obtained results we claimed that the frequencies of first and second digits’ place follow the Benford’s theoretical distribution and exhibits to close conformity. Moreover analysis of the second, first order and second-order gave a mixed result of close conformity to significant deviation from expected frequency. Also the absolute deviation (MAD) value of first and second digit suggest an overall conformity of the data to Benford’s distribution.

A Survey of Takeover Regulation and Practice in Serbia: The Case of Mandatory Provisions

A Survey of Takeover Regulation and Practice in Serbia: The Case of Mandatory Provisions

Author(s): Ksenija Denčić-Mihajlov / Language(s): English / Issue: 3/2010

Self-serving performance attributions in the letters to shareholders: A longitudinal case study

Self-serving performance attributions in the letters to shareholders: A longitudinal case study

Author(s): Maria-Silvia Săndulescu / Language(s): English / Issue: 2/2019

Keywords: attribution theory;case study; impression management; letter to shareholders; privatization;

Research Question: How are post-privatization corporate narratives used by the companies in framing their financial performance? Motivation: This research departs from previous literature that scrutinized the use of narratives in the context of corporate privatizations (Craig & Amernic, 2008). The study adopts a social-psychology perspective on impression management (Leary & Kowalski, 1990), drawing on the attributional repertoire developed by Aerts (2005) in order to analyse the causal explanations of performance outcomes. Idea: This paper relies on the case of OMV Petrom with a view of analysing the evolution of the messages used in framing the success of the company. Data: The letters to shareholders issued by the company from 2005 to 2011 were considered. Tools: A manual content analysis was performed in order to identify the causal attributions of performance outcomes. The enriched self-serving explanatory patterns (i.e. entitlement, enhancement, excuse, justification and causality denial) were evaluated. Findings: The results confirm the use of assertive and defensive tactics in framing performance upturns and downturns. Moreover, the decrease in the financial performance was presented by highlighting the negative influence of external factors which was counterbalanced by remedial actions. Contribution: The paper contributes to the impression management literature by using the context of a forced privatization as a means of providing explanations. The study illustrates the use of additional techniques in framing negative results which may further extend the attributional repertoire developed by previous researchers.

Social values impaired by the manipulation of sports and betting events: the case of the Republic of Moldova

Social values impaired by the manipulation of sports and betting events: the case of the Republic of Moldova

Author(s): Gheorghe Reniță / Language(s): English / Issue: 1/2019

Keywords: match-fixing; sport; betting; fair play; Republic of Moldova;

This paper identifies the values (and, implicitly, the social relations hence generated) defended against the manipulation of sports and betting events. Consequently, in the Republic of Moldova, the manipulation of sports and betting events is classified as a specific criminal offence. Under the Criminal Code of the Republic of Moldova, such an offence involves encouraging, influencing or instructing a participant in a sports event or a participant in a betting event to take acts that would produce a flawed effect on that particular event with the purpose to unduly derive goods, services, privileges or advantages of any kind for oneself or for another person. Sports events as well betting events shall be honest, unpredictable and carried out as per the principle of fair play. The author found that these values are impaired by the manipulation of a sports event or by the manipulation of betting events. Moreover, this criminal offence alienates supporters/fans from such events. Finally, the offence in question has repercussions on business activities performed in conjunction with sports events and with other kinds of events offering the possibility to make bets.

CODES OF ETHICS VERSUS EMPLOYEE MOTIVATION: THE RESULTS OF CASE STUDY RESEARCH

CODES OF ETHICS VERSUS EMPLOYEE MOTIVATION: THE RESULTS OF CASE STUDY RESEARCH

Author(s): Kamil Kowalski,Andrzej Pieczewski / Language(s): English / Issue: X/2019

Keywords: Codes of ethics; moral values; motivation of employees.

The aim of this article is to indicate possible relations between codes of ethics adopted in companies and organizations and the values actually expected by employees. The implementation of codes does not necessarily mean observance of the declared norms. There is an opinion in the literature that ethical codes are mainly aimed at improving the perception of the company on the market and thus indirectly serve to increase profits. Following the ethical norms by employers is important to the employees' perception of the work environment as fair or not, which in turn influences, inter alia, the level of their motivation and commitment. The authors, using the free (unstructured) interview method, interviewed 100 respondents of three organizations (one from the public sector and two from the private financial sector). The purpose of the interviews was to determine what values are appreciated most by employees in their workplace. The values were divided into several categories: fair wages, fair duty burden sharing, equal development opportunities, equal treatment of sexes, equal treatment by the chief, clear employee evaluation procedures, equal promotion opportunities, fair distribution of prizes. The results of the survey indicated that over 60% of employees pointed that fair wages policy and a fair share of duties are the most important from their point of view. An important issue was also the equal treatment of the sexes (11%). The rest of the factors were mentioned as significant by 5% (and fewer) of the respondents.

INTERNAL AND EXTERNAL BRANDING: A CASE STUDY OF SIMPO FURNITURE COMPANY

INTERNAL AND EXTERNAL BRANDING: A CASE STUDY OF SIMPO FURNITURE COMPANY

Author(s): Gajo Vanka M. / Language(s): English / Issue: 1-2/2019

Keywords: added value; business clusters; business incubator; case study; competition; corporate brand; innovation; internal & external branding; research projects; technology

This paper focuses on corporate branding application. The research question here is if corporate branding can add value to the incubated furniture company, as well as how to connect corporate branding with value. When researching this question, it is necessary to research further on the division of corporate branding which is internal & external (hereinafter referred to as „int. & ext.”) branding, since a company added-value is from the cooperation and connection of int. & ext. branding. Only when int. & ext. branding work closely together, corporate branding may add more value to a company. In methodology, it was used a qualitative research method, which is company in-depth interviews, in order to research SIMPO's int. & ext. branding experience. This case study is helpful to analyse how corporate branding is connected to an enterprise value. Through SIMPO's case, being the largest furniture manufacturer and among the largest companies in terms of turnover in Serbia which has been a de facto state-owned business incubator for the majority of light manufacturing companies in and around the city of Vranje, it is illustrated that int. & ext. branding must combine in order to add value to a company. Corporate branding can really create value by increasing more adaptability/uniqueness/recognition. All in all, corporate branding is significant and can add value to companies. Corporate branding will play a more significant role in future marketing competition, so research on the corporate branding is likely to become more meaningful and interesting.

The EU Puzzling CSR Regime and the Confused Perception by Ambassadors of Luxury Fashion Businesses: A Case Study from Pařížská

The EU Puzzling CSR Regime and the Confused Perception by Ambassadors of Luxury Fashion Businesses: A Case Study from Pařížská

Author(s): Radka MacGregor Pelikánová,Robert Kenyon MacGregor / Language(s): English / Issue: 3/2020

Keywords: corporate social responsibility (CSR); EU law; luxury industry

Despite a decades-long discussion about corporate social responsibility ("CSR"), there is little known about the evolution and meaning of the EU law on CSR and its perception by various stakeholders. The two objectives of this paper are: (i) assessing the evolution to the current EU law on CSR and (ii) making a case study about the perception of CSR by businesses from the luxury fashion industry supposed to be the leading CSR force, namely their ambassadors - CEOs and employees facing the clientele in Pařížská street in Prague. In order to address these two objectives, holistic and interdisciplinary research of economic, legislative and academic sources as well as a case study, entailing interviews and mystery shopping was performed. The exploration of the yielded data employed Meta-Analysis, content analysis, teleological interpretation, etc. The critical and comparative review of the evolution of the EU law on CSR shows piecemeal trends and a lack of permanent consent. This leads to the fragmentation and ambiguity, which is matched by the findings of the case study. The perception of the EU law on CSR is done differently by various CEOs of luxury fashion businesses, and there is an inconsistency between their attitudes and those of their employees facing the clientele. Such inconsistency undermines the effectiveness and efficiency of the CSR regime and needs to be corrected.Implications for Central European audience: Although the sustainability projected in CSR is critical, the EU law has undergone a complex and fragmented evolution leading to a partially mandatory framework. The understanding and application of such a framework about CSR and its reporting is a challenge. A Central European case study of luxury fashion industry businesses shows piecemeal trends and a lack of consent, and this even among CEOs and frontline employees of the same business. The implication of such an inconsistency is a decrease in the effectiveness and efficiency of the CSR regime, a devaluation of the CSR awareness and the need for corrections.

ESTIMATION OF BANKRUPTCY RISK BASED ON AUDIT OPINIONS: CASE STUDY IN ROMANIA

ESTIMATION OF BANKRUPTCY RISK BASED ON AUDIT OPINIONS: CASE STUDY IN ROMANIA

Author(s): Moțoc Mădălin-Mihai / Language(s): English / Issue: 3/2021

Keywords: economic fraud; audit; risk of fraud; bankruptcy risk model;

In a world focused on growth, capital accumulation and continuous economic development, it is important to build safety levers to ensure that investors see a return on their investments. Media outlets, brokers, financial institutions and the business environment are now referring, more than ever, to investment policies not only of companies, but also of individuals with sustainable economic capital. Platforms such as Forex, e-Toro, Capital.com, Libertex, cryptocurrency trading platforms and free access to the Stock Exchange now make it extremely easy for third-party investors, with promises of significant returns in a very short period of time. But are all these exhortations and “marketing guns” directed at individuals’ finances devoid of speculative interest? The purpose of this paper is to identify a model of bankruptcy risk estimation that is based on the opinions of audit companies regarding the reasonableness of annual financial statements and their associated fraud risk. This paper presents an empirical approach to the insolvency phenomenon, based on the opinions of the auditors who classify the audited companies as having an associated fraud risk. The study was conducted at the level of companies on the main trading market of the Bucharest Stock Exchange. The results show that an audited company as having classified by auditors as an associated fraud risk is at least one step closer to bankruptcy, as opposed to companies without an assessed risk of associated fraud. The ability of audit companies to contribute to bankruptcy risk estimation models by flagging fraud risk, based on analysis of financial statements, represents a recurring problem in the specialized literature. This paper brings added value in establishing viable models of bankruptcy risk for big companies on the market.

RESPECT FOR THE RIGHT OF DEFENCE IN ACCORDANCE WITH THE CASE LAW OF THE EUROPEAN COURT OF HUMAN RIGHTS

RESPECT FOR THE RIGHT OF DEFENCE IN ACCORDANCE WITH THE CASE LAW OF THE EUROPEAN COURT OF HUMAN RIGHTS

Author(s): GHEORGHIU Elena / Language(s): English / Issue: 1/2022

Keywords: right of defence; access to file; time; information; lawyer; facilities; free assistance; interpreter;

The right of defence is the cornerstone of a fair trial in which the parties enjoy certain procedural guarantees in order to find out the truth in the case and to protect the accused person from abuse by the authorities. The case law of the European Court of Human Rights provides numerous solutions regarding the application and interpretation of Article 6, paragraph 3 of the European Convention on Human Rights on the right of defence, which grants the accused the right to receive detailed information on the accusation, to have adequate time and facilities necessary for the preparation of his defence, to defend himself in person or through legal assistance, to hear the prosecution's witnesses and to obtain the ttendance of defence witnesses, as well as the right to free assistance of an interpreter.

THE SIGNIFICANCE OF ACCOUNTING INFORMATION AND THE EFFECTS ON SHAREHOLDER COMPANIES, CASE OF NORTH MACEDONIA 1995-2020

THE SIGNIFICANCE OF ACCOUNTING INFORMATION AND THE EFFECTS ON SHAREHOLDER COMPANIES, CASE OF NORTH MACEDONIA 1995-2020

Author(s): Ali Maksuti / Language(s): English / Issue: 17-18/2022

This research paper is based in study about the importance of accounting information and the direct effect on companies in market of North Macedonia. In details the paper examines characteristics of the solid company, stockholders’ numbers, status of companies, law of accounting in process of evidence, the changes of the prices, stock price measure and the industrial sectors in North Macedonia from 1995 till 2020. Bookkeeping is the most important process of the success of the company, and the has the greatest value relevance being the best predictor for e company, while cash flows show insignificant results. At the end, from the result of this study conclusions that are shown are from that closing price is the dependable among the stock price in detecting the accounting information value which are important in North Macedonia market. At the same time, this research paper shows the capability of valuation model to cooperate with other theories by putting the effect of accounting system information on the accounting value significance. Our results might use in educational institutions, courses or lectures or for guidelines to investors in North Macedonia, managers, owners of the companies or financial institutions for better summarize the company value.

IMPORTANCE OF VAT DIGITIZATION FOR INCOME DISCLOSURE IN SECTION F-CONSTRUCTION - A CASE FOR POLAND

IMPORTANCE OF VAT DIGITIZATION FOR INCOME DISCLOSURE IN SECTION F-CONSTRUCTION - A CASE FOR POLAND

Author(s): Anna Kowal-Pawul,Grzegorz Przekota / Language(s): English / Issue: 4/2021

Keywords: VAT digitization; tax gap; split payment mechanism; Standard Audit File for Tax; STIR

The ongoing digital transformation is visible in the tax world. In Poland, the process that began in 2016 is defined by the authors as the VAT digitization process. The solutions introduced by the legislator have primarily been aimed at curbing tax evasion and at authorizing efficient audit and as a result, tightening of VAT tax system. The purpose of the paper is, thus, to highlight the importance of VAT digitization in disclosing income in section-F of the economy – construction and in section-G – wholesale and retail trade; repair of motor vehicles, including motorcycles. There are several reasons these sectors were chosen. In 2016, the Ministry of Finance indicated that the construction industry was characterized by a high risk of tax fraud (making it a so-called sensitive industry). The same year, construction, along with trade, became the sectors affected most by the shadow economy. The conclusion was based on the observation of the construction sector value added in the period of 2017-2019 set against the previous period of 1995-2016 and compared with the trade value added in 1995 2016 and 2017-2019 respectively. The study has found a visible value-added increase, which was reasonably greater than what would have resulted from the economic boom, proving that the income which has so far been subject to tax fraud has been duly demonstrated. Research hypothesis, VAT digitization has a greater impact on disclosing income in section F than in section G, has been positively verified.

Optimal Labour Income Taxation in Poland: The Case of High-Income Earners

Optimal Labour Income Taxation in Poland: The Case of High-Income Earners

Author(s): Maciej K. Dudek,Paweł Dudek,Konrad Walczyk / Language(s): English / Issue: 1/2023

Keywords: social welfare; economic efficiency; Pareto distribution; optimal taxation

In this paper, we use actual data provided by the Polish tax authority and characterise the properties of income distribution in Poland in the case of high-income earners. By employing a variety of techniques we are able to confirm that the distribution of income in Poland can be approximated with a Pareto distribution in its upper tail. This finding makes the formula for the optimal marginal tax rates of Saez [2001] applicable to the Polish case and allows us to provide estimates of the optimal marginal tax rates for Poland. We show that the current tax policy in Poland is not optimal. Specifically, we show, by relying on empirically viable estimates of the elasticity of the labour supply with respect to the wage, that the optimal marginal tax rate at high income levels exceeds 60%. In other words, we suggest that there is room for a welfare-improving reform in Poland, and we argue that high-income individuals should be expected to contribute substantially more at the margin than they currently do.

DETERMINING THE MOST PROBABLE SOCIAL PREDICTORS OF FINANCIAL PERFORMANCE: A CASE STUDY

DETERMINING THE MOST PROBABLE SOCIAL PREDICTORS OF FINANCIAL PERFORMANCE: A CASE STUDY

Author(s): Bîltac Olivian / Language(s): English / Issue: 39/2022

Keywords: social and financial performance; social performance score; financial performance score; social performance reporting;

Abstract: It has long been the subject of debate, what the role of a company should be in society, and just how much social responsibility companies should undertake as a direct response to stakeholder needs. As all economic activities require incentives, so do social responsibility actions require a tangible benefit towards reaching the company’s financial goals as shown by both theoretical and practical endeavors. Therefore, the research presented in the current paper aims to bridge the gap between social performance and financial performance, by testing the causal hypothesized relationship thought to exist between indicators of a company’s social performance and those that indicate financial performance.