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Description
In this paper we conduct an out-of-sample test on gross profitability and investment in the same manner as Davis, Fama, and French (2000) for the pre-Compustat period (1926-1955). We hand-collect financial statement data from Moodys Industrial Manuals using the company PERMNO list first created by DFF. In total, we collect data from 1,291 firms, largely industrial firms but with some utilities. We then run Fama-Macbeth (1973) regressions using gross profit, scaled operating profit, scaled net income, and investment along with existing variables like book-to-market, market equity, one-month reversal, and one-year momentum. We find that the premiums on gross profitability and investment are not significant for any part of our sample period. For the overall sample period as well as the first half (before the 1933 Securities Act), our accounting data is often missing or cross-sectionally inconsistent. Despite the better-quality data in the period after 1935, however, neither gross profitability not investment have significant Fama-Macbeth slopes. We believe this is caused by inconsistent and incomplete accounting data, chiefly the number of firms that combine SG&A and COGS data into one "cost" number and the inclusion of investment-like costs, like R&D, in COGS or SG&A. This causes gross profitability to not reflect direct economic profitability as closely as in prior research. However, net income has significantly positive coefficients during this period and is not subsumed by gross profitability; this contradicts prior research for the post-1962 period. More data cleaning and analysis is needed in order to form firm conclusions on the gross profitability, net income, and investment premiums during this period.
ContributorsBergauer, Stephen (Co-author) / Pashayev, Iskandar (Co-author) / Wahal, Sunil (Thesis director) / Bessembinder, Hank (Committee member) / Department of Finance (Contributor) / Department of Economics (Contributor) / School of Mathematical and Statistical Sciences (Contributor) / Barrett, The Honors College (Contributor)
Created2016-05
Description
Since 1994, the Performance Based Studies Research Group at Arizona State University has utilized an approach to industry called Best Value (BV). Since its origin, this approach has been used in 1860 tests creating $6.4 billion dollars of projects and services delivered, at a customer satisfaction rating of 95%. Best Value (BV) is rooted in simplicity, and seeks to help organizations hire experts, plan ahead, minimize risk, optimize resources, and optimize resources. This is accomplished largely through the use of a tool the PBSRG calls the Kashiwagi Solution Model (KSM). Kashiwagi Solution Models can be used across every industry from construction to Wall Street to help achieve sustainable success in what is perhaps the most efficient and effective manner available today. Using Best Value (BV) and the Kashiwagi Solution Model (KSM), the author identified groups on Wall Street and throughout the world who deal in a unique entity called "Over-The-Counter (OTC) Derivatives". More specifically, this paper focuses on the current status and ramifications of derivative contracts that two parties enter with the sole intention of speculating. KSMs are used in Information Measurement Theory, which seeks to take seemingly complex subjects and simplify them into terms that everyone can understand. This document uses Information Measurement Theory to explain what OTC derivatives are in the simplest possible way, so that little prior knowledge of finance is required to understand the material. Through research and observation, KSMs can be used to identify the characteristics of groups who deal in OTC derivatives, which contributed to the financial crisis in 2008 and have grown in size and complexity. This document uses dominant information in order to see the potential problems within the OTC derivatives market from 30,000 feet, and offer solutions to those problems. Keywords: simplicity, best value approach, identify characteristics, dominant information
ContributorsBills, Andrew Marius (Author) / Kashiwagi, Dean (Thesis director) / Kashiwagi, Jacob (Committee member) / Rivera, Alfredo (Committee member) / Department of Finance (Contributor) / W. P. Carey School of Business (Contributor) / Barrett, The Honors College (Contributor)
Created2016-05
Description
The current state of financial inequality in America is showing multiple economic and social problems that harm the American dream and legacy. It is found that increasing inequality causes slower GDP growth, underinvestment in human capital, and disproportionate shifting of political power to the rich. Researches show that Average Americans do not realize how severe inequality has gotten over the past few decades, but one thing is clear: What they thought as ideal distribution of wealth is nowhere close to the reality. In this thesis, I examine the current state of inequality and how it has changed since the 1980s. Then, I present reasons why inequality has been on an increasing trend and identify what economic policies lead to rising inequality. With analysis of Reaganomics (trickle-down economics), I make an argument that reducing taxes on the rich might provide a short-term boost in the national economy, but such policy soon encounters side effects and is unsustainable. Fighting inequality is an imperative step to boost the American middle class and maintain sustainable and stable economic growth. In order to relieve inequality down closer to what Americans picked as the appropriate level, I present two recommendations that can be effective in fighting inequality. One is to reform the tax policies to make it more progressive especially towards the top 5% and shift the tax burden from the bottom to the top, while implementing stricter regulations regarding tax evasion. Next is to provide disadvantaged students with better access to higher education by subsidizing public universities more and lowering FAFSA rate. Realizing one's earning potential starts with education, and higher education today is more important than any other time in the past. Once these solutions prove effective and inequality is relieved, America will be able to regain her reputation as land of opportunity and enjoy faster economic growth.
ContributorsOh, Jae Yoon (Author) / Hoffman, David (Thesis director) / Sadusky, Brian (Committee member) / Yim, Roy (Committee member) / Department of Finance (Contributor) / School of Geographical Sciences and Urban Planning (Contributor) / Barrett, The Honors College (Contributor)
Created2015-12
Description
We gathered and analyzed key data from a wide-range of competitors in the foundry, fabless, and Integrated design manufacturing business. After detecting a downward trend in the return of invested capital (ROIC) and higher capital intensity of Company X, we searched for alternatives to turn this around. We conclude that, to decrease the net PPE of Company X, a sale-leaseback transaction would help Company X reduce their balance sheet and provided financing to advance their manufacturing capabilities.
ContributorsBhat, Arjun Khandige (Co-author) / Brock, Ethan (Co-author) / Gamperl, Max (Co-author) / Gupta, Viraj (Co-author) / Macha, Sanketh (Co-author) / Simonson, Mark (Thesis director) / Duran, Juan Carlos (Committee member) / Department of Finance (Contributor) / Barrett, The Honors College (Contributor)
Created2018-05
Description
In this paper the interest yield curve will be plotted at three points based upon three models that were found appropriate for each rate. Knowledge of the term structure of interest yield curves is helpful in the understanding of bond pricing, investment decisions, and public policy (ANG). This paper will examine the intricacies of the yield curve by developing three individual reference rates -a 2-year, 5-year, and 10-year- with the use of financial instruments and multivariate linear regression. Based upon the example of Nelson and Siegel (1987), Black, Derman, and Toy (1990), Mishkin (1990), Ang and Piazzesi (2002) and Diebold et al. (2005) the models will feature various financial assets as well as macroeconomic variables in order to gain an understanding of which factors have the most significant effect on interest rates.
ContributorsKim, A. Minyu (Author) / Mendez, J. Vincent (Author) / Tram, T. Dan (Author) / Gallais, Sylvain (Thesis director) / Budolfson, Arthur (Committee member) / Gopalan, Ramu (Committee member) / Barrett, The Honors College (Contributor) / W. P. Carey School of Business (Contributor)
Created2012-12
Description
Childbirth, an essential stage of human life, has been carried out and treated differently in numerous ways throughout time. Although the overall method of birth is biologically the same, women and medical professionals in the United States in particular have changed how they view and manage childbirth over the past 70 years. Some of said changes are extensive and occurred more rapidly than one might typically expect for such a delicate and important stage of a woman‘s, and infant‘s, life. As consumerism, capitalism, and the courts have changed America‘s lifestyles, politics, and society, so too have they drastically affected the way we are conditioned to approach childbirth. More importantly, as society changes over time, the medical field and
methods of specialists also change, and although the benefits of these changes are challenged by some individuals, these procedures and recommendations from professionals inevitably affect us all. Methods and procedures of modern, medicalized childbirth, and even the significance placed on the event, are products of historical and cultural factors influenced by scientific and social trends. However, there exists a small and steadily growing number of women and families who choose to have their birth take place outside of the present societal norm, and consequently outside of hospitals. This group‘s existence and growth has been attributed to several factors, including changes in societal values, differentiation between different financial classes, and the
medicalization of childbirth. Although statistically a small percentage of the majority, these women who choose to give birth outside of a hospital exist amidst an immense ongoing controversy between gynecologists, physicians, mothers, and midwives regarding what options should be available when childbirth is undertaken in the United States.
methods of specialists also change, and although the benefits of these changes are challenged by some individuals, these procedures and recommendations from professionals inevitably affect us all. Methods and procedures of modern, medicalized childbirth, and even the significance placed on the event, are products of historical and cultural factors influenced by scientific and social trends. However, there exists a small and steadily growing number of women and families who choose to have their birth take place outside of the present societal norm, and consequently outside of hospitals. This group‘s existence and growth has been attributed to several factors, including changes in societal values, differentiation between different financial classes, and the
medicalization of childbirth. Although statistically a small percentage of the majority, these women who choose to give birth outside of a hospital exist amidst an immense ongoing controversy between gynecologists, physicians, mothers, and midwives regarding what options should be available when childbirth is undertaken in the United States.
ContributorsHernandez, Dustin (Author) / Nguyen, Christy (Author) / Koblitz, Ann (Thesis director) / Budolfson, Arthur (Committee member) / Walker, Shell (Committee member) / Barrett, The Honors College (Contributor) / School of Life Sciences (Contributor) / W. P. Carey School of Business (Contributor)
Created2012-12
ContributorsFishman, Jacob (Author) / DeSerpa, Allan (Thesis director) / Hill, John (Committee member) / Barrett, The Honors College (Contributor) / W. P. Carey School of Business (Contributor)
Created2012-12
Description
This project examines entry-level processors Company X. Analyzing their current position and creating recommendations for their future positioning in regard to entry-level processors. Utilizing financial models, our group worked to determine the most effective way to optimize NPV and gross margin for this segment. With extensive step models and sensitivity analysis, we analyzed potential paths that Company X could take. Continuing to be mindful of the limitations that certain projected paths would entail. Through our analysis, we were able to form a comprehensive suggestion that had a positive 8-year NPV and improved gross margin percentage.
ContributorsHuseinovic, Ayla (Author) / Jones, Ciara (Co-author) / Mathias, Chase (Co-author) / Kuo, Ian (Co-author) / Simonson, Mark (Thesis director) / Hertz, Michael (Committee member) / Barrett, The Honors College (Contributor) / School of Accountancy (Contributor) / Department of Finance (Contributor) / Dean, W.P. Carey School of Business (Contributor)
Created2024-05
DescriptionBuck-It is a budgeting application designed to meet the unique needs of college students. As financial literacy is crucial for developing good long-term financial habits, Buck-It aims to promote budgeting among college students through an appealing user interface, robust customization, and effective categorization.
ContributorsDoyle, Michael (Author) / Davitt, Ryan (Co-author) / Walle, Andrew (Co-author) / Vemuri, Rajeev (Co-author) / Baptista, Asher (Co-author) / Byrne, Jared (Thesis director) / Lee, Peggy (Committee member) / Barrett, The Honors College (Contributor) / School of Mathematical and Statistical Sciences (Contributor)
Created2024-05
DescriptionBuck-It is a budgeting application designed to meet the unique needs of college students. As financial literacy is crucial for developing good long-term financial habits, Buck-It aims to promote budgeting among college students through an appealing user interface, robust customization, and effective categorization.
ContributorsDavitt, Ryan (Author) / Doyle, Michael (Co-author) / Walle, Andrew (Co-author) / Vemuri, Rajeev (Co-author) / Baptista, Asher (Co-author) / Byrne, Jared (Thesis director) / Lee, Peggy (Committee member) / Barrett, The Honors College (Contributor) / Department of Economics (Contributor) / Department of Finance (Contributor)
Created2024-05