Following beginning farm income and wealth over time

2017 ◽  
Vol 77 (1) ◽  
pp. 22-36 ◽  
Author(s):  
James M. Williamson
Keyword(s):  
Balance Sheet ◽  
Rapid Expansion ◽  
Farm Income ◽  
Cash Income ◽  
Content Type ◽  
Balance Sheets ◽  
Age Cohorts ◽  
Income Statement ◽  
Beginning Farmers ◽  
Over Time

Purpose The paper examines the evolution of beginning farms’ income statement and balance sheet items over a 15-year period. The purpose of this paper is to gain insight into the diversity of beginning farms from a financial point of view. Design/methodology/approach Using the USDA’s Agricultural Resource Management Survey (ARMS), the author constructs a synthetic panel of data consisting of age cohorts of beginning farmers and follow them over time. Baseline financial information for the farm income statement and balance sheet is examined in 1999 and again in 2014 for each cohort. Findings Overall, there is a marked contrast in the evolution in the income statement between beginning farmers who are under 45 years old and those over 45. The gross cash income of the youngest cohorts grows tremendously, as do their expenses, indicating rapid expansion in production on the part of the youngest cohorts. The change in the balance sheets of the cohorts also provides a glimpse into the changing roles of beginning famers over time. The youngest cohort of beginning farmers increase the current and non-current assets on their balance sheets by a substantial amount, more than doubling both. Furthermore, the youngest cohort is the only group to take on more current liabilities, indicating increased financing of the production expenses. Practical implications Differences in the evolution of financial profiles of beginning farms may predict differences in future output, and it could be a predictor of the farm’s operational goals or intentions, as well as predictor of future financial needs and challenges. Originality/value Knowing and understanding likely trajectories of beginning farmers may provide an opportunity to better tailor farm programs, outreach, and support to beginning farmers.

scholarly journals Cash flow disaggregation and prediction of cash flow

2017 ◽  
Vol 18 (4) ◽  
pp. 464-479 ◽  
Author(s):  
Ehsan Khansalar ◽  
Mohammad Namazi
Keyword(s):  
Cash Flow ◽  
Balance Sheet ◽  
Cash Flows ◽  
Prediction Errors ◽  
Content Type ◽  
Balance Sheets ◽  
Income Statement ◽  
Aggregated Model ◽  
Flow Components ◽  
Future Cash Flows

Purpose The purpose of this paper is to investigate the incremental information content of estimates of cash flow components in predicting future cash flows. Design/methodology/approach The authors examine whether the models incorporating components of operating cash flow from income statements and balance sheets using the direct method are associated with smaller prediction errors than the models incorporating core and non-core cash flow. Findings Using data from US and UK firms and multiple regression analysis, the authors find that around 60 per cent of a current year’s cash flow will persist into the next period’s cash flows, and that income statement and balance sheet variables persist similarly. The explanatory power and predictive ability of disaggregated cash flow models are superior to that of an aggregated model, and further disaggregating previously applied core and non-core cash flows provides incremental information about income statement and balance sheet items that enhances prediction of future cash flows. Disaggregated models and their components produce lower out-of-sample prediction errors than an aggregated model. Research limitations/implications This study improves our appreciation of the behaviour of cash flow components and confirms the need for detailed cash flow information in accordance with the articulation of financial statements. Practical implications The findings are relevant to investors and analysts in predicting future cash flows and to regulators with respect to disclosure requirements and recommendations. Social implications The findings are also relevant to financial statement users interested in better predicting a firm’s future cash flows and thereby, its firm’s value. Originality/value This paper contributes to the existing literature by further disaggregating cash flow items into their underlying items from income statements and balance sheets.

What influences bank lending in Saudi Arabia?

2020 ◽  
Vol 27 (2) ◽  
pp. 125-155
Author(s):  
Ken Miyajima
Keyword(s):  
Saudi Arabia ◽  
Private Sector ◽  
Balance Sheet ◽  
Oil Prices ◽  
Bank Lending ◽  
Policy Implications ◽  
Content Type ◽  
Balance Sheets ◽  
Level Data ◽  
Bank Balance Sheets

PurposeDeterminants of credit growth in Saudi Arabia are investigated.Design/methodology/approachA panel approach is applied to macroeconomic and bank-level data spanning 2000 ‐15.FindingsBank lending is supported by strong bank balance sheet conditions (high capital ratio, and growth of NPL provisioning and deposits), and higher growth of both oil prices and non-oil private sector GDP. Lower bank concentration also helps, likely through greater competition, so does stronger institution. Consistent with the literature, lending by Islamic banks may be more responsive to economic activity. Lending remained robust in 2015 despite oil prices having declined, helped by strong bank balance sheets and as banks reduced their holdings of “excess liquidity”. To support bank lending in the period ahead, bank balance sheets need to remain strong. Fiscal adjustment and a reduced reliance on banks to finance the budget deficit would support credit provision to the private sector.Originality/valueThe paper is first to analyze in detail determinants of bank lending in Saudi Arabia applying a panel approach to bank level data, and draws critical policy implications.

The “need to know” and the lack of online transparency among political parties

2015 ◽  
Vol 9 (1) ◽  
pp. 85-103
Author(s):  
Beatriz Cuadrado-Ballesteros ◽  
Luis Andrés Vaquero-Cacho
Keyword(s):  
Political Parties ◽  
Graphical Representation ◽  
Balance Sheet ◽  
Public Information ◽  
Financial Information ◽  
Content Type ◽  
Income Statement ◽  
Robust Control System ◽  
Political Foundations ◽  
Management Report

Purpose – This paper aims to analyse the level of informative transparency among Spanish political parties and political foundations, according to general and descriptive information (e.g. contact, ideas and values, electoral programmes, members, etc.) and economic, governance and financial information. Design/methodology/approach – The situation of the parties in each year is represented by a biplot, which is a graphical representation of a multivariate sample. The data for this analysis were obtained from the reports published by Fundación Compromiso y Transparencia (Foundation for Integrity and Transparency) for 2011 and 2012. Findings – This paper evidences the existence of serious problems of opacity, especially in relation to financial information (balance sheet, income statement, annual accounts and audit report) and information on the fulfilment of goals and programmes (management report and compliance report). Originality/value – This is the first attempt to analyse statistically the level of transparency of political parties and foundations, showing the need for a robust control system and for mechanisms to penalise conduct that limits citizens’ access to public information.

Farm income and output and lending by the farm credit system

2017 ◽  
Vol 77 (1) ◽  
pp. 125-136 ◽  
Author(s):  
Denis Nadolnyak ◽  
Xuan Shen ◽  
Valentina Hartarska
Keyword(s):  
Real Estate ◽  
Financial Markets ◽  
Fixed Effects ◽  
Balance Sheet ◽  
State Level ◽  
Farm Income ◽  
Full Time ◽  
Data Set ◽  
Content Type ◽  
Rural Financial Markets

Purpose The purpose of this paper is to provide evidence of the positive impact of the FCS lending on farm incomes which should be useful to policymakers as they consider reforms and further support for this 100-year-old major agricultural lender. Design/methodology/approach The authors construct a panel for the 1991-2010 period from the FCS financial statements and evaluate how lending by the FCS institutions has affected farm incomes and farm output. The authors use fixed effects estimations and control for credit by other agricultural lenders as well as the stock of capital, prices, and interest rates. Since previous work suggests that rural financial markets are segmented and the FCS serves larger full-time farmers with mostly real-estate backed loans, the authors evaluate the impacts of farm real-estate backed loans and of short-term agricultural loans separately for a shorter period for which the data is available. The authors also perform robustness checks with alternative estimation techniques. Findings The authors found a positive association between credit by the FCS institutions and farm income and output. The magnitude of the estimated impact is larger during the 1990s than in the 2000s. Research limitations/implications The positive link between the FCS institutions’ credit and farm incomes and output supports the notion that the FCS lending was beneficial to farmers. The evidence also supports the segmentation hypothesis of rural financial markets. The financial reports data for 1991-2010 are from the ACAs and FLCAs aggregated on the regional level because there is no clear way to classify FCS lending to a more disaggregate level like the state. The authors also assemble and analyze a state-level data set that contains state-level balance sheet data for the period 1991-2003. Originality/value The authors are not aware of another work that directly links (real estate and non-real estate) credit by FCS institutions to agricultural output and farm incomes.

Economic assets and financial performance of Italian wine companies

2019 ◽  
Vol 32 (3) ◽  
pp. 325-352
Author(s):  
Guido Migliaccio ◽  
Luigi Tucci
Keyword(s):  
Financial Analysis ◽  
Average Rate ◽  
Balance Sheet ◽  
Well Being ◽  
Financial Economic ◽  
Third Party ◽  
Content Type ◽  
Balance Sheets ◽  
Italian Wine ◽  
Economic Assets

Purpose This study aims to investigate, by means of a balance sheet analysis, the equilibrium and capital, financial, economic and income dynamics of Italian wine producers, during and after the international economic crisis (2008-2017). Therefore, three research questions arise: What was the evolution of the main financial indicators and margins? Did the companies that survived the crisis increased their profitability? Have these companies changed their financial and economic balance sheets? Design/methodology/approach It was analyzed the balance sheets of a medium–large companies sample. The study describes the evolution of three income indices (return on equity compared to the average interest rate on government bonds, return on investment compared to the average rate on loans, return on sales), three asset margins (structural margin, net working capital and treasury margin) and four financial ratios (acid ratio, current ratio, leverage and index of financial dependence). The results were graphically represented, also with the use of interpolation curves. Findings After the crisis, the sector shows increasing profitability. However, from the balance sheet analysis and the trend of the financial indices, there is a strong imbalance and excessive levels of stocks. Furthermore, the debt situation is excessive: the predominant presence of third-party financing would require enormous recapitalizations and probably an increase in self-financing, which is possible thanks to the constantly growing profitability. Research limitations/implications The study takes into consideration only the companies that survived the crisis, therefore, presumably the stronger ones. Moreover, more ratios should be considered to have a more complete picture. It is a uniquely quantitative study based exclusively on the balance sheets data that neglect other important economic factors. Practical implications Public policies could use this study for better intervention decisions in support of agricultural and agro-industrial activities. Credit policy above all should consider the results of this research, requesting urgent consideration of possible capitalization warranting the access to regulated financial markets. Besides, internal management may compare company outcomes with average sector outcomes to identify improvement prospects. These kinds of studies are advisable for education and training. Social implications The careful economic and financial analysis of the sector favors the relaunching strategies of the Italian wineries in which many employees work. Supporting companies favors employment, constant incomes for workers’ families along the entire supply chain, from the production of grapes to consumption. A solid sector guarantees development and social and economic well-being. Originality/value The study contributes to the literature by providing a quantitative method of analysis of the sector, through the comparative information taken from the balance sheets. Therefore, it expands managerial and accounting knowledge on an important sector for the Italian and world economy.

Horse Vet, LLC: Transaction Analysis and Statement of Cash Flows Preparation (Option 1)

2017 ◽  
pp. 1-12
Author(s):  
Mark E. Haskins
Keyword(s):  
Financial Reporting ◽  
Balance Sheet ◽  
Financial Statements ◽  
Cash Flows ◽  
Financial Statement ◽  
Balance Sheets ◽  
Income Statement ◽  
Transaction Analysis ◽  
Business Events ◽  
Statement Of Cash Flows

This case pertains to the foundational underpinnings of the accounting process and the statement of cash flows. In Part I, students are presented with 23 business events that they must evaluate for recording in the financial records. Part II requires students to prepare a 2012 statement of cash flows using the information presented in the company's 2011 and 2012 year-end balance sheets along with its 2012 income statement. In Part III, students must rely on a 2011 balance sheet and a 2011 statement of cash flows to work backward to derive the 2010 year-end balance sheet. There are two versions of this case: Option 1 and Option 2. The Option 2 case is a bit more challenging than the Option 1 case. Instructors should use Option 2 if they feel students are well grounded in their understanding of financial statement relationships and the customary financial reporting of a typical set of business events. Both cases reinforce students' learning related to the accounting process and the connectivity between the financial statements. Please note that only one version of the case should be used due to the existence of some overlap between the two.

Dog Concierges, LLC: Transaction Analysis and Statement of Cash Flows Preparation

2017 ◽  
pp. 1-9
Author(s):  
Mark E. Haskins
Keyword(s):  
Balance Sheet ◽  
Financial Statements ◽  
Cash Flows ◽  
Balance Sheets ◽  
Income Statement ◽  
Transaction Analysis ◽  
Business Events ◽  
Statement Of Cash Flows

This case is appropriate in a MBA module for the accounting process and is also an excellent exam case. It provides a diagram of the three basic financial statements (balance sheet, income statement, and statement of cash flows) used to capture, codify, and communicate the effects of a series of typical business events. The case also gives students the opportunity to prepare a simple statement of cash flows using two sequential balance sheets and to work backward from a balance sheet and statement of cash flows to craft the beginning of the year's balance sheet.

The relationship between managerial entrenchment and accounting conservatism

2021 ◽  
Vol 19 (5) ◽  
pp. 612-631
Author(s):  
Mahdi Salehi ◽  
Ebrahim Ghanbari ◽  
Saleh Orfizadeh
Keyword(s):  
Corporate Governance ◽  
Fixed Effects ◽  
Balance Sheet ◽  
Accounting Conservatism ◽  
Content Type ◽  
Managerial Entrenchment ◽  
Conservative Accounting ◽  
Income Statement ◽  
Study Results ◽  
The Relationship

Purpose This study aims to assess the relationship between managerial entrenchment and accounting conservatism in Iran. Design/methodology/approach To test hypotheses, all listed companies on the Tehran Stock Exchange during 2013–2018 (six years) that qualified were selected. Given the defined limitations of the study, a total of 120 firms with 720 year-observations was selected. After collecting data and figures, they were analyzed using EViews software. Having presented the inferential model tests, the panel data with fixed effects model is chosen. Findings The study results indicate a positive and significant relationship between managerial entrenchment and unconditional conservatism presented in the income statement. Moreover, the authors find a meaningful relationship between managerial entrenchment and unconditional conservatism about the balance sheet. Practical implications Managers will be more aware of the positive consequences of employment optimal corporate governance such as conservative accounting. Such corporate governance is likely to serve their interest in the long run by providing positive signals to the equity owners and board of directors. Originality/value By assessing conservatism’s literature in Iran, we observe many studies on this concept. Still, no investigation is carried out on the relationship between conservatism in accounting and managerial entrenchment. The present study is innovative because it evaluates the relationship between managerial entrenchment and two types of conservatism, namely, balance sheet and income statement conservatism, which have never been investigated by prior studies, notably in emerging markets.

scholarly journals Detecting fraud in Chinese listed company balance sheets

2017 ◽  
Vol 29 (3) ◽  
pp. 356-379 ◽  
Author(s):  
Yi Wei ◽  
Jianguo Chen ◽  
Carolyn Wirth
Keyword(s):  
Listed Company ◽  
Balance Sheet ◽  
Financial Statements ◽  
Common Source ◽  
Content Type ◽  
Balance Sheets ◽  
Cast Doubt ◽  
Chinese Auditors ◽  
Fraud Prediction ◽  
Fraudulent Financial Statements

Purpose This paper aims to investigate the links between accounting values in Chinese listed companies’ balance sheets and the exposure of their fraudulent activities. Design/methodology/approach Every balance sheet account is proposed to be a potential vehicle to manipulate financial statements. Findings Other receivables, inventories, prepaid expenses, employee benefits payables and long-term payables are important indicators of fraudulent financial statements. These results confirm that asset account manipulation is frequently carried out and cast doubt on earlier conclusions by researchers that inflation of liabilities is the most common source of financial statement manipulation. Originality/value Previous practices of solely scaling balance sheet values by assets are revealed to produce spurious relationships, while scaling by both assets and sales effectively detects fraudulent financial statements and provides a useful fraud prediction tool for Chinese auditors, regulators and investors.

Revisiting estimation methods of business zakat and related tax incentives

2016 ◽  
Vol 7 (4) ◽  
pp. 349-364 ◽  
Author(s):  
Mohammed Obaidullah
Keyword(s):  
Balance Sheet ◽  
Alternative Methods ◽  
Estimation Methods ◽  
Economic Rationality ◽  
Business Organizations ◽  
Tax Reforms ◽  
Policy Makers ◽  
Content Type ◽  
Income Statement ◽  
Tax Benefits

Purpose Available zakat accounting standards as well as the laws governing business zakat suggest that the adjusted net working capital or the adjusted growth capital of a business may be regarded as the base for computation of its zakat liability. The apparent consensus follows from the fiqhi prescription of imposing zakat on urud al-tijarah or the inventory of goods available for trade. Some contemporary scholars however question the rationale underlying this method and argue that the objectives of the Shariah are better met by seeking recourse to alternative methods of zakat determination for business organizations. There is therefore a need to revisit the issues and subject them to fresh scrutiny in terms of economic rationality and consistency. Design/methodology/approach The paper examines the arguments of the “orthodox” school as well as those of some contemporary scholars on alternative methods of computing business zakat. It also undertakes a comprehensive review of the laws of zakat as they are related to businesses and the related accounting pronouncements along with their underlying rationale. As the issue of incentivizing zakat payment is an important one, and it is often linked to provision of tax benefits, the paper examines a few suggestions in this regard. Findings On examination of specific suggestions – specifically, of treating earnings as zakat base – to scrutiny in terms of economic rationality and consistency, the authors argue that the “orthodox” position is not only consistent but also makes enormous economic sense. Further, the issue of incentivizing zakat payment and that of lack of harmonization between business zakat accounting and taxation need not be and should not be resolved by making changes in the former because the same has a sound Shariah basis. It can be easily resolved, if need be, by making changes in methods of taxation (tax deduction or tax rebate) and base them on specific items in the balance sheet or the income statement. Practical implications The paper provides useful insights to policy makers who are concerned about the huge gap between actual and potential collection of zakat and are considering tax reforms for incentivizing business zakat mobilization. It highlights the diversity in practices relating to zakat computation and related taxation across Muslim countries. Originality/value The paper searches for and observes consistency and compatibility between the orthodox Shariah-legal position and several accounting and taxation-related policies relating to business zakat. The policy prescriptions are expected to rejuvenate and strengthen the global zakat sector.

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