How Is Gross Profit Margin Overestimated in China?

At present, the index of gross profit margin is overestimated in China. However, this problem has not attracted enough attention. This paper explores the theoretical limitations of the current revenue that lead to the overestimation of the gross profit margin. Then, we present the concept of revenue to correct the limitations of the current revenue. Moreover, we test the impact on the information content of gross profit margin under revenue caliber. The findings are as follows: (1) The current revenue includes some unrealized items such as in-price tax, so it is not completely consistent with the definition of revenue from the perspective of accounting, which will lead to the overestimation of gross profit margin. Therefore, the current revenue should exclude the in-price tax, bad debt loss, and cash discount in order to obtain the revenue. The gross profit margin based on the revenue can reflect the profitability of the company’s basic business more objectively. (2) The empirical test shows that the gross profit margin based on the revenue has higher information content compared with the gross profit margin based on the current revenue. (3) The current gross profit margin is overestimated by 1.36 percentage points because of the limitations of the current revenue.

The Effect of Perceived Value on Customer Retention with Trust as Mediation Variable in Company X

This research was conducted to determine the effect of perceived value on trust, the purposes are to know the effect of perceived value on customer retention, to know the effect of trust on customer retention, to know the role of trust as mediator in the relationship between perceived value on customer retention in Company X family business which moved as distributor basic needs. Research data collection was distributed to 68 respondents of Company X B2B customer who regularly purchase on 2020. Analysis method for this research used Partial Least Square Structural Equation Modeling (SEM PLS) with smart PLS 3.0 program. The results of the analysis in this study are perceived value have a positive relationship and significant effect on trust; perceived value doesn’t have significant effect on customer retention in Company X; trust has a positive and significant effect on customer retention in Company X; Trust fully mediates perceived value to customer retention in Company X. Managerial implications based on the results are creating more services and educate customer about service offer compared with competitors, improving service with implementing computerize system to decrease error, employee training, and proposing program such as cash discount or bonus product to maintain customer retention.

Retailer’s Operational Decision Based on EOQ Model with Upstream Flexible Two-Part Trade Credit and Downstream Partial Trade Credit

Flexible two-part trade credit is widely used in supply chain, however, there is scant research about inventory management engaged in flexible two-part trade credit strategy. This paper bridges this gap and studies a new two-level trade credit based on an EOQ model in which the supplier provides flexible two-part trade credit to the retailer and the retailer provides partial trade credit to its customer. We adopt a convex optimization method to obtain retailer’s optimal operational decision (i.e., the optimal ordering cycle, the optimal fraction of purchase cost that paid in advance, and the optimal credit period for its downstream customer). Moreover, we design a numerical algorithm to solve this model computationally. We find that: (1) the retailer is not sensitive to small cash discount provided by the supplier; (2) the length of credit period in flexible two-part trade credit strategy will affect the customer and retailer: the shorter one influences the retailer’s behavior, but not the customer’s; the longer one influences the customer’s behavior, but not the retailer’s; (3) the retailer can control its risk through partial trade credit.

An inventory model for deteriorating items with imperfect quality under advance payment policy

In the business world, it is generally observed that the supplier gives cash discount due to advance payment. The buyer may either pay off the total purchase cost or a fraction of the total purchase cost before receiving the products. If the buyer makes full payment then he receives a cash discount instantly. If the buyer pays a fraction of the total purchase cost, then (s)he receives the cash discount while paying the remaining amount at the time of receiving the lot. Moreover, in most of the inventory models, it is generally assumed that the delivered lot contains only perfect items. But in reality, presence of imperfect items in the received lot cannot be overlooked as it will affect total profit of the system. Thus, the study of inventory models considering the presence of imperfect items in the lot makes the model more realistic and, it has received much attention from inventory managers. This paper develops a model that jointly considers imperfect quality items and the concept of advance payment scheme (full and partial). The objective is to determine optimal ordering quantity in order to maximise the total profit of the system. The necessary theoretical results showing the existence of global maximum is derived. The model is illustrated with the help of numerical examples, and sensitivity analysis is carried out on some important system parameters to see the effects on the total profit of the system. The study shows that full advance payment scheme is beneficial for the buyer.

Comportamento financeiro do estudante: avaliação da propensão ao endividamento

O objetivo do estudo foi identificar o comportamento financeiro dos estudantes de uma universidade no noroeste do estado do Rio Grande do Sul, avaliando as principais razões das dívidas das pessoas, aplicando uma survey com 160 alunos do curso de administração. Foram utilizadas técnicas de média aritmética e testes de diferença de média. As diferenças de média apontaram diferentes significados de propensão ao endividamento por gênero, idade, estado civil, filhos e renda. Os resultados mostraram-se significativos referentes ao perfil pela dívida por falta de planejamento, alta propensão ao consumo, falta de desconto à vista, empréstimo do nome e por acesso ao crédito. Os procedimentos apontaram que os respondentes gastam menos ou igual à renda que recebem, possuem dívidas, porém, não estão atrasadas e são mais cautelosos ao investir, uma vez que não desejam assumir riscos.Palavras-Chave: Endividamento. Estudantes. Dívidas. Propensão. Administração.Student's financial behavior: assessment of the property to the debtABSTRACTThe objective of this study was to identify the financial behavior of students from a university in the northwest of Rio Grande do Sul state, evaluating the main reasons for the debts of the people, applying a survey with 160 students of the administration course. Arithmetic mean and difference mean tests were used. The differences in the mean showed different meanings of debt propensity by gender, age, marital status, children and income. The results were significant in relation to the debt profile due to lack of planning, high propensity to consumption, lack of cash discount, name loan and access to credit. The procedures indicated that respondents spend less than or equal to the income they receive, have debt, but are not late and are more cautious when investing, as they do not want to take risks.Keywords: Indebtedness. Students. Debts. Propensity. Administration.