The application of financial ratios in analysing nonprofit organisations

Historically ratios have been used to assess the financial standing of profit organisations. It would be expected the role which such ratios play in analysing nonprofit organisations would be considerably different due to the lack of profit motive. Many traditional ratios are based on profitability as a benchmark. The nonprofit sector plays an important role in society yet to date there has been no research carried out on financial statement analysis for nonprofit organisations in Australia. This paper examines ratios of a group of nonprofit organisations and assesses the applicability of the traditional profit-based ratios to nonprofit organisations. Financial statements of a sample of charities registered in Queensland are analysed. The traditional profitability, liquidity and financial stability ratios are analysed and calculated wherever practicable and compared to the typical benchmarks used in profit analysis.

The impact of contractor’s characteristics in gauging level satisfaction

The outcomes of the construction projects can be evaluated in numerous ways. One method is to measure the satisfaction of participants as represented by the differences between their expectations and perceptions. This measurement is used widely in construction as it promises benefits, such as the improvement of product delivery, and enhances services quality by identifying some necessary changes. Commonly satisfaction measurement is gauged by evaluating the level of client satisfaction of construction performance. The measurement of customer satisfaction on the other hand, is based on the quality of the end product. This evaluation is used to encourage contractors to improve their performance to a required level and to ensure that the projects are delivered as expected- in terms of time, budget and quality. Several studies of performance measurement have indicated that contractor performance is still not satisfactory, as the outcome delivered is not as required (because of cost overruns, time overruns or because it is generally unsatisfactory). This drawback may be due to the contractors’ lack of expertise, motivation and/or satisfaction. The measurement of performance based on contractor satisfaction levels is still new and very few studies have yet taken place in the construction industry. This paper examines how the characteristics of a contracting organisation – namely its experience in the industry, background, past performance, size of organisation and financial stability- may influence its satisfaction levels with regards to project performance. Previous literature reviews and interviews are used as research tools in the preliminary investigation. The outcome is expected to present a basic understanding of contractor satisfaction measurement and its potential for improving the performance of project outcomes.

Unintended consequences of regulatory reporting requirements for small and medium size construction entities : Australian evidence

The Queensland Building Services Authority (QBSA) regulates the construction industry in Queensland, Australia, with licensing requirements creating differential financial reporting obligations, depending on firm size. Economic theories of regulation and behaviour provide a framework for investigating effects of the financial constraints and financial reporting requirements imposed by QBSA licensing. Data are analysed for all small and medium construction entities operating in Queensland between 2001 and 2006. Findings suggesting that construction licensees are categorizing themselves as smaller to avoid the more onerous and costly financial reporting of higher licensee categories are consistent with US findings from the 2002 Sarbanes-Oxley (SOX) regulation which created incentives for small firms to stay small to avoid the costs of compliance with more onerous financial reporting requirements. Such behaviour can have the undesirable economic consequences of adversely affecting employment, investment, wealth creation and financial stability. Insights and implications from the analysed QBSA processes are important for future policy reform and design, and useful to be considered where similar regulatory approaches are planned.

Private equity bids in Australia : an exploratory study

In this study, we provide an insight into how private equity players choose their targets and the bid arrangements they prefer. We test our expectations of the unique features of private equity targets using a sample of 23 listed private equity target firms during 2001–2007. We find, relative to a benchmark sample of 81 corporate targets matched by year and industry, the private equity target firms to be larger, more profitable, use their assets more efficiently, more highly levered and have greater cash flow. Multivariate testing indicates that private equity targets have relatively greater financial slack, greater financial stability, greater free cash flow and lower measurable growth prospects. All conclusions are found to be robust to a control sample of 502 takeover bids during 2001–2007.

Not-for-profit ratios for financial resilience and internal accountability : a study of Australian international aid organisations

Not-for-profit (NFP) financial ratio research has focused primarily on organisational efficiency measurements for external stakeholders. Ratios that also capture information about stability, capacity (liquidity), gearing and sustainability, enable an assessment of financial resilience. They are thus valuable tools that can provide a framework of internal accountability between boards and management. The establishment of an Australian NFP regulator highlights the importance of NFP sustainability, and affirms the timeliness of this paper. We propose a suite of key financial ratios for use by NFP boards and management, and demonstrate its practical usefulness by applying the ratios to financial data from the 2009 reports of ACFID (Australian Council for International Development)-affiliated international aid organisations.

Financial Markets, Institutions and Money [3rd ed.]

"The financial system is a key influencer of the health and efficiency of an economy. The role of the financial system is to gather money from people and businesses that currently have more money than they need and transfer it to those that can use it for either business or consumer expenditures. This flow of funds through financial markets and institutions in the Australian economy is huge (in the billions of dollars), affecting business profits, the rate of inflation, interest rates and the production of goods and services. In general, the larger the flow of funds and the more efficient the financial system, the greater the economic output and welfare in the economy. It is not possible to have a modern, complex economy such as that in Australia, without an efficient and sound financial system. The global financial crisis (GFC) of late 2007–09 (and the ensuing European debt crisis), where the global financial market was on the brink of collapse with only significant government intervention stopping a catastrophic global failure of the market, illustrated the importance of the financial system. Financial Markets, Institutions and Money 3rd edition introduces students to the financial system, its operations, and participants. The text offers a fresh, succinct analysis of the financial markets and discusses how the many participants in the financial system interrelate. This includes coverage of regulators, regulations and the role of the Reserve Bank of Australia, that ensure the system’s smooth running, which is essential to a modern economy. The text has been significantly revised to take into account changes in the financial world."---publisher website Table of Contents 1. The financial system - an overview 2. The Monetary Authorities 3. The Reserve Bank of Australia and interest rates 4. The level of interest rates 5. Mathematics of finance 6. Bond Prices and interest rate risk 7. The Structure of Interest Rates 8. Money Markets 9. Bond Markets 10. Equity Markets

Impulse facility simulation of hypervelocity radiating flows

We describe the X-series impulse facilities at The University of Queensland and show that they can produce useful high speed flows of relevance to the study of high temperature radiating flow flields characteristic of atmospheric entry. Two modes of operation are discussed: (a) the expansion tube mode which is useful for subscale aerodynamic testing of vehicles and (b) the non-reflected shock tube mode which can be used to emulate the nonequilibrium radiating region immediately following the bow shock of a flight vehicle.

Convergence in European corporate governance : the audit committee concept

This paper analyses recent corporate governance codes issued by 20 countries for evidence of convergence in corporate governance systems in Europe. The analysis shows that there has been a degree of convergence towards an Anglo-Saxon model of corporate governance as the audit committee concept is widely accepted in countries with both unitary and two-tier governance systems. Further, the latest audit committee recommendations in countries that have issued several governance codes show a strengthening of the recommendations for an audit committee over time in line with the Anglo-Saxon audit committee concept and convergence with the debate in the US and UK on issues such as the independence and financial expertise of members. However, consistent with the literature on the convergence of European corporate governance systems, at an operational level there is limited consistency in the recommended structure and role of audit committees.

A framework for people capability enhancement to support sustainable facility management practices

Spanning over a considerable length of time, facility management is a key phase in the development cycle of built assets. Therefore facility managers are in a commanding position to maximise the potential of sustainability through the operation, maintenance and upgrade of built facilities leading to decommission and deconstruction. Sustainability endeavours in facility management practices will not only contribute to reducing energy consumption, waste and running costs, but also help improve organisational productivity, financial returns and community standing of the organisation. At the forefront facing sustainability challenge, facility manager should be empowered with the necessary knowledge and capabilities. However, literature studies show a gap between the current level of awareness and the specific knowledge and necessary skills required to pursue sustainability in the profession. People capability is considered as the key enabler in managing the sustainability agenda as well as being central to the improvement of competency and innovation in an organization. This paper aims to identify the critical factors for enhancing people capabilities in promoting the sustainability agenda in facility management practices. Starting with a total of 60 factors identified through literature review, the authors conducted a questionnaire survey to assess the perceived importance of these factors. The findings reveal 23 critical factors as significantly important. They form the basis of a mechanism framework developed to equip facility managers with the right knowledge, to continue education and training and to develop new mind-sets to enhance the implementation of sustainability measures in FM practices.

Interdependence between Greece and other European stock markets: A comparison of wavelet and VMD copula, and the portfolio implications

The interdependence of Greece and other European stock markets and the subsequent portfolio implications are examined in wavelet and variational mode decomposition domain. In applying the decomposition techniques, we analyze the structural properties of data and distinguish between short and long term dynamics of stock market returns. First, the GARCH-type models are fitted to obtain the standardized residuals. Next, different copula functions are evaluated, and based on the conventional information criteria and time varying parameter, Joe-Clayton copula is chosen to model the tail dependence between the stock markets. The short-run lower tail dependence time paths show a sudden increase in comovement during the global financial crises. The results of the long-run dependence suggest that European stock markets have higher interdependence with Greece stock market. Individual country’s Value at Risk (VaR) separates the countries into two distinct groups. Finally, the two-asset portfolio VaR measures provide potential markets for Greece stock market investment diversification.