A note on trader Sharpe Ratios

Traders in the financial world are assessed by the amount of money they make and, increasingly, by the amount of money they make per unit of risk taken, a measure known as the Sharpe Ratio. Little is known about the average Sharpe Ratio among traders, but the Efficient Market Hypothesis suggests that traders, like asset managers, should not outperform the broad market. Here we report the findings of a study conducted in the City of London which shows that a population of experienced traders attain Sharpe Ratios significantly higher than the broad market. To explain this anomaly we examine a surrogate marker of prenatal androgen exposure, the second-to-fourth finger length ratio (2D:4D), which has previously been identified as predicting a trader's long term profitability. We find that it predicts the amount of risk taken by traders but not their Sharpe Ratios. We do, however, find that the traders' Sharpe Ratios increase markedly with the number of years they have traded, a result suggesting that learning plays a role in increasing the returns of traders. Our findings present anomalous data for the Efficient Markets Hypothesis.

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.

Synthesis and Raman spectroscopic study of Mg/Al,Fe hydrotalcites with variable cationic ratios

Hydrotalcites of formula Mg6 (Fe,Al)2(OH)16(CO3).4H2O formed by intercalation with the carbonate anion as a function of divalent/trivalent cationic ratio have been successfully synthesised. The XRD patterns show variation in the d-spacing attributed to the size of the cation. Raman and infrared bands in the OH stretching region are assigned to (a) brucite layer OH stretching vibrations (b) water stretching bands and (c) water strongly hydrogen bonded to the carbonate anion. Multiple (CO3)2- symmetric stretching bands suggest that different types of (CO3)2- exist in the hydrotalcite interlayer. Increasing the cation ratio (Mg/Al,Fe) resulted in an increase in the combined intensity of the 2 Raman bands at around 3600 cm-1, attributed to Mg-OH stretching modes, and a shift of the overall band profile to higher wavenumbers. These observations are believed to be a result of the increase in magnesium in the structure. Raman spectroscopy shows a reduction in the symmetry of the carbonate, leading to the conclusion that the anions are bonded to the brucite-like hydroxyl surface and to the water in the interlayer. Water bending modes are identified in the infrared spectra at positions greater than 1630 cm-1, indicating the water is strongly hydrogen bonded to both the interlayer anions and the brucite-like surface.

Real estate agency practice and profitability : an analysis of house sales and agency profitability in Sydney

Large cities provide a broad range of residential property types, as well as a range of socio-economic locations. This results in a significant variation in residential property prices across both the city itself and the individual suburbs. The only constant across such a diverse range of residential property is the need for the majority of residential property owners to employ the services of a real estate agent to sell their property or to purchase a residential property. This paper will analyse the Sydney residential property market over the period 1994 to 2002 to determine the change in real estate offices numbers over the period, the profitability of real estate agency offices based on the residential house price performance of houses and units in these specific locations and the extent of changing residential house prices on agency profitability. Suburbs have been selected to provide a full range of housing types, socio-economic areas, older established and developing residential suburbs and location from the

The growth-profitability relationship : strategic orientations as moderator

Principal Topic: In this study we investigate how strategic orientation moderates the impact of growth on profitability for a sample of Danish high growth (Gazelle) firms. ---------- Firm growth has been an essential part of both management research and entrepreneurship research for decades (e.g. Penrose 1959, Birch 1987, Storey 1994). From a societal point of view, firm growth has been perceived as economic generator and job creator. In entrepreneurship research, growth has been an important part of the field (Davidsson, Delmar and Wiklund 2006), and many have used growth as a measure of success. In strategic management, growth has been seen as an approach to achieve competitive advantages and a way of becoming increasing profitable (e.g. Russo and Fouts 1997, Cho and Pucic 2005). However, although firm growth used to be perceived as a natural pathway to profitability recently more skepticism has emerged due to both new theoretical development and new empirical insights. Empirically, studies show inconsistent and inconclusive empirical evidence regarding the impact of growth on profitability. Our review reveals that some studies find a substantial positive relationship, some find a weak positive relationship, some find no relationship and further some find a negative relationship. Overall, two dominant yet divergent theoretical positions can be identified. The first position, mainly focusing on the environmental fit, argues that firms are likely to become more profitable if they enter a market quickly and on a larger scale due to first mover advantages and economic of scale. The second position, mainly focusing the internal fit, argues that growth may lead to a range of internal challenges and difficulties, including rapid change in structure, reward systems, decision making, communication and management style. The inconsistent empirical results together with two divergent theoretical positions call for further investigations into the circumstances by which growth generate profitability and into the circumstances by which growth do not generate profitability. In this project, we investigate how strategic orientations influence the impact of growth on profitability by asking the following research question: How is the impact of growth on profitability moderated by strategic orientation? Based on a literature review of how growth impacts profitability in areas such as entrepreneurship, strategic management and strategic entrepreneurship we develop three hypotheses regarding the growth-profitability relationship and strategic orientation as a potential moderator. ---------- Methodology/Key Propositions: The three hypotheses are tested on data collected in 2008. All firms in Denmark, including all listed and non-listed (VAT-registered) firms who experienced a 100 % growth and had a positive sales or gross profit over a four years period (2004-2007) were surveyed. In total 2,475 fulfilled the requirements. Among those 1,107 firms returned usable questionnaires satisfactory giving us a response rate on 45 %. The financial data together with data on number of employees were obtained from D&B (previously Dun & Bradstreet). The remaining data were obtained through the survey. Hierarchical regression models with ROA (return on assets) as the dependent variable were used to test the hypotheses. In the first model control variables including region, industry, firm age, CEO age, CEO gender, CEO education and number of employees were entered. In the second model, growth measured as growth in employees was entered. Then strategic orientation (differentiation, cost leadership, focus differentiation and focus cost leadership) and then interaction effects of strategic orientation and growth were entered in the model. ---------- Results and Implications: The results show a positive impact of firm growth on profitability and further that this impact is moderated by strategic orientation. Specifically, it was found that growth has a larger impact on profitability when firms do not pursue a focus strategy including both focus differentiation and focus cost leadership. Our preliminary interpretation of the results suggests that the value of growth depends on the circumstances and more specifically 'how much is left to fight for'. It seems like those firms who target towards a narrow segment are less likely to gain value of growth. The remaining market shares to fight for to these firms are not large enough to compensate for the cost of growing. Based on our findings, it therefore seems like growth has a more positive relationship with profitability for those who approach a broad market segment. Furthermore we argue that firms pursuing af Focus strategy will have more specialized assets that decreases the possibilities of further profitable expansion. For firms, CEOs, board of directors etc., the study shows that high growth is not necessarily something worth aiming for. It is a trade-off between the cost of growing and the value of growing. For many firms, there might be better ways of generating profitability in the long run. It depends on the strategic orientation of the firm. For advisors and consultants, the conditional value of growth implies that in-depth knowledge on their clients' situation is necessary before any advice can be given. And finally, for policy makers, it means they have to be careful when initiating new policies to promote firm growth. They need to take into consideration firm strategy and industry conditions.

Vatkst, profit og strategisk orienteering i gazellevirksomheder (Growth, profitability and strategic orientation among gazelle firms)

Growth and profitability are often essential parts of the overall managerial goals of firms. High growth can be seen as an indicator of success and as a mean for achieving competitive advantage and higher profitability. But high growth can also lead to a number of managerial and organisational challenges, that may affect the profitability negatively. The aim of this article is to analyse the relationship between growth and profitability for Danish gazelle firms, and furthermore to investigate how the strategic orientation of the firm affects this relationship. Our study finds a clear positive relationship between growth and profitability among gazelle firms pursuing a broad market strategy. A managerial implication of this is that the growth strategy should be clearly integrated with the general strategic orientation of the firm.

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.

Effect of outdoor site location on calculated I/O ratios

Motor vehicle emissions have been identified as one of the major contributors of fine and ultrafine particles (UFP) in urban areas. Schools located near major roads could potentially be exposed to high levels of UPFs and school classroom is an important microenvironment where significant exposure to UFPs is likely to occur. Most of the research conducted to date has investigated the relationship between indoor and outdoor particle number concentration (PNC) in schools based on one outdoor location, which may introduce a level of error when calculating the variation of total UPFs, and can result in the underestimation or overestimation of indoor to outdoor (I/O) ratio values.

Influence of filtration on I/O particle concentration ratios at urban office buildings

Epidemiological research has consistently shown an association between fine and ultrafine particle concentrations, and increases in both respiratory and cardiovascular morbidity and mortality. These particles, often found in vehicle emissions outside buildings, can penetrate inside via their envelopes and mechanically ventilated systems. Indoor activities such as printing, cooking and cleaning, as well as the movement of building occupants are also an additional source of these particles. In this context, the filtration systems of mechanically ventilated buildings can reduce indoor particle concentrations. Several studies have quantified the efficiency of dry-media and electrostatic filters, but they mainly focused on the particle size range > 300 nm. Some others studied ultrafine particles but their investigations were conducted in laboratories. At this point, there is still only limited information on in situ filter efficiency and an incomplete understanding of filtration influence on I/O ratios of particle concentrations. To help address these gaps in knowledge and provide new information for the selection of appropriate filter types in office building HVAC systems, we aimed to: (1) measure particle concentrations at up and down stream flows of filter devices, as well as outdoor and indoor office buildings; (2) quantify efficiency of different filter types at different buildings; and (3) assess the impact of these filters on I/O ratios at different indoor and outdoor source operation scenarios.

Using staffing ratios for workforce planning : evidence on nine allied health professions - a narrative review

Background: Modern healthcare managers are faced with pressure to deliver effective, efficient services within the context of fixed budget constraints. This requires decisions regarding the skill mix of the workforce particularly when staffing new services. One measure used to identify numbers and mix of staff in healthcare settings is workforce ratio. The aim of this study was to identify workforce ratios in nine allied health professions and to identify whether these measures are useful for planning allied health workforce requirements. Method: A systematic literature search using relevant MeSH headings of business, medical and allied health databases and relevant grey literature for the period 2000-2008 was undertaken. Results: Twelve articles were identified which described the use of workforce ratios in allied health services. Only one of these was a staffing ratio linked to clinical outcomes. The most comprehensive measures were identified in rehabilitation medicine. Conclusions: The evidence for use of staffing ratios for allied health practitioners is scarce and lags behind the fields of nursing and medicine.