Thesis (MBA)--Stellenbosch University, 2015. / ENGLISH ABSTRACT: When it comes to risk management, academic opinion is divided into two camps. There are those who argue that risk management is a waste of resources and time, and that in spite of all the effort invested, it does not add any economic value to an organisation. On the other hand, there are those who believe that risk management not only safeguards, but also actively contributes to the value of an organisation. This study was an attempt to obtain empirical evidence from the South African sector to support one of the two abovementioned arguments. In doing so the study addresses the research problems of whether risk management and specifically Enterprise Risk Management, creates value for an organisation, and whether the fact that a company has a risk management program in place should influence investor decisions The study was conducted in the following way: Measurements of the maturity of the risk management systems and the implementation dates of these systems were obtained from the senior managers of a number of organisations by means of a questionnaire. This data was then compared with annual measurements of the value of these organisations that were taken between 2000 and 2013. To determine if there was a relationship between the value of an organisation and the risk management maturity tests were conducted to look for the following: i. A statistically significant relationship between the most recent measure of organisational value and the maturity of risk management. ii. A statistically significant relationship between risk management maturity and the most recent rate of organisational value increase. iii. A discernible difference between the rate of organisational value change before and after the implementation of an Enterprise Risk Management system. iv. A statistically significant relationship between risk management maturity and organisational value subsequent to the introduction of an Enterprise Risk Management system. The study found evidence of a significant gain in the rate of organisational value increase directly subsequent to the introduction of an Enterprise Risk Management system, but also that the increased rate was not sustained. Other tests yielded contradictory or indecisive results that did not lead to clear conclusions, but illuminated future research directions.

This dissertation focuses the corporate behaviors in a dynamic world with uncertainty. Especially, I am interested in how firms tradeoff their investment and cash savings when external financing is costly. The first two chapters fit into this theme. One considers optimal investment and financing policies when uncertainty itself is time-varying, the second investigates how firms prepare themselves against devaluation risks. Both chapters build dynamic corporate theories and test them empirically. The third chapter steps back by asking why aggregate volatility is time-varying and why is it persistent in a dynamic general equilibrium with endogenous growth. I show that endogenous asset allocation between different assets can be the reason. In the first chapter I study how firms manage their cash savings, financing, and investment when aggregate uncertainty is time-varying. I develop and estimate a dynamic model featuring aggregate uncertainty shocks, costly external financing, investment irreversibility, and time-varying risk premia. In my model, firms have a precautionary-savings motive and real options to wait, both of which interact with time-varying uncertainty and are reinforced by state-dependent risk premia. My model confirms previous findings that firms save more in cash and invest less when aggregate uncertainty is high. In addition, I show that in the high uncertainty states, (1) firms with high profitability and low cash are more likely to delay equity issuance, (2) firms with low profitability and high cash are more likely to delay payout, and (3) aggregate equity issuance and payout are both lower. Finally, counterfactual experiments show that (1) a model without dynamic uncertainties cannot explain the observed firm behaviors in high uncertainty states, and (2) time-varying risk premia amplify the impact of the aggregate uncertainty shocks. In the second chapter, I investigate the relationship between investment and cash savings in a special setting: devaluation episodes in emerging markets. Devaluation events are typically anticipated by the economy but affect local firms in the tradable versus nontradable sectors differently. Tradable firms expect higher cash flows but nontradable firms expect lower ones, even their current cash flows are stable because of the currency-pegging. I build a model to show that, investment and cash savings are both complementarity, because of future prospects, and substitution because of limited current cash balance. Before devaluation, tradable firms invest more due to better expectation of the future but have to substitute for a lower cash savings tomorrow. Empirically, I use difference-in-difference approach and two devaluation episodes in Mexico and Argentina to test these predictions. I find strong evidence in Mexico that tradable firms invested more than nontradable firms and save less, as the devaluation was approaching. Evidence in Argentina is not strong. We discuss the potential remedies and future works to do. The final chapter explores asset allocation decisions and endogenous growth volatilities in an economy with endogenous growth. Firms have two produced inputs, capital and technology. When a representative firm optimally allocates the investment between the two inputs, both the consumption growth and its volatility are functions of the economy's technology-to-capital ratio. As a result, not only the long run consumption growth is volatile, but also its volatility is endogenously stochastic. Moreover, after a large negative or positive shock, the economy is away from its optimal allocation. This takes time for the economy to travel back to the optimal allocation because of the convex adjustment costs. As a result, both the consumption growth and its stochastic volatility are persistent. Finally, we discuss the asset pricing implication of the model and show that it microfounds Bansal and Yaron (2004) long-run risk model with time-varying volatilities.

Thesis (MBA.) -- Unversity of Limpopo, 2016 / The researcher using Quantitative process is aimed to appraise Corporate Social Investment (CSI) in relation to Corporate Financial Performance (CFP). This research addressed theoretical paradigms of CSI, leadership strategies applied to implement CSI and stakeholder theory is presented. The study area was Johannesburg Stock Exchange FTSE/JSE Responsible Investment Index. The top 35 recorded companies were chosen, and then from top 35, only 5 companies were used (25 observations). Data from 2011 to 2015 were obtained from audited integrated financial statements, websites, publications and annual reports. CSI indexes and financial presentation measures of companies were taken from the annual reports to be analysed using simple regression equation to examine the link between corporate social investments to company’s fiscal presentation. This study revealed a strong positive linkage among company’s social investment strategy implementation and share price, turnover, and return on equity. Companies that implemented social investment strategy noticed increase in profit because of factors such customer awareness, good firm reputation and competitive advantage.

M.Tech. Business Administration. Business School. / The purpose and scope of the study is defined by the objectives of the study, which are:  To determine the skills level of TUT Programme managers on the financial management system, Integrated Tertiary Software (ITS).  To determine the extent of the use of financial management system (ITS).  To determine to what extend policies and procedures at TUT are complied with by Programme managers.  To determine whether Programme managers understand and can interpret the general ledger content and where and how all the transactions are generated.  To determine the interventions needed to developed and assist Programme managers to improve their management and control of financial activities in their departments and cost centres. A thorough literature study was and quantitative techniques employed. The questionnaire was developed based on the identifying of shortcomings at TUT relating to financial management by programme managers. These areas include the knowledge and ability to use and interpret the financial information system at TUT. Respondents in the survey were programme managers which can be defined as staff members at TUT that has the responsibility to manage and control cost centre (fund allocations) according to the policies and procedures supplied by TUT. All campuses were included in the survey. Respondents in the survey completed the questionnaire where there were several results obtained regarding biographic variables, variable in respect to the ITS General Ledger system, financial training and variables with respect to policies and procedures at TUT. The objectives of the study were attained, and resulted in several recommendations to extend the knowledge, management and control of finances in academic and administrative departments at TUT. Furthermore it was recommended that training sessions on financial management and awareness campaigns regarding policies and procedures should be launched for staff to attend which will enhance reliable financial governance.

For the purposes of this study I have adopted a case study approach, based on a Multinational company in the UK, with business units geographically spread throughout the world, including South Africa. I intend to provide a detailed analysis of all aspects of the Capital Budgeting process. The dissertation will cover the follow ing areas : • The capital appraisal techniques used to evaluate capital projects. • The determination of a cost of capital. • Adjustments to the cost of capital in a multinational context. The approach in this study will be to divide Capital Budgeting into the three specific areas as detailed above, discuss the theory associated with the subject, analyse empirical research on the topic and critically evaluate the findings of the practices at the Multinational chosen for this study. Due to confidentiality reasons I shall refer to the company as "PLC" for the purposes of this study. 1.3. Objectives of the Study The objective of the study is to evaluate the capital investment appraisal process of "PLC", in the light of theoretical and empirical literature on the subject, leading either to suggestions for improvement or acknowledging the merit of the current practice. It is expected that "PLC" utilises sophisticated methods for investment appraisal but does allow room for improvement. / Thesis (MBA)-University of Natal, Durban, 2001.

Economic factors are a major constraint to quality health care in Africa. One of the aims of the Department of Health in South Africa is to increase availability and affordability of medicine. One way of reducing the cost of drugs is by introducing legislation to control the price of drugs and by the promotion of generics (interchangeable multisource medicines which are cheaper copies of the original brand name drug). Protocols for the Prescribed Minimum Benefits (PMBs) for the 27 conditions on the Chronic Disease List as published in the Government Gazette in 2003, were legally binding from 1 January 2004 and these conditions must be covered by all medical schemes. Medication prescribed for these conditions may have one or more generic substitutes and Government has allowed certain measures to be introduced by the medical schemes in order to contain costs. This study investigates the potential savings if generics are extensively used for these chronic conditions. A census was conducted on the 25 chronic diseases for which algorithms are available. The empirical quantitative data collected was calculated to quantify potential costs savings in respect of each algorithm. The major findings show that there are large cost differentials between originator drugs and their generic equivalents (97% in the case of prednisone) and smaller cost differentials between generics themselves (54.6% in the case of formoterol). This study also shows that there is a correlation between the number of generic equivalents an originator drug has and the percentage cost differential. A total of 67.5% of all cost differentials between originator and generics are greater than the Department of Health's proposed 40% benchmark pricing. The results support the recommendations that government needs to implement various measures to encourage increased use of generics in this country and to look at realistic benchmark price controls. / Thesis (M B A)-University of KwaZulu-Natal, 2006.

Small, Medium and Micro Enterprises (SMMEs) make a significant contribution to the South African Economy. Regardless of size, these businesses have the ability to create employment, make a generous contribution to tax collections, uplift communities and serve as a beacon of hope for those trapped in the cycle of poverty and unemployment. However, SMMEs lack access to much-needed financial resources that are critical for their growth. Development Finance Institutions (DFIs) aim to bridge the gap between the SMME’s financial needs and the development of the respective SMME businesses, by providing funding to entrepreneurs with potentially viable businesses and ideas. Debt funding to these SMMEs are based on sound commercial lending principles that take various non-quantitative variables into account. The sustainability of SMMEs is a primary concern to all participants in the economy, as it is known that SMME failure rates are high Therefore, the primary objective of this study was to investigate the impact that the credit risk management practices of DFIs have on the sustainability of SMMEs, by examining a case study of a typical DFI. An electronic questionnaire survey was considered as an appropriate measurement method for this study. The targeted population of the study included SMMEs in the Eastern Cape that are Trust for Urban Housing (TUHF) clients and 23 SMMEs were identified as part of the study sampling frame. A total number of 14 questionnaires were returned out of the 23 targeted SMMEs - giving a response rate of 61%. The quantitative data was processed using the STATISTICA program, leading to appropriate descriptive statistical analyses. In order to better understand the impact of credit risk management practices on the sustainability of SMMEs, a hypothesis was formulated and linear regression analysis was used to establish the statistical significance of certain credit risk principles and sustainability characteristics. The results of the empirical study revealed that credit risk management practises do impact on the sustainability of SMMEs. Further, by testing the hypothesis, it was also revealed that certain sustainability variables are regarded as more important than others.

M.Com. (Business Management) / Statistics have shown that 227 companies and close corporations were liquidated during 1993. In addition 386 private persons, sole proprietors and partnerships were adjudged insolvent. These liquidations and insolvencies came about in all industries. By making use of ratio analysis, management can identify early danger signs and determine the presence of weaknesses in their business. There are some other critical factors and aspects that become evident from everyday trading activities that also point to danger signs. Management should be mindful and become aware of the danger signs at an early stage so that corrective action may be taken during a recessionary period. Numerous management aids in the field of financial discipline are at the disposal of management when applying corrective action. The core principles of effective asset management covering cash flow management, credit control, stock control and asset control should be employed to ensure survival during difficult times. Furthermore it is of critical importance that management makes use of the correct sources of financing and knows where to obtain it. It is also important that management addresses the other functional disciplines within the business. Management should continue the function of marketing and selling its products. Checklists containing useful questions should be applied to generate maximum sales. Production and sales should, however, be synchronised. Effective production management aids should be applied to create this harmony. It is also necessary that products be continually developed and that research into new areas be conducted. Management should handle labour relations and political and legal aspects with great sensitivity during recessionary periods. All employees deserve fair treatment and should be respected for their convictions. Appropriate general management principles should be applied at all times including effective leadership, motivation, communication and company philosophy. By making use of the proposed management aids, management can considerably improve the chances of the undertaking to survive a recession.

This study is aimed at investigating the effect of mergers and acquisitions on the share prices and dividends involving South African companies in the food and beverage industry. A sample of 79 mergers from 1999 to 2005 was used. The data was analysed using the event study methodology and descriptive statistics. In addition, the paired t-test was also conducted to test the significance of the results. The results were presented using graphs, tables and charts. The results showed that target companies obtained negative abnormal returns during the announcement of mergers while acquiring companies on the other hand received positive abnormal returns. The results imply that it can no longer be generalized that target companies always win and acquiring companies lose during the merger activity. On the other hand, the dividends for target companies increased significantly after the merger, while the dividends for acquiring companies remained insignificantly negative after the merger. / Graduate School of Business Leadership / MBL

Thesis (MComm (Business Management))--University of Stellenbosch, 2010. / ENGLISH ABSTRACT: The determinants of capital structure form an important part of the finance profession. Contemporary capital structure theory began in 1958 when Modigliani and Miller indicated that in a perfect capital market, the value of a firm is not influenced by its capital structure. However, when considering, inter alia, the effect of taxes, bankruptcy costs and asymmetric information, the value of a firm could be affected by its leverage. Capital structure theory offers two contrasting capital structure models, namely the trade-off and pecking order models. According to the trade-off model, firms trade-off the costs and benefits of debt financing in order to reach an optimal capital structure. According to this model, a positive relationship exists between leverage and profitability. In contrast, the pecking order model indicates that firms use a financing hierarchy where internal funds are preferred above debt and equity usage. This model indicates a negative relationship between leverage and profitability. However, in practice, firms often deviate from these models to incorporate the benefits of the other model or to adapt to changing circumstances. Firms' financing decisions may be influenced by both firm-specific and economical factors within the country where they are operating. Therefore, a firm's managers should consider the growth rate, interest rate, repo rate, inflation rate, exchange rates and the tax rate when conducting finance decisions, since these factors could influence the cost and availability of capital. In addition, these economical factors often have a significant influence on each other. Prior capital structure research mainly focused on developed countries. However, South Africa provides the ideal environment to consider the effect of economic changes on capital structure within a developing country, due to South Africa's profound economic changes during 1994 and the years to follow. The primary objective of this study was thus to determine whether the capital structures of South African listed industrial firms are influenced by changes in the South African economical environment. The effect of economic changes on capital structure was examined by using a TSCSREG (time-series cross-section regression) procedure. The regression model is based on a model developed by Fan, Titman and Twite (2008). One-period lags were built into the model to make provision for the effect of economic changes that often only occur after some time. The study was conducted on a sample of firms listed on the industrial sector of the Johannesburg Securities Exchange (JSE Ltd) over the period 1989 to 2008. The data, required to calculate the measures, were obtained from the South African Reserve Bank, the South African Revenue Service and the McGregor BFA database. This database contains standardised financial statements for both listed and delisted South African firms. In an attempt to reduce the possible skewing of results due to survivorship bias, both listed and delisted firms were included in the sample. In order to reflect its true nature, data should be available for consecutive years. Therefore, only firms with data available for more than five years were included in the final sample. The resulting sample consisted of 320 firms and 4 172 observations. The sample was also divided into years before and years after 1994, in order to determine the effect of the economic changes during 1994 and the years to follow on the firms' capital structures. The results of this study indicated that some of the economic factors influenced the D/E ratio as well as each other. However, the effect of economic changes often only occurred after a lagged period. A strong relationship was indicated between the tax rate and the repo rate, which influenced the significance of the regression results. Support was found for both the trade-off and the pecking order models. The combined profitability variable ROA-ROE also had a significant effect on the other variables. Based on these results, the claim that economic changes have an impact on capital structure is supported. The effect is often only indicated after a certain period. It also seems that the combination of the two capital structure models have a significant effect on leverage. Firms therefore appear to consider a combination of these models when conducting finance decisions. / AFRIKAANSE OPSOMMING: Die determinante van kapitaalstruktuur speel belangrike rol in die finansiële professie. Hedendaagse kapitaalstruktuurteorie het in 1958 tot stand gekom toe Modigliani en Miller aangedui het dat die waarde van 'n firma in 'n perfekte kapitaalmark nie deur kapitaalstruktuur beïnvloed word nie. Maar, wanneer die uitwerking van onder andere belastings, die koste van bankrotskap en asimmetriese inligting in ag geneem word, kan die waarde van 'n firma deur sy finansiële hefboomwerking beïnvloed word. Kapitaalstruktuurteorie bied twee kontrasterende kapitaalstruktuurmodelle, naamlik die ruilmodel (trade-off model) en rangorde-model (pecking order model). Volgens die ruilmodel vergelyk firmas die kostes en voordele van finansiering met geleende kapitaal totdat 'n optimale kapitaalstruktuur bereik word. Hierdie model dui op die bestaan van 'n positiewe verband tussen hefboomwerking en winsgewendheid. In teenstelling hiermee dui die rangorde-model aan dat firmas 'n finansieringshiërargie gebruik waar interne fondse verkies word bo skuld en ekwiteit. Hierdie model dui 'n negatiewe verband aan tussen hefboomwerking en winsgewendheid. In die praktyk wyk firmas egter dikwels af van hierdie modelle om die voordele van die ander model te inkorporeer of om by veranderende omstandighede aan te pas. Firmas se finansieringsbesluite kan beïnvloed word deur beide firma-spesifieke en ekonomiese faktore in die land waar hulle sake doen. Daarom moet 'n firma se bestuurders die groeikoers, rentekoers, inflasiekoers, wisselkoerse en die belastingkoers oorweeg wanneer hulle finansieringsbesluite neem, aangesien hierdie faktore moontlik die koste en beskikbaarheid van kapitaal kan beïnvloed. Hierdie ekonomiese faktore het dikwels ook 'n belangrike invloed op mekaar. Vroeëre navorsing insake die kapitaalstruktuur het dikwels op ontwikkelde lande gefokus. Suid-Afrika bied egter die ideale omgewing om die uitwerking van ekonomiese veranderinge op kapitaalstruktuur in 'n ontwikkelende land te ondersoek as gevolg van Suid-Afrika se betekenisvolle ekonomiese veranderinge gedurende 1994 en die daaropvolgende jare. Die primêre doelwit van hierdie studie was dus om te bepaal of die kapitaalstruktuur van genoteerde Suid-Afrikaanse nywerheidsondernemings deur veranderinge in die Suid-Afrikaanse ekonomiese omgewing beïnvloed word. Die uitwerking van ekonomiese veranderinge op kapitaalstruktuur is ondersoek deur gebruik te maak van 'n TSCSREG (tydreeks dwarssnit-regressie)-prosedure. Hierdie regressiemodel is gebaseer op 'n model wat deur Fan, Titman en Twite (2008) ontwikkel is. Enkeltydperk-vertragings is in die model ingebou om voorsiening te maak vir die uitwerking van ekonomiese veranderinge wat dikwels eers ná 'n tydperk sigbaar word. Die studie is uitgevoer op 'n steekproef firmas wat gedurende die tydperk 1989 tot 2008 op die nywerheidsektor van die Johannesburgse Sekuriteitebeurs (JSE Ltd) genoteer is. Die nodige data om die metings te bereken is verkry van die Suid-Afrikaanse Reserwebank (SARB), die Suid-Afrikaanse Inkomstediens (SAID) en die McGregor BFA-databasis. Hierdie databasis bevat gestandaardiseerde finansiële state vir beide genoteerde en gedenoteerde Suid-Afrikaanse firmas. In 'n poging om die moontlike skeeftrekking van resultate as gevolg van die oorlewingsneiging te verhoed, is beide genoteerde en gedenoteerde firmas by die steekproef ingesluit. Data moet vir opeenvolgende jare beskikbaar wees om die ware aard daarvan aan te dui. Daarom is slegs firmas met data beskikbaar vir meer as vyf jaar in die finale steekproef ingesluit. Die steekproef het gevolglik 320 firmas en 4 172 waarnemings behels. Die steekproef is ook in jare voor en jare ná 1994 verdeel, om die uitwerking van ekonomiese veranderinge gedurende 1994 en die daaropvolgende jare op firmas se kapitaalstruktuur te bepaal. Die bevindinge van die studie het daarop gedui dat sommige van die ekonomiese faktore die skuld/ekwiteit (D/E)-verhouding, maar ook elkeen van hulle beïnvloed het. Die uitwerking van ekonomiese veranderinge het egter dikwels eers ná 'n vertraagde tydperk sigbaar geword. 'n Sterk verhouding is aangedui tussen die belastingkoers en die repokoers, wat die betekenisvolheid van die regressieresultate beïnvloed het. Ondersteuning is gevind vir beide die ruilmodel en die rangorde-model. Die gekombineerde winsgewendheidsveranderlike ROA-ROE het ook 'n betekenisvolle uitwerking op die ander veranderlikes gehad. Die bewering dat ekonomiese veranderinge 'n impak op die kapitaalstruktuur het, word ondersteun op grond van die bevindinge van hierdie studie. Die uitwerking daarvan word egter dikwels eers ná 'n tydperk sigbaar. Die gekombineerde kapitaalstruktuurmodelle het moontlik 'n betekenisvolle uitwerking op hefboomwerking. Dit wil dus voorkom of firmas 'n kombinasie van hierdie modelle oorweeg wanneer hulle finansieringsbesluite neem.