Thesis (PhD (Economics))--University of Stellenbosch, 2008. / The primary financial objective of a firm is the maximisation of its shareholders’ value. A problem faced by the shareholders of a firm is that it is difficult to determine the effect of management decisions on the future share returns of the firm. Furthermore, it may be necessary to implement certain monitoring costs to ensure that management is focused on achieving this objective. A firm would, therefore, benefit from being able to identify those financial performance measures that are able to link the financial performance of the firm to its share returns. Implementing such a financial performance measure in the valuation and reward systems of a firm should ensure that management is aligned with the objective of shareholder value maximisation, and rewarded for achieving it. A large number of traditional financial performance measures have been developed. These measures are often criticised for excluding a firm’s cost of capital, and are considered inappropriate to be used when evaluating value creation. Furthermore, it is argued that these measures are based on accounting information, which could be distorted by Generally Accepted Accounting Practice (GAAP). Studies investigating the relationship between these measures and share returns also provide conflicting results. As a result of the perceived limitations of traditional measures, value based financial performance measures were developed. The major difference between the traditional and value based measures is that the value based measures include a firm’s cost of capital in their calculation. They also attempt to remove some of the accounting distortions resulting from GAAP. Proponents of the value based measures present these measures as a major improvement over the traditional financial performance measures and report high levels of correlation between the measures and share returns. A number of studies containing contradictory results have been published. On the basis of these conflicting results it is not clear whether the value based measures are able to outperform the traditional financial performance measures in explaining share returns. The primary objectives of this study are thus to: • Determine the relationship between the traditional measures earnings before extraordinary items (EBEI) and cash from operations (CFO), and shareholder value creation; • Investigate the value based measures residual income (RI), economic value added (EVA), cash value added (CVA) and cash flow return on investments (CFROI), and to determine their relationship with the creation of shareholder value; • Evaluate the incremental information content of the value based measures above the traditional measures. The information content of the traditional measures and the value based measures are evaluated by employing an approach developed by Biddle, Bowen and Wallace (1997). The first phase of this approach entails the evaluation of the relative information content of the various measures in order to determine which measure explains the largest portion of a firm’s market-adjusted share returns. The second phase consists of an evaluation of the incremental information content of the components of a measure in order to determine whether the inclusion of an additional component contributes statistically significant additional information beyond that contained in the other components. The study is conducted for South African industrial firms listed on the Johannesburg Securities Exchange for the period 1991 to 2005. The data required to calculate the measures investigated in the study are obtained from the McGregor BFA database. This database contains annual standardised financial statements for listed and delisted South African firms. It also contains EVA, cost of capital and invested capital amounts for those firms listed at the end of the research period. Including only these listed firms in the research sample would expose the study to a survivorship bias. Hence these values are estimated for those firms that delisted during the period under review by employing a similar approach to the one used in the database. The resulting sample consists of 364 firms providing 3181 complete observations. Since different information is required to calculate the various measures included in the study, different samples are compiled from this initial sample and included in the tests conducted to evaluate the information content of the measures. The results of this study indicate that the value based measures are not able to outperform EBEI in the majority of the relative information content tests. Furthermore, the measures EVA, CVA and CFROI are also not able to outperform the relatively simple value based measure RI. The results from the incremental information content tests indicate that although some of the components of the value based measures provide statistically significant incremental information content, the level of significance for these relatively complex adjustments is generally low. Based on these results, the claims made by the proponents of the value based measures cannot be supported. Furthermore, if a firm intends to incorporate its cost of capital in its financial performance measures, the measure RI provides most of the benefits contained in the other more complex value based measures.

Thesis (MPA.) --University of Limpopo, 2016. / Refer to document

Thesis (MBA)--Stellenbosch University, 2008. / ENGLISH ABSTRACT: Repurchasing of shares by South African companies were legalised on 1 July 1999. This introduced an alternative to dividends for distributing cash to shareholders. Although dividends and share repurchases realise the same value in a perfect efficient market, the inefficiencies of the South African stock market require managers to carefully evaluate factors like taxation and stock price valuation when selecting appropriate distribution methods. This research report aims to update shareholder distribution trends for industrial JSE listed companies over the past 10 years in order to determine the impact of share repurchases on dividend payouts. Furthermore, this research report examines the factors that may have had an impact on shareholder distribution choices in order to provide some guidelines for choosing appropriate distribution methods. An initial analysis of SENS share repurchase announcements revealed that 121 JSE listed companies repurchased about R50 billion worth of shares up to 30 June 2007. The bulk of the shares, 65% by value, were repurchased on the open market, while 35% was repurchased through specific fixed price offers. However, a comparison of accurate share repurchase data obtained from a sample of company annual reports, indicate that repurchase announcements understate actual repurchases by more than 20% on average. Further analysis of distribution trends were therefore based on actual repurchase data published in annual reports rather than SENS announcements. After the legalisation of share repurchases in South Africa, a decline in dividend paying companies was expected similar to that experienced by the United States since the 80's. However, a detailed analysis of 132 industrial listed companies indicated that the proportion of dividend paying companies increased from a level of 50% to almost 75% since the introduction of share repurchases. On the other hand, the proportion of companies repurchasing shares initially rose to over 25%, but then declined to below 20% by 2007. Ordinary dividends are the dominant shareholder distribution choice with 64% of companies opting for this method. Open market share repurchases have been well adopted with 17% of companies using this method, while only 5% and 4% of companies using special dividends or specific repurchases respectively. Dividends paid out of share premium (capital distributions) have also emerged as a favourite over recent years with almost 20% of companies using this shareholder distribution method. Current tax legislation do not provide all the advantages usually enjoyed by share repurchases internationally and have largely prevented dividends from being substituted by share repurchases. The decline in share repurchases up to 2007 also indicates that share repurchases become less effective as share prices increase to overvalued levels. While tax implications and stock price valuation remain the dominant determinants of shareholder distribution choice, this study shows that shareholder diversity, dividend preferences, size of distribution, and BEE requirements also have significant influences on the choice of distribution method in the South African context. / AFRIKAANSE OPSOMMING: Die terugkoop van aandele deur Suid-Afrikaanse maatskappye is wettig sedert 1 Julie 1999. Dit het 'n alternatief tot dividende in werking gestel om kontant aan aandeelhouers uit te keer. Alhoewel dividende en aandele-terugkoop dieselfde waarde in 'n perfekte doeltreffende mark realiseer, vereis die tekortkominge van die Suid-Afrikaanse aandelemark dat bestuurders faktore soos belasting en aandeelpryswaardasie versigtig moet oorweeg tydens die keuse van geskikte uitkeringsmetodes. Die doelwit van hierdie navorsingsverslag is om die tendense van uitkerings aan aandeelhouers te hersien vir industriele JSE-genoteerde maatskappye oor die laaste 10 jaar om sodoende die effek van aandele-terugkope op dividenduitbetalings te bepaal. Verder ondersoek hierdie navorsingsverslag ook die faktore wat moonlik 'n invloed op aandeelhouers-uitkeringskeuses gehad het, om sodoende riglyne vir die keuse van geskikte uitkeringsmetodes saam te stel. 'n Voorlopige analise van SENS-terugkoopaankondigings toon dat 121 JSE-genoteerde maatskappye ongeveer R50 miljard se aandele teruggekoop het tot en met 30 Junie 2007. Die grootste gedeelte van hierdie aandele, 65% se waarde, is op die ope mark teruggekoop terwyl 35% deur spesifieke vasteprys terugkope verkry is. 'n Vergelyking met terugkoopsyfers wat uit 'n steekproef van maatskappyjaarverslae geneem is, dui egter daarop dat aankondigings die ware terugkope met gemiddeld 20% onderskat. Verdere ontleding van aandeelhouers-uitkeringstendense word derhalwe gebaseer op syfers wat in jaarverslae gepubliseer is, eerder as SENS-aankondigings. Na die wettiging van aandele-terugkoop in Suid-Afrika, is verwag dat dividenduitbetalings sou daal soortgelyk aan dit wat in die Verenigde State ondervind is sedert die 80's. Die ondersoek van 132 genoteerde industriele maatskappye toon egter dat die persentasie van maatskappye wat dividende betaal van 50% tot bykans 75% toegeneem het sedert aandele-terugkoop 'n beskikbare opsie is. In teenstelling hiermee, het die persentasie maatskappye wat aandele terugkoop aanvanklik tot 25% gestyg, maar sedertdien afgeneem tot onder 20% teen 2007. Gewone dividende is die gewildste aandeelhouers-uitkeringsmetode met 64% van maatskappye wat van hierdie metode gebruik maak. Aandele-terugkope op die ope mark is goed verteenwoordig met 17% van maatskappye wat van hierdie metode gebruik gemaak het, terwyl slegs 5% en 4% van maatskappye onderskeidelik van spesiale dividende en spesifieke aandele-terugkope gebruik gemaak het. Dividende uit aandelepremie (kapitaaluitkerings) het ook na vore getree as 'n gunsteling keuse in die laaste paar jaar met bykans 20% van maatskappye wat hierdie uitkeringsmetode gebruik het. Huidige belastingswetgewing bied nie al die belastingvoordele aan aandele-terugkope wat normaalweg deur internasionale maatskappye benut word nie en het grotendeels verhoed dat dividende deur aandele-terugkoop vervang is. Die afname in aandeleterugkope tot en met 2007 is ook 'n aanduiding dat dit minder effektief raak soos wat aandeelpryse oor gewaardeerde vlakke styg. Terwyl belasting-oorwegings en aandeelpryswaardasies steeds die dominante drywers van aandeelhouersuitkeringskeuses bly, bevind hierdie studie dat faktore soos aandeelhouers se diversiteit, dividendvoorkeure, grootte van uitkerings, en vereistes van swart ekonomiese bemagtiging ook 'n noemenswaardige invloed op uitkeringskeuses binne die Suid-Afrikaanse konteks het.

Assignment (MComm)--University of Stellenbosch, 2001. / ENGLISH ABSTRACT: A definite need exists for a measure which can be used to determine the degree of capital intensity of an enterprise. One of the main reasons why it is important to determine if an enterprise is capital or labour intensive is that the two types of enterprises react to changes in the economic environment in different ways. Some changes in the economic factors will have a totally different effect on a capital intensive enterprise than they would have on a labour intensive one. The degree of capital intensity of an enterprise can therefore be used to predict how it will react to economic changes, and it is therefore a valuable source of information for financial decision-making. The measurement of capital intensity, however, presents a major problem. A large number of different measures have been developed and used in the literature. These measures include the measures of total assets to revenue; property, plant and equipment to revenue; property, plant and equipment to total assets; depreciation as a percentage of revenue; as well as property, plant and equipment per employee. A number of measures are also based on value added figures, and these include salaries to revenue; value added per employee; property, plant and equipment to value added; and salaries to value added. In the literature most researchers provide no or little justification for their preferred measure of capital intensity. The main objective of the study is to determine an appropriate method to measure capital intensity. For this purpose the above-mentioned measures, which are generally used to determine capital intensity, are considered critically and evaluated by classifying enterprises listed in the Industrial Sector of the Johannesburg Stock Exchange during the period 1989 to 1996. During this period the South African economy experienced a decline, followed by an upswing in the economic cycle. Principal component analyses (PCA) are used to analyse the data. These analyses are carried out for each year separately as well as for the period as a whole. Biplots are used to provide a multidimensional graphic representation of the results. The results indicate that the five traditional measures of capital intensity which are not based on value added figures are all suitable to use as measures of capital intensity. Only one of the measures based on value added figures, however, are able to indicate capital intensity. The five traditional measures of capital intensity which are not based on value added figures, as well as the measure property, plant and equipment to value added, are therefore included in the principal component analyses. The principal component scores obtained from the first principal component are proposed as a composite measure of capital intensity. These principal component scores represent a linear combination of the six measures of capital intensity. The relative contributions of the various measures to this composite measure are also investigated, and it is found that all six the measures provide an important contribution. The results indicate that a number of enterprises listed in the Stores and Food sectors are relatively less capital intensive, while enterprises listed in the Building and Construction, Engineering, Steel and Allied, and Electronics sectors are relatively capital intensive. A visual evaluation of the results indicates that the proposed method IS able to distinguish between capital and less capital intensive enterprises. The results of the study provide researchers with a more efficient way of measuring capital intensity, and can be used to provide more information about the effect of changes in the economic cycle on the expected financial performance of enterprises. / AFRIKAANSE OPSOMMING: 'n Duidelike behoefte bestaan VIr 'n maatstaf wat gebruik kan word om die kapitaalintensiteit van 'n onderneming te bepaal. Een van die vernaamste redes waarom dit belangrik is om te bepaal of 'n onderneming kapitaal- of arbeidsintensief is, is die verskillende wyses waarop die twee tipes ondernemings gedurende 'n verandering in die ekonomiese siklus reageer. Sommige veranderinge in die ekonomiese faktore sal die teenoorgestelde effek op 'n kapitaalintensiewe onderneming hê as wat dit op 'n arbeidsintensiewe onderneming mag hê. 'n Onderneming se graad van kapitaalintensiteit kan dus gebruik word om te voorspel hoe die onderneming op ekonomiese veranderinge sal reageer, en is dus 'n belangrike bron van inligting by finansiële besluitneming. Die meting van kapitaalintensiteit is egter 'n belangrike probleem. 'n Groot aantal verskillende maatstawwe van kapitaalintensiteit is ontwikkel en word algemeen in die literatuur gebruik. Hierdie maatstawwe sluit totale bates tot inkomste; eiendom, aanleg en toerusting tot inkomste; eiendom, aanleg en toerusting tot totale bates; depresiasie as 'n persentasie van inkomste; asook eiendom, aanleg en toerusting tot aantal werknemers in. 'n Aantal maatstawwe wat op waarde toegevoeg gebaseer is, is ook ontwikkel, en sluit die maatstawwe salarisse tot inkomste; waarde toegevoeg per werknemer; eiendom, aanleg en toerusting tot waarde toegevoeg; asook salarisse tot waarde toegevoeg in. In die literatuur verskaf die meeste navorsers min of geen motivering vir die spesifieke maatstaf wat hul voorkeur geniet nie. Die primêre doelstelling van die studie is om 'n geskikte metode te vind om kapitaalintensiteit te meet. Ten einde hierdie doelstelling te bereik, word die bogenoemde maatstawwe, wat algemeen gebruik word as maatstawwe van kapitaalintensiteit, krities ondersoek en geëvalueer deur ondernemings wat genoteer is in die Industriële Sektor van die Johannesburgse Aandelebeurs gedurende die periode 1989 tot 1996 te klassifiseer. Gedurende hierdie periode het die Suid-Afrikaanse ekonomie 'n afname, gevolg deur 'n opswaai in die ekonomiese siklus beleef. Hoofkomponent analises word gebruik om die verskillende maatstawwe te evalueer. Die analises word individueel uitgevoer vir elke jaar, sowel as vir die periode as 'n geheel. Bi-stippings word gebruik om 'n meerdimensionele grafiese voorstelling van die resultate te verskaf. Die resultate toon dat die vyf tradisionele maatstawwe van kapitaalintensiteit wat nie op waarde toegevoeg gebaseer is nie almal geskik is om as maatstawwe van kapitaalintensiteit gebruik te word. Slegs een van die maatstawwe wat op waarde toegevoeg gebaseer is, is egter in staat om kapitaalintensiteit aan te toon. Die vyf tradisionele maatstawwe van kapitaalintensiteit, sowel as die maatstaf eiendom, aanleg en toerusting tot waarde toegevoeg, word derhalwe ingesluit in die hoofkomponent analises, en die hoofkomponenttellings wat verkry word uit die eerste hoofkomponent word as 'n saamgestelde maatstaf van kapitaalintensiteit voorgestel. Hierdie hoofkomponenttellings verteenwoordig 'n liniëre kombinasie van die ses maatstawwe van kapitaalintensiteit. Die relatiewe bydraes van die verskillende maatstawwe tot die saamgestelde maatstaf word ook ondersoek. Die resultate dui aan dat 'n aantalondernemings wat in die Winkels en Voedsel sektore genoteer is relatief minder kapitaalintensief is, terwyl ondernemings wat in die Boubedryf, Ingenieurswese, Staal en Bedrywe, asook die Elektronika sektore genoteer is, relatief kapitaalintensief is. 'n Visuele evaluasie van die resultate toon aan dat die voorgestelde maatstaf in staat is om tussen kapitaalintensiewe en minder kapitaalintensiewe ondernemings te onderskei. Die resultate van die studie stel navorsers in staat om 'n meer effektiewe meting van kapitaalintensiteit te verkry, en kan ook meer inligting verskaf oor die invloed van veranderinge in die ekonomiese siklus op die verwagte finansiële prestasie van ondernemings.

Thesis (MPhil)--Stellenbosch University, 2005. / ENGLISH ABSTRACT: Despite the seriousness of HIV and AIDS affecting productivity at workplaces, little attention is being paid to the special needs of the infected people in the world of work and the ultimate reality this will have on the companies’ financial health. HIV/AIDS retards economic development and business growth. The epidemic influences the workforce and markets in which business operates. Business must play a leading part in the internal response to HIV/AIDS pandemic. This is both an ethical imperative and the key to business success. Most research conducted on the subject mainly concentrated on the effects of HIV and AIDS on productivity, emphasizing absenteeism as the direct cause of low productivity. The costs of HIV and AIDS will be felt beyond the direct effect of the disease. The indirect costs include the following: The increased costs of recruiting and training, given the extra deaths and disabilities expected. The negative effect on staff morale Loss of time as a result of management and labor meetings to discuss the AIDS crisis as it develops, this resulting in loss of turnover and profits. With the rising prevalence of HIV/AIDS, businesses should be increasingly concerned about the impact of the disease on their organizations-concerns that should be well founded. At the broadest level, businesses are dependent on the strength and vitality of the economies in which they operate. HIV/AIDS raises the costs of doing business, reduces productivity and lowers overall demand for goods and services. The research process in this article focused particularly on workplace issues, which are a key dimension of the relationship between corporations and HIV/AIDS. Data collection was by both structured questionnaires and unstructured interviews, interviews with both management and workers’ representatives and structured questionnaires with the general workforce. The questions asked were open-ended: “Is HIV/AIDS a problem for your company now or in the future?” and “If HIV/AIDS impacted on your company’ financial performance would you act and why?” The research group consisted of four companies in different areas of operations: retail, service and manufacturing and the participants were chosen on the basis of certain inclusive criteria: The number of employees employed. Length of service operation. Willingness to share certain financial information. A qualitative method of data analysis was used in the study and is described in detail. The qualitative research method looks at the subjective meanings attached, descriptions, metaphors, symbols and descriptions of specific cases. It was found that despite the differences from one company to the other, the potential impact of HIV/AIDS on companies’ financials went beyond the direct costs of productivity. As the debate over the availability of cheaper generic anti-retroviral drugs rages in the background, business is faced with the dilemma of significant investment to keep their labour force healthy and alive. This has to be weighed up against the high costs involved in rehiring, retraining and re-incentivising their replacements. / AFRIKAANSE OPSOMMING: Ten spyte van tekens dat MIV en VIGS produktiwiteit in die werkplek affekteer, word daar nog baie min te doen aan die behoeftes van die werkers wat deur die epidemie getref word. Verder, word min aandag geskenk aan die potensiële uitwerking van die epidemie op die finansiële gesondheid van maatskappye. MIV/VIGS vertraag ekonomiese ontwikkeling en besigheidsgroei. Die epidemie het ‘n negatiewe impak op die arbeidsmag en die market waarin besigheid plaasvind. Besigheid moet dus die leiding neem in die interne respons op die MIV/VIGS pandemie. Dit is eties belangrik en die sleutel tot die sukses van besigheid. Die meeste navorsing oor die onderwerp het tot dusver gekonsentreer op die effek van MIV en VIGS op produktiwiteit met die klem op afwesigheid as ‘n direkte oorsaak van lae produktiwiteit. Die koste van MIV en VIGS behels egter veel meer as net die direkte gevolge van die siekte. Die indirekte koste sluit die volgende in: Die koste verbonde aan opleiding en die soeke na nuwe personeel weens sterftes en siekte van personeel. Die negatiewe effek op die moraal van personeel. Verlore tyd as gevolg van bestuurs- en arbeidsvergaderings om die VIGS-krisis te bespreek namate dit ontwikkel en winste negatief beïnvloed. Besigheid behoort meer bekommerd te wees oor die toename in MIV/VIGS gevalle en die impak wat dit op organisasies sal hê. MIV/VIGS verhoog die kostes van besigheid doen, verminder produktiwiteit en verlaag die algemene vraag na goedere en dienste. Die navorsingsbenadering in die artikel fokus op daardie werkplek-aangeleenthede wat ‘n sleuteldimensie is van die verhouding tussen organisasies en MIV/VIGS. Data is ingewin deur middel van gestruktureerde vraelyste en ongestruktureerde onderhoude. Onderhoude is met beide bestuurslui en verteenwoordigers van werkers gevoer, en gestruktureerde vrae met die werkers. Die vrae gestel was oop vrae soos “Is MIV/VIGS `n problem vir u onderneming huidiglik of in die toekoms? En “Indien MIV/VIGS ‘n negatiewe impak het op die onderming se prestasie sal jy optree en waarom?” Die navorsingsgroep het bestaan uit vier ondernemings in die kleinhandels-, dienslewerings-, en vervaardigingssektor. Die deelnemers is gekies op die basis van inklusiwiteit met die volgende criteria: Die getal werkers in diens. Hoe lank is onderneming in besigheid? Die bereidwilligheid om inligting te deel. `n Kwalitatiewe metode van data analise is gebruik wat breedvoerig verduidelik en beskryf word. Die navorsingsmetode kyk veral na subjektiewe betekenisse, omskrywings, metafore, simbole en omskrywings van spesifieke gevalle. Navorsing het getoon dat MIV/VIGS ‘n impak het op ondernemings se finansiële omstandighede en produktiwiteit. Terwyl die debat oor goedkoper generiese anti-retrovirale middele aan die gang is, word ondernemings of besighede konfronteer met die keuse tussen beduidende investering om die arbeidsmag gesond en lewendig te hou of die hoë koste van herindiensneming, heropleiding en insentiewe.

The main objective of the thesis was to investigate the factors that determine capital structures of financial firms using two separate samples of banks and insurance companies. In the first instance, the results of the study showed that the financing behaviour of banks mirrors that of non-financial firms. It was also observed bank financing behaviour can be best explained by the pecking order theory. Risk and size variables were observed to be negatively related to the Tier 1 regulatory capital ratio, whereas the dividend variable was positively related. Similarly, risk and size were found to be negatively associated with buffer capital, while dividends were positively related. The 2007–2009 global financial crisis (GFC) was found to have negatively affected the financial structures of banks. Consistent with similar studies, it was observed that banks have a target capital structure, and adjust to this target at an adjustment speed of 44%. With regard to insurance companies, it was observed that the firm-level determinants of capital structure explain insurer leveraging. Unlike banks, the 2007–2009 GFC positively affected the capital structure of insurance companies. Similar to banks, results showed that insurers have target capital structures which they seek to achieve in their financing and adjust to such targets at a rate of 21%, which is lower than that of banks. The study contributes to the body of knowledge in four major ways. Firstly, it adds to the literature on the capital structure of financial firms, which area has not been extensively and conclusively studied. Using a different environment, it validates the ‘standard corporate finance view’ as has been observed in the few studies on financial firms. Secondly, it validates the ‘buffer view’ and ‘regulatory view’ of capital structures of financial firms that have taken prominence since the last GFC. Thirdly, the study recognises that banks and insurance companies are fundamentally different with regard to capital structure and regulation and therefore warranted separate treatment in studies. This is in contrast with recent studies that do not recognise the heterogeneity of the two types of firms. Fourthly, to the researcher’s knowledge this study is the first to examine the impact of business cycles/financial crises on the financing patterns of financial firms. Confirming the fundamental differences between banks and insurance companies, the study observed that financial crises have a negative impact on capital structures of banks (meaning that they deleverage during crises). In contrast, financial crises have a positive impact on capital structures of insurance companies (meaning, unlike banks, they leverage during crises). / Business Management / D. Phil. (Management Studies)

M.Com. (Financial Management) / Mergers and acquisitions (M&A) is a thoroughly researched area in finance. However, some basic concerns still remain unresolved such as the measurements of corporate performance post M&A (Agrawal, Jaffe & Mandelker, 1992:1605. In this study, the impact of M&A on corporate performance of South African listed companies in the financial sector was investigated. The primary goal was to determine if corporate performance post M&A does actually change. Share price studies have had little success in relating the gains in equity value of M&A to improvements in subsequent corporate performance (Healy, Palepu & Ruback, 1992:136). Therefore, an accounting study approach was applied to determine if corporate performance changes post M&A. The accounting study utilised a quantitative approach that follows a quasi-experimental research design. This involved statistical testing to examine the accounting data of companies before (pre-testing) and after (post-testing) the M&A, to determine a change in corporate performance. Accounting ratios were applied as performance indicators and consisted of: inflation adjusted return on assets, inflation adjusted return on equity, operating profit margin and return on capital employed. None of the performance indicators indicated a statistical significant change between pre and post M&A performance. It was concluded that the sample of financial companies that engaged in M&A did not experience a significant change in corporate performance within their first financial year post M&A.

Thesis M.COM. (Accounting)) -- University of Limpopo, 2019 / The apparent weaknesses in corporate governance of state-owned enterprises and poor audit reports have heightened the concern of investors and the state as the major shareholder of these enterprises returns. Audit committees as a mechanism for good corporate governance plays a major role in enterprise performance. These state-owned enterprises play a vital role in the economy of South Africa. This study examines the effect of audit committee composition (independence, gender diversity, financial expertise and size) on financial performance measured by return on assets using major state-owned enterprises listed on Schedule 2 of PFMA. The results show that the audit committee size, gender diversity and financial expertise has an insignificant positive relationship with ROA, whereas the independence of audit committee members has an insignificant negative association. The result of the study may be beneficial to various stakeholders and boards of enterprises to make some proper decisions on audit committee composition to attract more investors and at the same time safeguarding the investments of shareholders.

Existing literature and theories related to the separation of ownership and control and its impact on companies' financial performance, including dividend payment have left this subject in state of ambiguity and uncleamess, with various contradictions and inconsistencies being noted. In order to establish whether there is a significant difference in financial performance between owner-controlled and management-controlled companies in South Africa, as a result of the separation of ownership and control, this study has used appropriate mathematical and statistical methods for data processing and analysis. Results obtained from the study have revealed the existence of a significant difference in financial performance between owner-controlled and management-controlled companies in South Africa, as measured in terms of profitability, asset management, liquidity, leverage and dividend payment. The analysis has indicated that management-controlled companies have been more efficient, more mature financially and paying higher dividends, out of earnings available to shareholders, than their owner-controlled counterparts. / Business Management / M. Comm. (Business Management)

Thesis (MBA (Business Management))--University of Stellenbosch, 2008. / ENGLISH ABSTRACT: To date, there has been significant research completed on the topic of corporate financial distress. Two pioneering researchers in the field of predicting financial distress was Beaver in 1966 and Altman in 1968. More recent research, based on companies listed on the JSE has been that of Steyn-Bruwer and Hamman (2006). This project, based on the latter authors’ work, has been formulated with one main research objective and two subordinate research objectives. The main research objective is to prove that different modelling techniques provide better prediction accuracies than others. The two subordinate research objectives are firstly to prove that there is a difference in the overall predictive accuracy if the data (provided by Steyn-Bruwer and Hamman) is subdivided according to “year before failure” and not according to economic period and secondly to prove that more optimised, independent variables would provide a better overall predictive accuracy. This research report summarises several significant papers on the topic; and draws the conclusion that research on financial distress is fragmented with very little consensus on any of the major definitions, assumptions and findings. In order to contextualise these differences; this research report defines and discusses corporate financial distress and considers the major issues associated with the field of research. An interesting observation from the literature survey was the fact that existing literature does not readily take consideration of the number of Type I and Type II errors made. As such, this research report introduces a novel concept (not seen in other research) called the “Normalised Cost of Failure” (NCF) which takes cognisance of the fact that a Type I error typically costs 20 to 38 times that of a Type II error. In order to satisfy the main research objective several different modelling techniques were selected based on their popularity in the literature surveyed. They are: Multiple Discriminant Analysis (MDA), Recursive Partitioning (RP), Logit Analysis (LA) and Neural Networks (NN). A summary of each of the different techniques is provided in Chapter 4 of this research report. The research by Steyn-Bruwer and Hamman forms the departure point for this research and their work is summarised in Chapter 5 of this report. Chapters 6, 7 and 8 use the data from Steyn-Bruwer and Hamman along with the above mentioned modelling techniques to verify the main and subordinate objectives. In terms of the main research objective, the results of these chapters show that the different analysis techniques definitely produce different predictive accuracies. Here, the MDA and RP techniques correctly predict the most “failed” companies; and consequently have the lowest NCF. This research report also shows that LA and NN provide the best overall predictive accuracy. In terms of the first subordinate research objective; this research shows that using the year before failure rather than the economic period as a subdivision provides superior predictive accuracy. With regard to the second subordinate research objective: there is no difference in the predictive accuracies if the independent variables are further optimised. These results were disappointing and consequently disprove the second subordinate objective that widening the number of input variables actually improves the predictive accuracy. In fact, the results indicate that the information contained in the independent variables seems to saturate after the most important (key predictor) independent variables have been included in the model. It is important to take cognisance of the fact that each predictive technique has its own strength and weakness. It is proposed by the author that the strengths and weaknesses of these predictive techniques be combined to provide a better overall predictive methodology. / AFRIKAANSE OPSOMMING: Heelwat betekenisvolle navorsing oor die onderwerp van maatskappye se finansiële verknorsing is tot op hede voltooi. Twee baanbreker-navorsers op die gebied van vooruitskatting van finansiële verknorsing was Beaver in 1966 en Altman in 1968. Meer onlangse navorsing, gebaseer op maatskappye wat op die JSE genoteer is, was dié van Steyn-Bruwer en Hamman (2006). Hierdie navorsingsverslag, gebaseer op die voorgenoemde outeurs se werk, is geformuleer met een hoofnavorsingsdoelwit en twee ondergeskikte navorsingsdoelwitte. Die hoofnavorsingsdoelwit is om te bewys dat verskillende modelleringstegnieke beter voorspellingsakkuraatheid as andere het. Die twee ondergeskikte navorsingsdoelwitte is, eerstens, dat daar ʼn verskil is in die oorhoofse voorspellingsakkuraatheid as die data (verskaf deur Steyn-Bruwer en Hamman) onderverdeel word volgens die “jaar voor mislukking” eerder as volgens die ekonomiese tydperk; en tweedens, om te bewys dat meer geoptimiseerde, onafhanklike veranderlikes kan lei tot ʼn beter oorhoofse voorspellingsakkuraatheid. Ten einde hierdie verskille te konseptualiseer, het hierdie navorsingsverslag finansiële mislukkings van maatskappye bespreek en gedefinieer en aandag geskenk aan die belangrikste aspekte geassosieer met die navorsingsveld. ʼn Interessante waarneming uit die literatuurstudie was die feit dat die huidige literatuur selde indien enige, oorweging skenk aan die aantal Tipe I- en Tipe II-foute wat gemaak word. As sulks het hierdie navorsingsprojek ʼn nuwe begrip (nog nie in ander navorsing gesien nie) ontwikkel, wat beskryf word as die “Genormaliseerde Kostefaktor”; wat die feit dat ʼn Tipe I-fout tipies 20 tot 38 maal die koste van ʼn Tipe II-fout beloop, in ag neem. Ten einde te voldoen aan die hoofnavorsingsdoelwit is verskillende modelleringstegnieke wat op grond van hul gewildheid in die literatuur voorgekom het, gekies. Hulle is: Meervoudige Diskriminantanalise (MDA), Herhalende Verdeling (RP), Logit-Analise (LA) en Neurale Netwerke (NN). ʼn Opsomming van elk van hierdie verskillende tegnieke word in Hoofstuk 4 van hierdie navorsingsverslag verskaf. Die navorsing wat deur Steyn-Bruwer en Hamman gedoen is, vorm die vertrekpunt van hierdie navorsing en hulle werk is gevolglik in Hoofstuk 5 van hierdie verslag opgesom. Hoofstukke 6, 7 en 8 gebruik die data van Steyn-Bruwer en Hamman tesame met die bovermelde modelleringstegnieke ten einde die hoof- en ondergeskikte doelwitte te bewys. In terme van die hoofnavorsingsdoelwit, het die resultate van hierdie hoofstukke getoon dat die verskillende analitiese tegnieke definitief verskillende voorspellingsakkuraatheid oplewer. Hier het die MDA- en RP-tegnieke die grootste aantal mislukte maatskappye korrek voorspel, en gevolglik die laagste Genormaliseerde Kostefaktor gehad. Die navorsingsverslag toon ook dat LA en NN die beste oorhoofse akkuraatheid van voorspelling het. In terme van die eerste ondergeskikte navorsingsprobleem het hierdie navorsing getoon dat, om die jaar voor mislukking te gebruik as onderverdeling, eerder as die ekonomiese tydperk, beter voorspellingsakkuraatheid het. Wat die tweede ondergeskikte navorsingsdoelwit betref, is daar bevind dat daar geen verskille in die voorspellingsakkuraatheid bestaan as die individuele veranderlikes verder geoptimaliseer word nie. Hierdie resultate was teleurstellend en het gevolglik die tweede ondergeskikte probleem, naamlik dat as die aantal inset-veranderlikes sou vergroot word, dit die vooruitskattingsakkuraatheid behoort te kan verhoog, verkeerd bewys. Tewens, die resultate het getoon dat die inligting soos vervat in die onafhanklike veranderlikes klaarblyklik versadiging bereik nadat die belangrikste (hoof-vooruitskatter) onafhanklike veranderlikes in die model opgeneem is. Dit is belangrik om kennis te neem van die feit dat elke vooruitskattingstegniek sy eie sterk en swak punte het. Die skrywer stel dus voor dat hierdie sterk- en swakpunte gekombineerd gebruik word om ʼn beter oorhoofse vooruitskattingsmetodologie daar te stel.