Thesis (M.B.A.)--Boston University / PLEASE NOTE: Boston University Libraries did not receive an Authorization To Manage form for this thesis or dissertation. It is therefore not openly accessible, though it may be available by request. If you are the author or principal advisor of this work and would like to request open access for it, please contact us at open-help@bu.edu. Thank you. / 2999-01-01

Boston University. University Professors Program Senior theses. / PLEASE NOTE: Boston University Libraries did not receive an Authorization To Manage form for this thesis. It is therefore not openly accessible, though it may be available by request. If you are the author or principal advisor of this work and would like to request open access for it, please contact us at open-help@bu.edu. Thank you. / 2999-01-01

Financial signaling theory has hypothesized that signals are backed up by improved cash flow. The relationship between signals and cash flow, however, has never been empirically investigated. The purpose of this paper is to conduct such an investigation by examining the relationship between cash flow and dividend signal, the most frequently employed financial signal. In particular, this study examines if there are false dividend signals that are not supported by better cash flow and how the market reacts to them. A two-stage empirical dividend signalling model is developed. Unexpected dividend increases of non-financial and non-regulated firms from 1982 through 1986 are investigated. Event study methodology and the Analysis of Variance comparison are used in the testing. The empirical results indicate that while the majority of signaling events are supported by improved cash flow, some dividend signals, especially strong ones, are not. The market is partly deceived by false signals at the dividend announcement. When the new cash flow information arrives, however, the market reacts negatively and quickly to the falsely signaling firms.

This study seeks to show that a higher usage of debt instruments by consumers with limited available funds leads to the usage of savings tools to finance debt costs, which subsequently results in lower levels of savings. This was espoused by the literature on PFM and also proven by the test results from the research hypotheses that were computed by means of a logistic regression. The test results showed that there is a statistically significant relationship between the usage of debt instruments and the usage of savings tools. An emphasis is placed on the importance of savings as an integral component of the PFM concept: it is namely seen to be indispensable to good financial planning to ensure current and future consumer financial security. Therefore, this study concludes by highlighting the importance of consumers’ financial- management skills in minimising debt costs to increase levels of savings by controlling higher consumption expenditure through debt. / Business Management / M. Com. (Business management)

Over the years, there has been a lot of discussion about the audit expectations gap. Research on the expectations gap has focused exclusively on the audit aspect, with limited attention being given to the possibility of the existence of other elements that may in fact contribute to an even wider expectations gap. This study has focused on the financial statements expectations gap. Financial statements are the public face of an organisation. It is therefore crucial that users understand their objective, message, scope and limitations. This study explores and evaluates the existence of a financial statements expectations gap in a small state economy, namely Malta. The data for this study was collected from shareholders and auditors in Malta using a mixed methods approach with a sequential explanatory design through the use of a survey questionnaire and semi-structured interviews. The findings have shown that the financial statements expectations gap exists in various areas, some of which are fundamental to the understanding of financial statements. There is a clear lack of clarity, or confusion, about the objective of financial statements. This appears to be the result of the over-emphasis on decision-usefulness as an objective of financial statements, the imprecision of the word stewardship and the failure to communicate clearly the scope and limitations of financial statements. The study has shown that the attempts by standard setters to satisfy various user needs with the same set of financial statements were unsuccessful in Malta. Communicating financial information has been identified as the primary purpose of financial statements. However, the understandability of financial statements was negatively impacted primarily by the complexity of information, the frequent changes to standards, information overload and the use of technical jargon. The study has accordingly identified those factors that are considered to be conducive to the understandability of financial statements in Malta. Based on the research findings, the study has provided recommendations to the accountancy profession and policy makers on how to address the financial statements expectations gap. Potential areas for future research were also identified.

Corporate Financial Planning--A System Dynamic Approach.

This thesis deals with the financial health of the company KABLO ELEKTRO, a.s. Vrchlabí between the years 2002 – 2006 using selected methods of financial analysis. Possible steps leading to improvement of the company’s financial situation are suggested.

This thesis assess the financial situation of the company ELSEREMO, a.s. in the years 2001 to 2005 at the basis of selected methods of the financial analysis. It includes proposals of possible solutions of identified problems which should result in the improvement of financial situation of the firm in future years.

This thesis evaluates the financial and economic situation of the company RELYFO, spol. s r.o. in the time period of 2004 –2006 by way of prime financial analysis methods. It provides suggestions and recomendations for an improvement of the company´s current position with regards to company opportunities and strategy areas of its future enterprise.

The extensive literature on financial literacy has sought to explain financial behaviours and decisions. On the asset side of the balance sheet, financial literacy is associated with good financial practice and wealth accumulation. On the liability side, however, the contribution of financial literacy to individuals’ financial decisions is not entirely clear. To add to this literature, as well as that of behavioural finance and alternative financial services, this research develops a conceptual framework based on Ajzen’s (1991) theory of planned behaviour (TPB). This framework links individuals’ attitudes to financial matters, subjective norms, perceived feasibility, financial knowledge, and behavioural biases that include overconfidence and present bias on the decision to obtain high-interest loans. The empirical tests of the developed framework suggest that individuals in distinct socio-economic groups have different antecedents that lead to borrowing from alternative financial services. For instance, individuals from low-income households are more likely to obtain these loans if they: do not have access to other forms of credit; struggle to pay their bills; are unemployed; or do not have access to advice from finance professionals. In turn, individuals from high-income households are more likely to obtain these loans if they lack financial knowledge or have behavioural biases like overconfidence or present bias. These results suggest the importance of access to professional advice while ensuring access to traditional means of obtaining credit for low-income individuals in order to reduce the negative effects of these high-interest loans. The results also confirm the importance of current policy initiatives to implement basic finance education in public school curriculums, and the urgency to seek effective approaches to address individuals’ cognitive assumptions.