The determinants of profitability should be at the forefront of CEO’s, managers and business owners minds. Whether the business takes a stockholder or stakeholder approach profit maximisation is the source for the sustainability of a business. International research has been conducted since the 1970’s to establish the effects year, company and industry structure have on the profitability of companies. There is still no consensus as to which variables have the greatest effect on performance of firms. A quantitative research methodology was followed whereby all organisations listed on the Johannesburg Stock Exchange were categorised into their respective Supersectors for the period 1983 to 2008. The performance measures of return on assets, return on equity and return on capital employed were then calculated for all companies and analysed across year, period, company, interaction of company and year, interaction of company and period and finally against Supersector. Five of the six hypotheses in the Variance Component tests showed a variation and one did not. Of these, Supersector was seen as having no variance, and hence no impact on the profitability of firms. Year, period, company and the interactions of these showed significant variance in determining profitability. These results show that year, period (pre and post apartheid) and company do have an effect on the profitability of listed companies. This study allows for Corporate Strategists to focus their efforts on the areas that will have the greatest impact. / Dissertation (MBA)--University of Pretoria, 2010. / Gordon Institute of Business Science (GIBS) / unrestricted

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Class of 2007 Abstract / Objectives: The purpose of this study is to assess various measures of profitability within the pharmaceutical sector amount Fortune 500 firms from 1955-2005. The objective of this investigation is to compare accounting based measures of return (Profit as a % of revenue), economic rates of return (Tobin’s Q), and abnormal rates of return (Stock market value via the Single Index Market Model). Methods: This study will be a descriptive retrospective study of Fortune 500 drug company’s abnormal rates of return. Data for this study was collected from the Fortune 500 database beginning in 1955 and continuing through 2005. For each year, pharmaceutical manufactures with a NAICS or SIC code of 325412 or 2834, were included. The accounting metrics examined were total return to investors (TRI), earnings per share (EPS), and profit as a percent of stockholder’s equity, revenue, and assets. Results: The preliminary results of this trial report an average approximate Q from 1955-2005 of 2.77 +/- 1.77. Furthermore, correlation between Q and all accounting values was positive, except for EPS (-0.047). Conclusions: The preliminary results of this study indicate the important role that approximate Q plays in evaluating profitability and the “true” value of selected firms. The overall approximate Q in this study has a significant correlation to the published values of the same sector and illustrates important trends in the pharmaceutical manufacturing market. These results support and also conflict with current literature. Further analysis will be performed and is warranted to validate the findings from this study and describe the relationship between abnormal returns and the profitability proxies used in this preliminary analysis.

The literature shows some recent calls for an end to 'unaccountable' marketing (Rust et al., 2001; Sheth and Sharma, 2001) and the use of customer lifetime value as an appropriate marketing metric (Rust et al., 2001). Some commentators recommend the application of shareholder value measures to the valuation of customer relationships (Uyemara, 1997; Mariotti, 1996). The thesis evaluates the application of shareholder value measures to the valuation of customers. Shareholder value involves both risk and return; therefore, the thesis argues, the risk of the customer or segment has to be identified before that customer's role in creating shareholder value for an organisation can be assessed. In addition, Relationship Marketing suggests that customer relationships have value in ways that are not easy to capture using traditional customer profitability analysis. The thesis explores different methods of valuing relationship benefits. As a result of the literature review, a model of the total value of the customer is developed which defines the Total Value of the Customer as the lifetime economic value of the customer (customer lifetime value adjusted for risk), plus the value of relationship benefits (Referral and Reference Effects, and Learning and Innovation). The model is operationalized using shareholder value measures and then tested in two collaborative research projects. The research finds that managers in the participating companies do not have good information about the lifetime value of their customer relationships. Evidence of changes in strategy as a result of a better understanding of the value of the customer is found. The research contributes to theory and knowledge through defining and calculating the Total Value of the Customer; demonstrating the application of shareholder value measures to the valuation of customers; finding and measuring relationship benefits measuring customer risk; and finding a link between the value of the customer and targeted marketing strategies.

This dissertation is a collection of three economic studies on the demand for and optimal pricing of state lottery games. Lottery betting is a multi-billion dollar industry that provides an important source of government revenue. Since lotteries operate at such a large scale, suboptimal pricing could lead to substantial losses in potential profit. This body of work provides a significant contribution to the literature on lottery demand by introducing a number of innovative modeling techniques that resolve major shortcomings found in current methods and provide direct policy implications for improving the profitability of state lottery games. The first essay discusses and resolves three important issues widely overlooked in the literature on lottery demand: the treatment of observations with super-unitary expected values, controlling for the endogeneity of price, and the usefulness of estimating price elasticities evaluated at the sample mean. The second essay extends the effective price model of lottery demand into a setting where a single controller operates a portfolio of games simultaneously. Expenditure, own-, and cross-price elasticities for several on-line lottery games are estimated with a Barten synthetic demand system. These elasticities are used to obtain measures of price sensitivity, to determine the degree to which these games are either complements or substitutes, and to evaluate whether profits are maximized over the entire portfolio. Finally, the third essay describes a new method to analyze the profitability of different pricing schemes that explicitly accounts for the intertemporal nature of lottery games with rolling jackpots. Since period-by-period variation in sales induced by rolling jackpots causes changes in the probability that a jackpot is won, which in-turn influences the probability of reaching new drawings with higher jackpot amounts, static analysis of lottery profitability could lead to biased estimates of expected profit. By utilizing a Monte Carlo integration procedure, a measure of expected profit is obtained through the simulation of lottery play over a period of four years. Hypothetical policy changes are examined to estimate potential increases in profitability. Empirical results for the game, Lotto Texas, indicate that a $0.40 increase in price would lead to an estimated increase in profit ranging from $142 million to $191 million over four years.

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Syftet med denna studie är att undersöka sambandet mellan utvalda interna och externa lönsamhetsfaktorer och lönsamheten för svenska bankaktiebolag under perioden 2015-2022. Vidare är studiens syfte att undersöka bankens lönsamhet påverkad av Covid-19-pandemin. Resultaten visar att de interna lönsamhetsfaktorerna hade förväntat samband med lönsamheten, förutom kreditrisken. Bankstorlekens effekt var positiv, kapitalstrukturen hade tvådelat resultat och likviditetsrisken var negativ. Kreditrisken hade däremot ett positivt samband. De externa visade dock inga betydande samband med lönsamheten. Dessutom tyder resultaten på att svenska banker har hanterat Covid-19-pandemins effekter relativt väl, med endast en måttlig minskning av ROAA och en ökning av ROAE under perioden 2020-2022.

With the increased concentration on the corporate social responsibility (CSR), firms are not only required to focus narrowly on generating profit returns for shareholders, but also asked to take responsibilities for firms’ other stakeholders, e.g. customers, employees, society etc., from social, environment and economic perspectives. Hence, nowadays, both having a decent CSR performance and adding profitability are the significant aspects for the company to achieve the sustainable success in the long term. In terms of that, this dissertation aims to explore the CSR-profitability relationship, namely, to explore how does CSR influence the firm’s profitability. After reviewing related literature, and choosing the single-case research method, collecting and handling quantitative and qualitative data analysis, findings are: (1) the CSR-profitability relationship in the case company is not clear in last five years; (2) the prior finding shows ambivalent view and inconsistency with the positive mediating process, a process used to define the CSR-profitability association, of the case company. After discussion of the findings, this study concludes that: (1) the CSR-profitability relationship cannot be clearly defined due to the complex mediating process and direct or indirect effects from tangible/intangible mediating factors; (2) generally, it is not likely to measure the financial impacts from the whole CSR performance, but, the financial impacts can be measured project by project; (3) those intangible resources that related to the CSR cannot be measured; (4) the inconsistent result from the finding may due to some other reasons, e.g. the problem of depending on accounting-based approach to measure the financial impacts from CSR, influence from specific financial crisis, lacking comprehensive measurement system of CSR etc.

Master of Agribusiness / Department of Agricultural Economics / Jeffery R. Williams / For the past couple years, farm income has declined due to lower prices for corn, soybeans, and wheat. This decline has caused agricultural producers to keep equipment longer, which has affected equipment sales at John Deere. When times are good, producers buy new and trade used equipment, but when a producer’s profit is lower than previous years, they tend to save their money for input costs for the next growing season. The decline in farm income has had a negative effect on agriculture sales, but dealers can maintain their market share goals and still be profitable if they adjust their focus to other areas of their business, including sales of parts and equipment service. The goal of this study is to create an analysis tool that field managers can use to help dealers see the potential sales, profit, and pay for performance that they are missing because they are not up to suggested guidelines for sales of parts and equipment service. The tool includes several metrics from an existing report called the Categorization Report. These metrics are Dealer Performance Market Share, Aftermarket Performance Factor, Service Market Performance Factor, and Net Operating Return on Sales. The tool calculates the differences between the dealer metrics and John Deere metrics. Further, this tool is used to compare an individual dealer to other dealer averages and determine what a high performance, fully optimized dealer looks like and how much more a dealership could be selling in sales, parts and service to be a sustainable business in today’s economy. The tool is used to examine three scenarios to demonstrate its flexibility. These scenarios include a top-ten dealer, a large-scale above-average dealer, and a merger of three dealerships. The spreadsheet tool will display a two-page summary that shows how a dealership compares with other dealers that are similar in size and how they compare to the top-ten elite dealers in their category. The summary will also include market share maps to show which dealer-specific geographical areas need improvement to earn more sales in the future.

There were 12.5 million head of cattle in all of Canada as of January 1st, 2012, of which 7.4 million were on cow-calf farms. Of this population, 1.2 million head of cattle were in Manitoba, and within that, 880 thousand were on cow-calf farms. Canadian and Manitoba beef producers have experienced significant volatility in the cattle market. This is partly as a result of loss of exports of cattle to the United States, first due to occurrence of the Bovine spongiform encephalopathy (BSE) Crisis, and then through the Country of Origin Labelling (COOL) legislation developed in the United States. While the beef industry has endured market fluctuations, the North American cattle herd has also been responsible for greenhouse gas (GHG) emissions, through enteric fermentation within their digestive tracks, storage of manure on farms, through the spread of manure on crop fields, and through the production of feed for cattle. Of the total Canadian GHG emissions, agriculture contributed 8 percent in 2013. For the same year, within the total agricultural GHG emissions, cattle and sheep production resulted in 40 percent of methane emissions, and 90 percent of nitrous oxide emissions, both expressed in carbon dioxide equivalent. Regionally, the share of agricultural GHG emissions in Manitoba make up a larger proportion of total provincial GHG emissions, at 31 percent of 21.4 Mt CO2e, as the province has fewer emissions from transportation or stationary combustion.. The confluence of low profitability and larger amounts of GHG emission (relative to other provinces) has led to some discussion on adopting measures to reduce these emissions. This has caused some stress in the beef industry, as some of these proposed solutions could lead to further loss in profits. An European study of the beef sector has investigated the impact of some policy instruments, such as emission taxes, and has suggested that while such measures are effective, they would also be financially restrictive to beef producers, or result in high administrative costs for governments (Neufeldt and Schäfer 2008). However, these measures might be unnecessary, as the Manitoba Beef Producers (2011) have indicated that the Manitoba beef producers are willing to undertake alternate management practices to benefit environmental causes if they do not negatively affect their profitability or livelihoods. Therefore, providing methods that lead to lower GHG emissions while providing high levels of profitability, or maintaining current levels of profitability would be considered a welcome set of information for the Manitoba beef cattle producers (and likely producers in other provinces). In order to understand GHG emissions on beef farms, a Canada-wide survey was undertaken in 2012. Financial support for this survey was provided by a variety of interested parties including the University of Manitoba, Alberta Agriculture and Rural Development, the BC Ministry of Agriculture, Manitoba Agriculture Food and Rural Initiatives, and Agriculture and Agri-Food Canada, with the support of the Beef Cattle Research Council. Researcher Aklilu Alemu from the University of Manitoba used principle component analysis and cluster analysis to create eight clusters of representative farms across the country. Of the eight Canadian clusters, only four clusters had a population greater than one in Manitoba. The centroid from each cluster was chosen as a representative farm for this study. Estimates of GHG emissions from each farm were then determined using Holos, a GHG emission model developed by the Government of Canada. To compare GHG emissions against profitability on a farm, this study evaluated revenues and costs of four Manitoba farms (One each from the four clusters). The revenues included the sale of weaned calves and cull cows, as well as the sale of unused feed and non-feed grain. The costs for the whole farm included the cost to grow feed for the cattle, while operating costs for each of these farms included veterinary, transportation, manure removal, and utility costs. The fixed costs (related to farm structures and machinery) were comprised of depreciation and interest costs. In order to understand the profitability of the beef enterprise as well as the whole farm, the costs and revenues were estimated at three levels: beef enterprise, the whole farm, and the family level. With regards to the beef enterprise, the farm in Cluster Four had the highest level of profitability, at $0.05 per pound of live animal weight sold [or on a per pound sold (PPS) basis]. At the same time, this farm was also able to achieve the lowest GHG emissions, at 2.20 lbs. PPS basis measured in Carbon Dioxide Equivalent (CO2e). The farm with the second lowest level of GHG emissions (9.68 lbs. CO2e on a PPS basis) were estimated for the Cluster Six Farm, which also had the second highest profitability ($0.01 on a PPS basis). When measured at the beef enterprise level, several farms had net GHG emissions. Higher farm level profitability was contributed by a high weaning weight, the lower cost to produce feed, and the strategic purchase of machinery to feed each herd. Lower emissions were noted on farms with tame pastureland and greater amounts of forage with alfalfa. Comparing profits and GHG emissions at the whole farm level showed different results. The Cluster Seven farm had the highest level of profitability ($1.53 on a PPS basis) while it was also the largest contributor to GHG emissions (12.16 lbs. CO2e on a PPS basis). Cluster Six farm was the second largest contributor to GHG emissions (7.54 lbs. CO2e on a PPS basis), but also created the least profit on its farm ($0.13 on a PPS basis). The farms with net sequestration (i.e., GHG emissions were negative) were Cluster Four and Cluster One farms. Both of these farms were both able to create profitability. On a PPS basis, Cluster Four farm had the second highest profitability ($0.80 on a PPS Basis) and sequestered second greatest emissions (2.38 lbs CO2e on a PPS basis). Cluster One farm had the second lowest profitability ($0.33 on a PPS basis) and sequestered the most GHGs (30.17 lbs CO2e on a PPS basis). Increases in the level of net sequestration were due to tame pastureland and large amounts of unused hay growth which included legumes such as alfalfa. Increases in profitability were due to the sale of non-feed grains, feed grains or hay, as well as other factors noted above regarding the beef enterprise. These findings suggest that Manitoba beef producers could provide greater profitability and lower GHG emissions if they increased their weaning weights, increased the size of their herds, invested in tame pastureland when possible, and cut their forage several times throughout the growing season. Since this study is based on a single farm from four clusters, additional research is necessary. This may include studying several farms in each cluster in order to determine variability in long-term feed production, as well as in costs and revenues.