Thesis (MBA)--Stellenbosch University, 2009. / ENGLISH ABSTRACT: The purpose of this report is to establish whether a statistically significant relationship exists between a company's profitability and its working capital management. Profitability is measured by the return on assets, return on equities and Tobin's q ratio - the dependent variables in the report. Working capital management is assessed by inventory period, receivable period, payable period, operating cycle, cash conversion cycle and operating cash flow to total assets ratio - the independent variables in the report. Other independent variables applied are leverage and real gross domestic product growth rate. The report used a sample of working capital intensive companies listed on the Johannesburg Stock Exchange for the period of 1995-2005. These companies are divided into four sub-samples based on their working capital intensiveness. Companies with a ratio of current assets to total assets ranging from 0% to 24,99%, and from 25,00% to 49,99% are regarded as less working capital intensive. Companies with a ratio of current assets to total assets ratio ranging from 50,00% to 74.99%, and from 75,00% to 100.00% are considered high working capital intensive. The results of this research reveal that there is a positive statistically significant relationship between profitability and operating cash flow to total assets ratio. Therefore, companies with positive operating cash flow figures are likely to be profitable. The results exhibit a negative relationship between profitability and leverage. This is an indication that in order to increase its profitability, a company needs to reduce its debt ratio and keep it within the optimum capital structure level. The relationship between profitability and other independent variables is not consistent, indicating variation in working capital policies across industries. There is also a positive relationship between profitability and real GDP growth rate, although this is reflected during 2000 only. This indicates that companies' profitability is influenced by the overall economic performance. The report further evaluates whether less working capital intensive companies are more profitable as compared to high working capital intensive companies. Evidence shows that there is no difference in the profitability of less working capital intensive companies and high working capital intensive companies. However, there is confirmation that less working capital intensive companies have a high Tobin's q ratio as compared to high working capital intensive companies. This means that the percentage difference between the market value and assets is higher for less working capital intensive companies as compared to that of high working capital intensive companies. / AFRIKAANSE OPSOMMING: Die doel van hierdie verslag is om vas te stel of 'n statisties betekenisvolle verhouding tussen die winsgewendheid en die bedryfskapitaal bestuur van 'n maatskappy bestaan. Winsgewendheid word gemeet aan die opbrengs op bates, opbrengs op aandeelhouersbelang en Tobin se q-verhouding - die afhanklike veranderlikes in die verslag. Bedryfskapitaal bestuur word gemeet deur voorraadperiode, debiteursperiode, krediteursperiode, operasionele siklus, kontantomsettingsilkus en kontantvloei uit bedryfsaktiwiteite tot totale bates-verhouding - die onafhanklike veranderlikes in die verslag - te bepaal. Ander onafhanklike veranderlikes aangewend is skuldkapitaal verhouding en groei-tempo van die reele binnelandse produk. Die verslag het gebruik gemaak van 'n seleksie van bedryfskapitaal intensiewe maatskappye wat op die Johannesburgse Aandelebeurs genoteer was vir die tydperk 1995-2005. Hierdie maatskappye is in vier sub-groepe verdeel volgens bedryfskapitaal intensiwiteit. Maatskappye met 'n verhouding van bedryfsbates tot totale bates tussen 0% en 24,99%. en 25,00% tot 49,99% word as minder bedryfskapitaal intensief beskou, terwyl maatskappye waar hierdie verhouding tussen 50,00% en 74,99%, en 75,00% en 100,00% Iê as hoogs bedryfskapitaal intensief beskou word. Die resultate van hierdie navorsing dui op 'n statisties betekenisvolle verhouding- tussen winsgewendheid en die verhouding van kontantvloei uit bedryfsaktiwiteite tot fatale bates. Dus is maatskappye met positiewe kontantvloei-syfers uit bedryfsaktiwiteite waarskynlik winsgewend. Die resultate dui op 'n negatiewe verhouding tussen winsgewendheid en skuldkapitaal-verhouding, wat daarop dui dat 'n maatskappy die skuld-verhouding moet verminder en binne die optimale kapitaalstruktuur vlak te bly om winsgewendheid te vcrbeter. Die verhouding tussen winsgewendheid en ander onafhanklike veranderlikes is nie konstant nie, wat op beleidsverskille dui ten opsigte van bedryfskapitaal tussen verskillende nywerhede. Daar is 'n positiewe verhouding tussen winsgewendheid en groei in reele binnelandse produk, selfs al word hierdie verhouding slegs gedurende 2000 gesien. Dit dui daarop dat die winsgewendheid van maatskappye beinvloed word deur die algehele ekonomiese toestand. Die navorsing ondersoek verder of minder bedryfskapitaal intensiewe maatskappye meer winsgewend is as meer bedryfskapitaal intensiewe maatskappye. Resultate dui geen verskil tussen die winsgewendheid van minder bedryfskapitaal intensiewe maatskappye en meer bedryfskapitaal intensiewe maatskappye aan nie, maar bevestig wel dat minder bedryfskapitaal intensiewe maatskappye 'n hoër Tobin se q-verhouding toon. Dit beteken dat die persentasie verskil tussen markwaarde en totale bates hoër is vir minder bedryfskapitaal intensiewe maatskappye as vir meer bedryfskapitaal intensiewe maatdkappye.

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We investigate whether dividend changes signal firms’ future profitability by considering firms’ earnings volatility and examining how earnings volatility affects dividend signaling. In general, we find a positive relation between dividend increases on firms’ future earnings. In other words, dividend increases tend to signal positive changes in future earnings. However, the effect largely depends on the firms’ earnings volatility such that higher earnings volatility tends to miti-gate the signaling effect of dividend increases on future earnings. Specifically, for firms that have high earnings volatility, dividend increases seem to signal a reduction in future earnings vol-atility rather than an increase in future earnings. On the other hand, we find no consistent results for dividend decreases. Our findings have three main implications: 1) The traditional dividend signaling theory is valid; 2) the effect of signaling depends on a firm’s earnings volatility; 3) for high-volatility firms, positive dividend changes signal earnings volatility reductions rather than earnings increases.

Petroleum industries in the U.S. attract increased scrutiny from governmental bodies, businesses, and the civil society for their lack of sustainability practices, such as air emissions control, the use of cleaner fuels, and water pollution mitigation. Although the short-term cost of implementing these practices may be high as stated by a sample of the industry's leaders, long-term benefits include lower business costs and a reduction of the adverse impacts on society, the environment, and the economy. This multiple-case study highlighted the practices of several petroleum industry leaders who demonstrated an exception to these practices-who have been clear thought leaders in the delivery of both environmental sustainability and profitability. Data collection included in-depth interviews with 16 purposively selected petroleum business participants supplemented by a review of archival records containing annual sustainability reports. The participants were experts who practiced sustainability as part of their work-related activities. Data saturation occurred when no new data or patterns emerged. Methodological triangulation occurred as evidenced by the convergence of data from the different sources. Yin's 5-step analysis, which guided the coding process, yielded 3 main themes: environmental air quality, fuel, and water. These themes aligned with practices identified from the review of 20 archival reports across a 5-year period. Key practices identified from the archival records included flaring reduction, natural gas utilization, and water re-cycling. The implications for positive social change include the potential for the preservation of resources for present and future generations when all companies operating in the petroleum industry embrace sustainability.

Forty eight crossbred steers (BW = 296 ± 16.7 kg) were fed four dietary treatments for 56 d: AL-LS (low starch diet fed ad libitum for a rate of gain of 1 kg/d), AL-HS (high starch diet fed ad libitum), LF-HS (a limit fed high starch diet designed to be isocaloric with AL-LS), and AL-IS (a diet fed ad libitum for the midpoint daily energy intake between AL-LS and AL-HS). On d 57 all steers were placed on AL-HS for finishing until d 140. Steers that consumed more total energy (AL-HS and AL-IS) throughout production achieved greater carcass fatness in the end of the 140 d period, although these responses were difficult to evaluate via real-time ultrasound measurements. No differences in insulin and glucose kinetics were observed. Data suggested that energy source may influence energy partitioning during the growing period, but these effects may be overcome by differences in energy intake. Higher marbling scores (AL-HS and AL-IS) rewarded higher grid values and greater premiums, which increased profitability. This data set was also used for a model evaluation that showed that mathematical models (CVDS and NRC) were able to explain most of the variation in individual feed requirements of group- fed growing and finishing cattle. Another data set was used for evaluation of a decision support system Cornell Net Carbohydrate and Protein System (CNCPS) as a tool to minimize nutrient excretion from fed cattle. One-hundred eight-four group- fed steers were fed a 13% crude protein (CP) diet until reaching 567 kg of BW, when their diets were either maintained at 13% or reduced to 11.5% or 10% CP. Data from the second half of the experiment were modeled to predict urinary, fecal, and total N excretion. As dietary CP decreased from 13 to 11.5%, the model indicated a total N excretion of 16%. An even greater reduction in total N excretion (26%) occurred when dietary CP was decreased from 11.5% to 10%. The overall decrease from 13 to 10% CP resulted in a reduction of total N excretion by 38%. Data suggest that decision support sys tems can be used to assist in balancing diets to meet environment restriction.

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The financial state of the most companies was significantly challenged by the last decade. Thus, financial managers must be aware of all factors that can contribute to the firm`s profitability in order to fight unstable economical environment. Working capital management`s effect on profitability has been raised recently and its importance is already known. This thesis aims to dig deeper into the relationship between working capital management and firm`s profitability across different sectors and different time periods. The subject for the empirical analysis are 908 UK manufacturing and 315 construction firms during the period of 2006-2013. The results indicate about the strong negative relationship between working capital, measured as cash conversion cycle (CCC) and gross operating profitability. Thus, it is an indicator that working capital and its characteristics must be included in the firm`s financial planning.

Agritourism in Virginia is a rapidly growing industry that adds additional income to a farming operation, and helps mitigate risk. Therefore it has become a good strategy for farmers to generate higher levels of profit, but much of the literature in Virginia and surrounding states focuses more on the motivations of operators for starting their agritourism venture. Thus, the purpose of this paper is to empirically analyze demographic, operational, and financial factors and evaluate their correlation with higher levels of profit. The first step was to apply key factors in industrial location discussed by Sloagett and Woods (2003) to agritourism in Virginia. Next, a survey was conducted to produce primary source data on Virginia agritourism operators and how these success factors relate to their ventures. Initial findings suggest a very homogenous demographic amongst operators. In addition, there were four other main findings. First, promotion is highly important and there is a need for increased road signage in Virginia. Second, additional income is a large motivator among operators and 76% of operations indicated their business was somewhat profitable. Third, those near the metropolitan areas of Virginia Beach, Roanoke, and Washington, D.C. tended to have the highest perceived profitability. Finally, operators are highly afflicted by obstacles such as road signage, finding qualified employees, and taxation, all of which can be addressed or mitigated by the state government. The final portion of this paper tests the relationship between these factors and profitability of agritourism operations in Virginia. The empirical results reveal that those operators with a motivation for addition income and higher levels of education, with more acreage, with a higher percentage of their gross farm income attributed to agritourism, and those, on average, that have greater money spent per visitor all correlate with higher levels of profit. On the other hand, the following characteristics appear to have a negative effect on agritourism profits: wineries, greater estimated time to the nearest interstate and difficult access to capital. Assuming operators of agritourism venues seek to maximize profits, these findings illustrate to current and future operators how to adjust procedures and improve their business strategies. / Master of Science

While previous research has primarily focused on post-Merger & Acquisition (M&A) effects, influential factors, which trigger cross-border M&A transactions and whether the level of industry concentration play a key role in making the decision, have been largely neglected in research. This study aims to close this gap in research and investigates the influence of industry concentration on cross-border M&A decisions, including effects of profitability and corporate governance. The studied sample consists of 1105 companies across 48 countries, whereas 533 undertook cross-border M&A transactions across 40 countries. A logistic regression was used to predict the probability of cross-border M&A transactions. The study analyzed the effects on both the complete sample and on M&A companies only. The results indicate that large companies are more likely to undertake cross-border M&A with companies from a different industry in order to spread their level of risk. However, MNCs, which undertake transactions, are less likely to perform more transactions within one year. Over the time of observation the analysis revealed that market share did not change and thus, industries are not getting more concentrated in general, indicating that markets remain competitive. Multinational companies (MNCs), which have a higher market position and are more profitable, are less likely to undertake corporate restructuring, which was partially supported in this analysis. For both samples the findings do not support that the interaction between industry concentration and corporate governance have an influence on cross-border M&A. These findings increase the understanding of the role of industry concentration, profitability and corporate governance and that they do not play a crucial role in making cross-border M&A decisions.