Abstract: In the era of big data, public investors are faced with more complicated information related to investment decisions than ever before. To survive in the fierce competition, it has become increasingly urgent for investors to combine multi-source knowledge and evaluate the companies’ true value efficiently. For this, a rule-based ontology reasoning method is proposed to support steel companies’ value assessment. Considering the delay in financial disclosure and based on cost-benefit analysis, this paper introduces the supply chain enterprises financial analysis and constructs the ontology model used to value the value of steel company. In addition, domain knowledge is formally expressed with the help of Web Ontology Language (OWL) language and SWRL (Semantic Web Rule Language) rules. Finally, a case study on a steel company in China proved the effectiveness of the method we proposed.
Abstract: One of the most important roles of financial reporting is improving the firms’ investment decisions; however, there is not much supporting evidence for this claim in emerging markets like Iran. In this study, the effect of financial reporting transparency in investment efficiency of Iranian firms has been investigated. In order to do this, 336 listed companies on Tehran Stock Exchange (TSE) has been selected for time period 2012 to 2015 as research sample. For testing our main hypothesis, we classified sample firms into two groups based on their deviation from expected investment: under-investment and over-investment cases. The results indicate that there is positive significant relationship between financial transparency and investment efficiency. In the other words, transparency can mitigate both underinvestment and overinvestment situations.
Abstract: Stock investment decisions are often made based on current events of the global economy and the analysis of historical data. Conversely, visual representation could assist investors’ gain deeper understanding and better insight on stock market trends more efficiently. The trend analysis is based on long-term data collection. The study adopts a hybrid method that combines the Clustering algorithm and Force-directed algorithm to overcome the scalability problem when visualizing large data. This method exemplifies the potential relationships between each stock, as well as determining the degree of strength and connectivity, which will provide investors another understanding of the stock relationship for reference. Information derived from visualization will also help them make an informed decision. The results of the experiments show that the proposed method is able to produced visualized data aesthetically by providing clearer views for connectivity and edge weights.
Abstract: Strategic investment decisions are characterized by
high innovation potential and long-term effects on the
competitiveness of enterprises. Due to the uncertainty and risks
involved in this complex decision making process, the need arises for
well-structured support activities. A method that considers cost and
the long-term added value is the cost-benefit effectiveness estimation.
One of those methods is the “profitability estimation focused on
benefits – PEFB”-method developed at the Institute of Management
Cybernetics at RWTH Aachen University. The method copes with
the challenges associated with strategic investment decisions by
integrating long-term non-monetary aspects whilst also mapping the
chronological sequence of an investment within the organization’s
target system. Thus, this method is characterized as a holistic
approach for the evaluation of costs and benefits of an investment.
This participation-oriented method was applied to business
environments in many workshops. The results of the workshops are a
library of more than 96 cost aspects, as well as 122 benefit aspects.
These aspects are preprocessed and comparatively analyzed with
regards to their alignment to a series of risk levels. For the first time,
an accumulation and a distribution of cost and benefit aspects
regarding their impact and probability of occurrence are given. The
results give evidence that the PEFB-method combines precise
measures of financial accounting with the incorporation of benefits.
Finally, the results constitute the basics for using information
technology and data science for decision support when applying
within the PEFB-method.
Abstract: This paper proposes a linear model for optimizing
domestic energy consumption in Romania. The particularity of the
model is that it is putting in competition both tangible technologies
and thermal insulation projects with different financing modes.
The model is optimizing the energy system by minimizing the
global discounted cost in household sector, by integrating residential
lighting, space heating, hot water, combined space heating – hot
water, as well as space cooling, in a monolithic model. Another
demand sector included is the passenger transport.
This paper focuses on space heating part, analyzing technical and
economic issues related to investment decisions to envelope and
insulate buildings, in order to minimize energy consumption.
Abstract: This work proposes a fuzzy methodology to support
the investment decisions. While choosing among competitive
investment projects, the methodology makes ranking of projects
using the new aggregation OWA operator – AsPOWA, presented in
the environment of possibility uncertainty. For numerical evaluation
of the weighting vector associated with the AsPOWA operator the
mathematical programming problem is constructed. On the basis of
the AsPOWA operator the projects’ group ranking maximum criteria
is constructed. The methodology also allows making the most
profitable investments into several of the project using the method
developed by the authors for discrete possibilistic bicriteria problems.
The article provides an example of the investment decision-making
that explains the work of the proposed methodology.
Abstract: The primary purpose of this study is to understand the differences in the relationship between working capital management efficiency, working capital investment decisions and working capital finance decisions and the profitability of firms within the context of two African developing economies, Kenya and Nigeria. The study finds that there is a significant difference in the relationship between the firm’s profitability and the working capital variables which suggests different challenges for working capital management in each of these countries.
Abstract: Majority of Business Software Systems (BSS)
Development and Enhancement Projects (D&EP) fail to meet criteria
of their effectiveness, what leads to the considerable financial losses.
One of the fundamental reasons for such projects- exceptionally low
success rate are improperly derived estimates for their costs and time.
In the case of BSS D&EP these attributes are determined by the work
effort, meanwhile reliable and objective effort estimation still appears
to be a great challenge to the software engineering. Thus this paper is
aimed at presenting the most important synthetic conclusions coming
from the author-s own studies concerning the main factors of
effective BSS D&EP work effort estimation. Thanks to the rational
investment decisions made on the basis of reliable and objective
criteria it is possible to reduce losses caused not only by abandoned
projects but also by large scale of overrunning the time and costs of
BSS D&EP execution.
Abstract: Real options theory suggests that managerial flexibility embedded within irreversible investments can account for a significant value in project valuation. Although the argument has become the dominant focus of capital investment theory over decades, yet recent survey literature in capital budgeting indicates that corporate practitioners still do not explicitly apply real options in investment decisions. In this paper, we explore how real options decision criteria can be transformed into equivalent capital budgeting criteria under the consideration of uncertainty, assuming that underlying stochastic process follows a geometric Brownian motion (GBM), a mixed diffusion-jump (MX), or a mean-reverting process (MR). These equivalent valuation techniques can be readily decomposed into conventional investment rules and “option impacts", the latter of which describe the impacts on optimal investment rules with the option value considered. Based on numerical analysis and Monte Carlo simulation, three major findings are derived. First, it is shown that real options could be successfully integrated into the mindset of conventional capital budgeting. Second, the inclusion of option impacts tends to delay investment. It is indicated that the delay effect is the most significant under a GBM process and the least significant under a MR process. Third, it is optimal to adopt the new capital budgeting criteria in investment decision-making and adopting a suboptimal investment rule without considering real options could lead to a substantial loss in value.
Abstract: Literature reveals that many investors rely on technical trading rules when making investment decisions. If stock markets are efficient, one cannot achieve superior results by using these trading rules. However, if market inefficiencies are present, profitable opportunities may arise. The aim of this study is to investigate the effectiveness of technical trading rules in 34 emerging stock markets. The performance of the rules is evaluated by utilizing White-s Reality Check and the Superior Predictive Ability test of Hansen, along with an adjustment for transaction costs. These tests are able to evaluate whether the best model performs better than a buy-and-hold benchmark. Further, they provide an answer to data snooping problems, which is essential to obtain unbiased outcomes. Based on our results we conclude that technical trading rules are not able to outperform a naïve buy-and-hold benchmark on a consistent basis. However, we do find significant trading rule profits in 4 of the 34 investigated markets. We also present evidence that technical analysis is more profitable in crisis situations. Nevertheless, this result is relatively weak.