Gez petrol station: Spreadsheet modelling for capital budgeting

Purpose – This case requires students to prepare a good financial model to find the net present value of the business and make a capital budgeting decision, using Excel spreadsheet.In order to prepare the capital budget, students need to prepare a cash flow statement by business segments.The financial model should be sufficiently flexible to allow various what if analysis to be performed.Students should be able to apply what if analysis tools in Excel such as Goal Seek and Data Tables.Design/methodology/ approach - The operational and financial data are obtained from the owner of Baron Service Station. Other data are obtained through interviews with the area manager of GEZ Berhad and websites of the relevant institutions.Findings – The case is suitable for Management Accounting, Financial Modelling, Integrated Case Study, Financial Management courses, both at the undergraduate and postgraduate levels, and Executive Development Programme on Entrepreneurship for business entrepreneurs and sole proprietors.Value of the paper – This case is expected to enhance students’ critical thinking and enablethem to integrate IT in decision making decisions.This is one of the avenues where lecturers can integrate IT in teaching and learning, in line with the requirements of the accounting profession and Ministry of Education of Malaysia. Besides being able to design a financial model, students at the same time should be able to assume the role of a user and use the model in making business decisions

Hedging activities information and risk management committee effectiveness: Malaysian evidence

This study examines the extent of information about hedging activities disclosures within the annual reports of Main Market companies listed on Bursa Malaysia. The extent of hedging activities disclosures is captured through a 32-item-template, which consists of a mandatory and voluntary disclosure scores. The results of this study indicate that the extent of information on hedging activities disclosure is still insufficient among the sampled companies even though the disclosure scored is quite high. This study also examines the relationship between the existence of risk management committee (RMC), its characteristics and the extent of information on hedging activities disclosure in two separate statistical models. The regression results imply that the existence of RMC is positive but does not significantly influence the extent of information on hedging activities disclosure. However its characteristics (i.e. RMC independence and RMC meeting) have a significant influence. The findings may provide some meaningful insights to regulators, policymakers and researchers, towards the establishment of RMC as a part of the internal corporate governance mechanisms. In addition to its existence, the effectiveness of RMC also needs to be emphasized

Kesan pengumuman pengambilalihan terhadap harga saham di Bursa Saham Kuala Lumpur

This paper investigates the effect of acquisition's announcements on the stock prices of the acquiring firms, around the announcement dates. Announcements made during the period 1983 to 1987 were included in this study. The result shows that there is no significant difference in the price change of the acquiring firms during the period, as compared to other firms in the market

Corporate tax disclosure: A review of concepts, theories, constraints, and benefits

The aim of this paper is to offer an impression of the issues raised by the disclosure of companies’ tax information by supplying existing and historical viewpoints from the aspects of concepts, theory, constraints, benefits and measurements. We are concerned that full disclosure of organizations' tax information could result in firms weakening tax information, hampering tax enforcement, and maybe, in a weakened structure, disclosing private data that could give a competitive benefit to those organizations that are not requested to do such a disclosure. Hence, some studies do not underpin full disclosure. On the other hand, full tax disclosure could have numerous beneficial impacts. It might put pressure on regulators to develop the tax system and it might incite companies to oppose aggressive tax decrease strategies.We anticipate and expect interested parties to take into consideration the best practices of tax disclosure in implementing their future plans

Audit commitee effectiveness among Malaysian listed companies

This study investigates further the previous paper by Shamsul Nahar and Al-Murisi (1997) by examining the interavtive effects of the variables in that paper and introducing other variables associated with corporate governance and political costs. The present study postulated that percentage of external directors on audit committee interacted with the presence of an accountant on audit committe and with the number of years and audit committe in existence, respectively, to influence audit committee effectiveness. The study also posited that the interaction of the presence of an accountant on audit committee and the number of years an audit committee in existence positively and significantly influenced audit committee effectiveness

Social and Environmental Disclosure in the Annual Reports of Jordanian Companies

Recently, much attention has been devoted by researchers to study social and environmentaldisclosure among corporations. Most of the studies were conducted in developed countries,with only a handful being undertaken in developing countries. This study aims to investigatethe extent of social and environmental disclosure in the annual reports of Jordanian companiesand examine if the level of disclosure is influenced by size of firm, government ownership andindustry. In particular, disclosure with regard to environmental issues, community involvementand human resource are examined. Using a sample of 60 companies in the manufacturing andservice sectors, content analysis is used to measure the level of disclosure. The findings indicatethat 85% of the companies somehow disclose social and environmental information. Humanresource is the most disclosed theme while the environmental issue had the lowestdisclosure among the companies. In addition, a significant positive association is found betweencompany size and social and environmental disclosure, and companies with high governmentownership tend to have a lower level of disclosure compared to companies with low governmentownership. On the overall, no significant relationship was found between industry typeand the level of social and environmental disclosure. However, when only environmental issuesare examined, manufacturing companies tend to disclose more of the items compared to servicecompanies. Copyright © www.iiste.or

Can independent directors prevent abusive related party transactions?

Abusive related party transactions (RPTs) have been highlighted as one of the major concerns after the 1997 Asian financial crisis.Since the crisis, many reforms to the law and regulation systems have been taken by the Asian countries, including Malaysia, to curb abusive RPTs.A key problem with RPTs is that the transactions are influenced by the relationship between parties involved in the transactions.Many abusive RPTs cases in Asia, such as Satyam Computers Ltd (India), Transmile Group Berhad (Malaysia), Asia Pulp and Paper (Indonesia) and others, demonstrate how these transactions ultimately benefited the top management and controlling shareholders. Therefore, an area of concern with regard to this issue is a mechanism that can constrain the insiders from engaging in abusive RPTs.Many jurisdictions have placed greater reliance on the institution of independent directors (INEDs) to protect the interest of shareholders.INEDs, being independent from the influence of the insiders, are expected to balance and limit the strong power and incentives of managers and controlling shareholders, thereby effectively prevent abusive RPTs.However, prior studies provide mixed results on whether INEDs are effective monitors. We argue that for INEDs to function effectively, it is not enough just to be independent.Certain INEDs attributes, namely the composition of INEDs, their financial expertise, length of service (INEDs tenure) and the presence of women INEDs, will influence INEDs' governance effectiveness. Therefore, this paper aims to review the role of INEDs in monitoring RPTs.It firstly discusses on the issues surrounding RPTs. Further, this paper reviews the regulatory and corporate governance reforms relating to RPTs and the institution of INEDs, with specific attention to the Malaysian context. Based on prior literature, this paper then highlights on how INEDs composition, financial expertise, INEDs tenure and the presence of women INEDs can enhance their monitoring role. The final section concludes the paper

GEZ petrol station: Using cost-volume-profit analysis for planning

As an Area Manager of GEZ Bhd, a major oil company in Malaysia, in 2010, Mr Aiman was responsible for directing the sales activities of more than twenty petrol stations in the northern region of Malaysia.He was also responsible to train petrol station dealers and staff, initiate sales promotion and implement key initiatives to improve sales. Despite being a stable business with continuous increase in vehicles, often times, petrol station operators faced with the difficulty of sustaining the business, leading to the termination of the dealership license.The lack of knowledge in finance and costing, among others, contributed to business failures.Realising the importance of management accounting concepts and tools such as cost allocation and CVP analysis, Mr Aiman believed that the dealers and their relevant staff should have the knowledge in cost accounting.They should be able to differentiate between variable and fixed expenses, prepare a financial statement and perform a cost-volume-profit (CVP) analysis.To help the dealers perform the CVP analysis, an understanding of how to build and use a financial model associated with the analysis is an added advantage.In coming up with the data and building the financial model, Mr Aiman sought the assistance of Rizal, a trained management accountant

Hedging Activities Information and Risk Management Committee Effectiveness: Malaysian evidence

This study examines the extent of information about hedging activities disclosures within the annual reports of Main Market companies listed on Bursa Malaysia. The extent of hedging activities disclosures is captured through a 32-item-template, which consists of a mandatory and voluntary disclosure scores. The results of this study indicate that the extent of information on hedging activities disclosure is still insufficient among the sampled companies even though the disclosure scored is quite high. This study also examines the relationship between the existence of risk management committee (RMC), its characteristics and the extent of information on hedging activities disclosure in two separate statistical models. The regression results imply that the existence of RMC is positive but does not significantly influence the extent of information on hedging activities disclosure. However its characteristics (i.e. RMC independence and RMC meeting) have a significant influence. The findings may provide some meaningful insights to regulators, policymakers and researchers, towards the establishment of RMC as a part of the internal corporate governance mechanisms. In addition to its existence, the effectiveness of RMC also needs to be emphasized

The Effectiveness of Risk Management Committee and Hedge Accounting Practices in Malaysia

This study examines the effectiveness of Risk Management Committee (RMC) in influencing hedge accounting practices among non-financial companies listed on the Bursa Malaysia. Our regression results reveal that that there is no significant relationship between the application of hedge accounting and the effectiveness of RMCs. However, there are positive and significant relationships between the choice of hedge accounting and each of company size and leverage. The implications of the findings were discussed