Aggregate economy risk and company failure: An examination of UK quoted firms

Considerable attention has been directed in the recent finance and economics literature to issues concerning the effects on company failure risk of changes in the macroeconomic environment. This paper examines the accounting ratio-based and macroeconomic determinants of insolvency exit of UK large industrials during the early 1990s with a view to improve understanding of company failure risk. Failure determinants are revealed from estimates based on a cross-section of 369 quoted firms, which is followed by an assessment of predictive performance based on a series of time-to-failure-specific logit functions, as is typical in the literature. Within the traditional for cross-sectional data studies framework, a more complete model of failure risk is developed by adding to a set of traditional financial statement-based inputs, the two variables capturing aggregate economy risk - one-year lagged, unanticipated changes in the nominal interest rate and in the real exchange rate. Alternative estimates of prediction error are obtained, first, by analytically adjusting the apparent error rate for the downward bias and, second, by generating holdout predictions. More complete, augmented with the two macroeconomic variables models demonstrate improved out-ofestimation- sample classificatory accuracy at risk horizons ranging from one to four years prior to failure, with the results being quite robust across a wide range of cut-off probability values, for both failing and non-failed firms. Although in terms of the individual ratio significance and overall predictive accuracy, the findings of the present study may not be directly comparable with the evidence from prior research due to differing data sets and model specifications, the results are intuitively appealing. First, the results affirm the important explanatory role of liquidity, gearing, and profitability in the company failure process. Second, the findings for the failure probability appear to demonstrate that shocks from unanticipated changes in interest and exchange rates may matter as much as the underlying changes in firm-specific characteristics of liquidity, gearing, and profitability. Obtained empirical determinants suggest that during the 1990s recession, shifts in the real exchange rate and rises in the nominal interest rate, were associated with a higher propensity of industrial company to exit via insolvency, thus indicating links to a loss in competitiveness and to the effects of high gearing. The results provide policy implications for reducing the company sector vulnerability to financial distress and failure while highlighting that changes in macroeconomic conditions should be an important ingredient of possible extensions of company failure prediction models

Aggregate economy risk and company failure: An examination of UK quoted firms in the early 1990s

Considerable attention has been directed in the recent finance and economics literature to issues concerning the effects on company failure risk of changes in the macroeconomic environment. This paper examines the accounting ratio-based and macroeconomic determinants of insolvency exit of UK large industrials during the early 1990s with a view to improve understanding of company failure risk. Failure determinants are revealed from estimates based on a cross-section of 369 quoted firms, which is followed by an assessment of predictive performance based on a series of time-to-failure-specific logit functions, as is typical in the literature. Within the traditional for cross-sectional data studies framework, a more complete model of failure risk is developed by adding to a set of traditional financial statement-based inputs, the two variables capturing aggregate economy risk - one-year lagged, unanticipated changes in the nominal interest rate and in the real exchange rate. Alternative estimates of prediction error are obtained, first, by analytically adjusting the apparent error rate for the downward bias and, second, by generating holdout predictions. More complete, augmented with the two macroeconomic variables models demonstrate improved out-ofestimation- sample classificatory accuracy at risk horizons ranging from one to four years prior to failure, with the results being quite robust across a wide range of cutoff probability values, for both failing and nonfailed firms. Although in terms of the individual ratio significance and overall predictive accuracy, the findings of the present study may not be directly comparable with the evidence from prior research due to differing data sets and model specifications, the results are intuitively appealing. First, the results affirm the important explanatory role of liquidity, gearing, and profitability in the company failure process. Second, the findings for the failure probability appear to demonstrate that shocks from unanticipated changes in interest and exchange rates may matter as much as the underlying changes in firm-specific characteristics of liquidity, gearing, and profitability. Obtained empirical determinants suggest that during the 1990s recession, shifts in the real exchange rate and rises in the nominal interest rate, were associated with a higher propensity of industrial company to exit via insolvency, thus indicating links to a loss in competitiveness and to the effects of high gearing. The results provide policy implications for reducing the company sector vulnerability to financial distress and failure while highlighting that changes in macroeconomic conditions should be an important ingredient of possible extensions of company failure prediction models

Arguments for exception in US security discourse

In his influential State of Exception, Giorgio Agamben proposes that, even in apparently liberal western democracies, the state will routinely use the contingency of national emergency to suspend civil liberties and justify expansion of military and police powers. We investigated rhetorical strategies deployed in the web pages of US security agencies, created or reformed in the aftermath of the 9/11 events, to determine whether they present argumentation conforming to Agamben’s model. To expose rhetorical content, we examined strategies operating at two levels within our corpus. Argument schemes and underlying warrants were identified through close examination of systematically selected core documents. Semantic fields establishing themes of threat and danger were also explored, using automatic corpus tools to expose patterns of lexical selection established across the whole corpus. The study recovered evidence of rhetoric broadly consistent with the logic predicted by State of Exception theory, but also presented nuanced findings whose interpretation required careful re-appraisal of core ideas within Agamben’s work

Charge regulation and ionic screening of patchy surfaces

The properties of surfaces with charge-regulated patches are studied using non-linear Poisson-Boltzmann theory. Using a mode expansion to solve the non-linear problem efficiently, we reveal the charging behaviour of Debye-length sized patches. We find that patches charge up to higher charge densities if their size is relatively small and if the patches are well separated. The numerical results are used to construct a basic analytical model which predicts the average surface charge density on surfaces with patchy chargeable groups.Comment: 9 figure

Structure, substrate recognition and reactivity of Leishmania major mevalonate kinase

This research was supported by the German Academic Exchange Service (DAAD), the Wellcome Trust (TKS and WNH as Trust Senior Research fellows), the Biotechnology and Biological Science Research Council (Structural Proteomics of Rational Targets) and the European Synchrotron Radiation Facility.Background: Isoprenoid precursor synthesis via the mevalonate route in humans and pathogenic trypanosomatids is an important metabolic pathway. There is however, only limited information available on the structure and reactivity of the component enzymes in trypanosomatids. Since isoprenoid biosynthesis is essential for trypanosomatid viability and may provide new targets for therapeutic intervention it is important to characterize the pathway components. Results: Putative mevalonate kinase encoding genes from Leishmania major (LmMK) and Trypanosoma brucei (TbMK) have been cloned, over-expressed in and proteins isolated from procyclic-form T. brucei. A highly sensitive radioactive assay was developed and shows ATP-dependent phosphorylation of mevalonate. Apo and (R)-mevalonate bound crystal structures of LmMK, from a bacterial expression system, have been determined to high resolution providing, for the first time, information concerning binding of mevalonate to an MK. The mevalonate binds in a deep cavity lined by highly conserved residues. His25 is key for binding and for discrimination of (R)-over (S)-mevalonate, with the main chain amide interacting with the C3 hydroxyl group of ( R)mevalonate, and the side chain contributing, together with Val202 and Thr283, to the construction of a hydrophobic binding site for the C3 methyl substituent. The C5 hydroxyl, where phosphorylation occurs, points towards catalytic residues, Lys18 and Asp155. The activity of LmMK was significantly reduced compared to MK from other species and we were unable to obtain ATP-binding data. Comparisons with the rat MK:ATP complex were used to investigate how this substrate might bind. In LmMK, helix alpha 2 and the preceding polypeptide adopt a conformation, not seen in related kinase structures, impeding access to the nucleotide triphosphate binding site suggesting that a conformational rearrangement is required to allow ATP binding. Conclusion: Our new structural information, consistent with data on homologous enzymes allows a detailed description of how mevalonate is recognized and positioned for catalysis in MK. The mevalonate-binding site is highly conserved yet the ATP-binding site is structurally distinct in LmMK. We are unable to provide a definitive explanation for the low activity of recombinant protein isolated from a bacterial expression system compared to material isolated from procyclic-form Trypanosoma brucei.Publisher PDFPeer reviewe

How Efficient is Rotational Mixing in Massive Stars ?

The VLT-Flames Survey for Massive Stars (Evans05,Evans06) provides recise measurements of rotational velocities and nitrogen surface abundances of massive stars in the Magellanic Clouds. Specifically, for the first time, such abundances have been estimated for stars with significant rotational velocities. This extraordinary data set gives us the unique possibility to calibrate rotationally and magnetically induced mixing processes. Therefore, we have computed a grid of stellar evolution models varying in mass, initial rotational velocity and chemical composition. In our models we find that although magnetic fields generated by the Spruit-Taylor dynamo are essential to understand the internal angular momentum transport (and hence the rotational behavior), the corresponding chemical mixing must be neglected to reproduce the observations. Further we show that for low metallicities detailed initial abundances are of prime importance, as solar-scaled abundances may result in significant calibration errors.Comment: To appear in the proceedings of "First Stars III", Santa Fe, New Mexico, July 16-20, 2007, 3 pages, 3 figure

How Efficient is Rotational Mixing in Massive Stars ?

The VLT-Flames Survey for Massive Stars (Evans05,Evans06) provides recise measurements of rotational velocities and nitrogen surface abundances of massive stars in the Magellanic Clouds. Specifically, for the first time, such abundances have been estimated for stars with significant rotational velocities. This extraordinary data set gives us the unique possibility to calibrate rotationally and magnetically induced mixing processes. Therefore, we have computed a grid of stellar evolution models varying in mass, initial rotational velocity and chemical composition. In our models we find that although magnetic fields generated by the Spruit-Taylor dynamo are essential to understand the internal angular momentum transport (and hence the rotational behavior), the corresponding chemical mixing must be neglected to reproduce the observations. Further we show that for low metallicities detailed initial abundances are of prime importance, as solar-scaled abundances may result in significant calibration errors.Comment: To appear in the proceedings of "First Stars III", Santa Fe, New Mexico, July 16-20, 2007, 3 pages, 3 figure

Unconstrained video monitoring of breathing behavior and application to diagnosis of sleep apnea

This paper presents a new real-time automated infrared video monitoring technique for detection of breathing anomalies, and its application in the diagnosis of obstructive sleep apnea. We introduce a novel motion model to detect subtle, cyclical breathing signals from video, a new 3-D unsupervised self-adaptive breathing template to learn individuals' normal breathing patterns online, and a robust action classification method to recognize abnormal breathing activities and limb movements. This technique avoids imposing positional constraints on the patient, allowing patients to sleep on their back or side, with or without facing the camera, fully or partially occluded by the bed clothes. Moreover, shallow and abdominal breathing patterns do not adversely affect the performance of the method, and it is insensitive to environmental settings such as infrared lighting levels and camera view angles. The experimental results show that the technique achieves high accuracy (94% for the clinical data) in recognizing apnea episodes and body movements and is robust to various occlusion levels, body poses, body movements (i.e., minor head movement, limb movement, body rotation, and slight torso movement), and breathing behavior (e.g., shallow versus heavy breathing, mouth breathing, chest breathing, and abdominal breathing). © 2013 IEEE

Structures of bacterial kynurenine formamidase reveal a crowded binuclear zinc catalytic site primed to generate a potent nucleophile

Tryptophan is an important precursor for chemical entities that ultimately support the biosynthesis of key metabolites. The second stage of tryptophan catabolism is catalysed by kynurenine formamidase, an enzyme that is different between eukaryotes and prokaryotes. In the present study, we characterize the catalytic properties and present the crystal structures of three bacterial kynurenine formamidases. The structures reveal a new amidase protein fold, a highly organized and distinctive binuclear Zn2+ catalytic centre in a confined, hydrophobic and relatively rigid active site. The structure of a complex with 2-aminoacetophenone delineates aspects of molecular recognition extending to the observation that the substrate itself may be conformationally restricted to assist binding in the confined space of the active site and for subsequent processing. The cations occupy a crowded environment, and, unlike most Zn2+ -dependent enzymes, there is little scope to increase co-ordination number during catalysis.We propose that the presence of a bridging water/hydroxide ligand in conjunction with the placement of an active site histidine supports a distinctive amidation mechanism.</p