Manufacturing As A Center For The Creation Of Shareholder Value

A sample of the best manufacturing firms from Industrial Week’s Annual Survey of Manufacturers (2008-2009) is analyzed within the context of a value driver matrix and free cash flow regime that link manufacturing to important determinants of shareholder value.  The framework for analysis developed in association with this analysis relies on the format advocated by Rappaport (1998), whereby a manufacturing value driver map is derived that isolates those variables generally accepted as determinant with respect to manufacturing performance.  This map is subsequently used to identify that subset of variables that have the greatest impact on value and, in turn, to focus on those micro-value drivers over which operations management has a meaningful level of control.  If superior performance measured in terms of the micro-value drivers is an avenue to manufacturing excellence and the creation of shareholder value, one would expect to see statistically significant relationships between these predictor variables (micro-value drivers) and market value.  Here this proposition is tested by way of a simultaneous reverse entry multiple regression analysis where market capitalization (V0) is treated as a function of a set of manufacturing related micro-value drivers

Intrinsic Value vs. Market Price: The Excess Return Period And That Elusive Margin Of Safety

The principle of convergence is well understood and most accept that in the long-term, market price and intrinsic value will converge. At any point in time, however, one may expect to see significant divergence between price and value. This analysis features a cross-sectional examination of 460 of the S&P 500 companies at a time when the market is under extreme duress. Of interest is the extent to which the market prices and intrinsic values of these firms are convergent, the value drivers responsible for the convergence/divergence, and the extent to which changes in the excess return period may influence valuations and, in turn, an investors margin of safety. A discriminant analysis provides a basis for distinguishing between those firms priced above and those priced below their respective intrinsic values and for identifying those variables that account for most of the between-group separation. Subsequently, intrinsic values are derived using different excess return periods and the resulting effect on the margin of safety is observed. Intrinsic values for the sample firms are derived from an estimate of free cash flow to the firm using Rappaports (1998) model

International Diversification And The Cost Of Capital: Is More Necessarily Better?

This study examines the extent to which international diversification is a statistically significant predictor of the cost of capital among S&P 500 firms.  Existing research concerning the “diversification discount” suggests that the financial markets have become enamored with the idea that more tightly focused firms tend to be more profitable and, as a consequence, worth more.  Of interest here is the extent to which this same line of reasoning (i.e., less diversification is better) holds for international diversification.  The argument put forth here is that while international diversification may indeed be an avenue to higher sales and earnings, this may not be enough to enhance the market value of the firm because unless the additional profit yields a return on invested capital above the firm’s cost of capital, and unless that margin is adequate to satisfy existing investors and to attract new capital, the market value of the firm will decline.  To fully understand the likely consequences of broader international diversification or, correspondingly, a tighter strategic focus, one must understand how such diversification is apt to affect the firm’s cost of capital.  This study uses Herfindahl’s index of concentration to measure the degree of international diversification among the S&P 500 firms and this measure is subsequently regressed on the cost of capital.  What distinguishes this research is its focus on the relationship between a firm’s level of international diversification and its cost of capital, a strategically important construct that has been virtually ignored in the literature

A synthesis of three decades of socio-ecological change in False Bay, South Africa: setting the scene for multidisciplinary research and management

Over the past three decades, marine resource management has shifted conceptually from top-down sectoral approaches towards the more systems-oriented multi-stakeholder frameworks of integrated coastal management and ecosystem-based conservation. However, the successful implementation of such frameworks is commonly hindered by a lack of cross-disciplinary knowledge transfer, especially between natural and social sciences. This review represents a holistic synthesis of three decades of change in the oceanography, biology and human dimension of False Bay, South Africa. The productivity of marine life in this bay and its close vicinity to the steadily growing metropolis of Cape Town have led to its socio-economic significance throughout history. Considerable research has highlighted shifts driven by climate change, human population growth, serial overfishing, and coastal development. Upwelling-inducing winds have increased in the region, leading to cooling and likely to nutrient enrichment of the bay. Subsequently the distributions of key components of the marine ecosystem have shifted eastward, including kelp, rock lobsters, seabirds, pelagic fish, and several alien invasive species. Increasing sea level and exposure to storm surges contribute to coastal erosion of the sandy shorelines in the bay, causing losses in coastal infrastructure and posing risk to coastal developments. Since the 1980s, the human population of Cape Town has doubled, and with it pollution has amplified. Overfishing has led to drastic declines in the catches of numerous commercially and recreationally targeted fish, and illegal fishing is widespread. The tourism value of the bay contributes substantially to the country’s economy, and whale watching, shark-cage diving and water sports have become important sources of revenue. Compliance with fisheries and environmental regulations would benefit from a systems-oriented approach whereby coastal systems are managed holistically, embracing both social and ecological goals. In this context, we synthesize knowledge and provide recommendations for multidisciplinary research and monitoring to achieve a better balance between developmental and environmental agendas.https://www.elementascience.orgam2020Mammal Research Institut

Finishing the euchromatic sequence of the human genome

The sequence of the human genome encodes the genetic instructions for human physiology, as well as rich information about human evolution. In 2001, the International Human Genome Sequencing Consortium reported a draft sequence of the euchromatic portion of the human genome. Since then, the international collaboration has worked to convert this draft into a genome sequence with high accuracy and nearly complete coverage. Here, we report the result of this finishing process. The current genome sequence (Build 35) contains 2.85 billion nucleotides interrupted by only 341 gaps. It covers ∼99% of the euchromatic genome and is accurate to an error rate of ∼1 event per 100,000 bases. Many of the remaining euchromatic gaps are associated with segmental duplications and will require focused work with new methods. The near-complete sequence, the first for a vertebrate, greatly improves the precision of biological analyses of the human genome including studies of gene number, birth and death. Notably, the human enome seems to encode only 20,000-25,000 protein-coding genes. The genome sequence reported here should serve as a firm foundation for biomedical research in the decades ahead

Auditor Perceptions Of Statements On Auditing Standards 53 and 54: A Study Of Demographics And Perceptions Of Efficacy

This study examines the relationship between auditor demographics and auditor perceptions of Statements of Auditing Standards 53 and 54, and the extent to which these statements may be contributing to a previously unrecognized “expectations gap” between the Auditing Standards Board and practicing CPAs.  Responses from a randomly drawn sample of AICPA auditors were subjected to a canonical correlation analysis in order to identify and define any underlying perceptual constructs.  These constructs were subsequently compared with the stated objectives of the Statements

A synthesis of three decades of socio-ecological change in False Bay, South Africa: setting the scene for multidisciplinary research and management

CITATION: Pfaff, M. C., et al. 2019. A synthesis of three decades of socio-ecological change in False Bay, South Africa: setting the scene for multidisciplinary research and management. Elementa: Science of the Anthropocene, 7(32). doi:10.1525/elementa.367The original publication is available at https://online.ucpress.edu/elementaOver the past three decades, marine resource management has shifted conceptually from top-down sectoral approaches towards the more systems-oriented multi-stakeholder frameworks of integrated coastal management and ecosystem-based conservation. However, the successful implementation of such frameworks is commonly hindered by a lack of cross-disciplinary knowledge transfer, especially between natural and social sciences. This review represents a holistic synthesis of three decades of change in the oceanography, biology and human dimension of False Bay, South Africa. The productivity of marine life in this bay and its close vicinity to the steadily growing metropolis of Cape Town have led to its socio-economic significance throughout history. Considerable research has highlighted shifts driven by climate change, human population growth, serial overfishing, and coastal development. Upwelling-inducing winds have increased in the region, leading to cooling and likely to nutrient enrichment of the bay. Subsequently the distributions of key components of the marine ecosystem have shifted eastward, including kelp, rock lobsters, seabirds, pelagic fish, and several alien invasive species. Increasing sea level and exposure to storm surges contribute to coastal erosion of the sandy shorelines in the bay, causing losses in coastal infrastructure and posing risk to coastal developments. Since the 1980s, the human population of Cape Town has doubled, and with it pollution has amplified. Overfishing has led to drastic declines in the catches of numerous commercially and recreationally targeted fish, and illegal fishing is widespread. The tourism value of the bay contributes substantially to the country’s economy, and whale watching, shark-cage diving and water sports have become important sources of revenue. Compliance with fisheries and environmental regulations would benefit from a systems-oriented approach whereby coastal systems are managed holistically, embracing both social and ecological goals. In this context, we synthesize knowledge and provide recommendations for multidisciplinary research and monitoring to achieve a better balance between developmental and environmental agendas.https://online.ucpress.edu/elementa/article/doi/10.1525/elementa.367/112511/A-synthesis-of-three-decades-of-socio-ecologicalPublisher’s versio