Henry Collier

An example of the use of financial ratio analysis: the case of Motorola

H. W. Collier et al. — Wed, 28 May 2008 14:03:37 PDT

In this paper, we demonstrate the use of actual financial data for financial ratio analysis. We construct a financial and industry analysis for Motorola Corporation. The objective is to show students exactly how to compute ratios for an actual company. This paper demonstrates the difficulties in applying the principles of financial ratio analysis when the data are not homogeneous as is the case in textbook examples. We use Motorola as an example because the firm has several segments, two of which account for the majority of sales and represent two industries (semi-conductor and communications) that have different characteristics. The case illustrates the complexity of financial analysis.

Using accounting information for financial institution analysis in an evolving environment

H. W. Collier et al. — Wed, 28 May 2008 14:03:34 PDT

Return on equity analysis provides a system for planning as well as analyzing financial institution performance. In the case of Malaysia, Bank Negara Malaysia has successfully implemented a merger program for Malaysian banks in order to compete in the face of financial deregulation brought about by globalization. The purpose of this paper is to provide additional insights into the improvement of a bank’s financial situation, i.e. commercial banks, due to the recent series of bank mergers in Malaysia. This paper presents an application of the model for the financial analysis of a bank based on the DuPont system of financial analysis presented in Saunders (2000). Bank return on equity is decomposed into net profit margin, total asset turnover and the equity multiplier. This model is applied to Maybank in Malaysia which is one of the ten anchor banks in Malaysia that must satisfy the requirement of having a minimum RM2 billion shareholders fund and a minimum total assets of RM25 billion. Over the period of study from 1998 to 2003, during which substantial financial difficulties existed, Maybank’s assets rose gradually. Both income and expenses dropped during the study period with unusually large decreases in expenses in 2000 because decreases in both interest expense and loan loss and provision. This combination leads to an increase in net profit margin and a subsequent increase in return on equity leading to an increase in the stock price. Maybank appears to have benefited from the financial crisis in Malaysia and the subsequent restructuring of the banking industry.

Gay men and lesbians in the university community

H. W. Collier — Wed, 28 May 2008 14:03:32 PDT

[Extract] There is little doubt that there are gay and lesbian students, faculty, staff, and administrators in our universities. You may not see all of us unless we want you to, but we are there. Whether you choose to acknowledge our presence is another issue. Historical prejudices against minority groups and those who are 'different' still exist in many parts of the world and in many of our universities. There are significant cultural, religious, national and regional differences in how minority 'tribes' or 'groups' are identified and treated. There is a significant body of research discussing issues of homosexuality and discrimination against homosexuals. A simple search of the World Wide Web (WWW) will lead any interested person to thousands of pages and sites that discuss the discrimination. The research discusses many different aspects of same sex attraction and same sex practices. However, many of those who are in charge of our tertiary institutions systematically ignore this body of research. Those of us who are 'gay activists' and human rights activists are constantly reminded of the systematic discrimination against gay men and lesbians in our societies. Some of us are more open about our sexuality than others. Many gay men and lesbians who are comfortable with their orientation still choose to remain 'in the closet' and hidden from their colleagues and others within the university.

Financial analysis of financial institutions in an evolving environment

H. W. Collier et al. — Wed, 28 May 2008 14:03:29 PDT

This paper presents a model for the financial analysis of a bank based on the DuPont system of financial analysis. The bank return on equity is decomposed into net profit margin, total asset turnover and the equity multiplier. This model is applied to AFFIN Bank Malaysia of which is one of the largest banks in Malaysia for the period from 1999 to 2005. The DuPont system of financial analysis shows the impact of the Asian financial crisis on the financial performance of AFFIN Bank that affected the region in 1997-98. The impact of the financial crisis on AFFIN Bank share prices is clearly visible.

A View on the Process of Accounting Standard Setting in The People’s Republic of China

Y. Zhang et al. — Wed, 28 May 2008 14:03:27 PDT

This paper is a discussion of how the People’s Republic of China is attempting to revise accounting standards. Historically, China’s accounting standards were dominated by ‘management’ accounting and compliance and achievement of goals and objectives established by central planning authority. As China seeks Foreign Direct Investment in formerly State Owned Enterprises, competitive pressures demand a change of emphasis in financial reporting. Much of the Western world is adapting IFRS for financial reporting. IFRS seems to privilege western dialogue in the adoption and acceptance of standards if PRC wishes to access the world wide capital markets. Consistency and comparability of financial reporting is one of the objectives of the shift to IFRS in China. The authors attempt to explain how and why China moved from an economy dominated by the beliefs of Chairman Mao’s socialist agenda to today’s more market oriented economy.

A comparison of the weighted average cost of capital for multinational corporations: the case of the automobile industry versus the soft drink industry

C. B. McGowan et al. — Wed, 28 May 2008 14:03:24 PDT

The object of this paper is to determine to what extent the cost of capital differs across comparisons in different countries. In this paper, wecompare and contract the cost of capital for five countries in the soft drink industry and seven companies in the automobile industry. We find that the weighted average cost of capital for the four largest companies in the soft drink industry are similar and the weighted cost of capital for seven companies in the automobile industry are less similar. Since the companies in this study are all large, multinational companies in a single industry, numerous confounding variables are controlled.

The impact of family complexity on the attitudes toward an international career of Russian nationals

H. W. Collier et al. — Wed, 28 May 2008 14:03:22 PDT

This paper examines attitudes of Russian MBA students toward international careers and finds that family complexity impacts responses. Respondents who have complex family situations were slightly favorable toward international careers with average survey response values of about 2.50. The average response values for survey respondents who were not in complex family situations were neutral (3.00) toward an international career. The results of this survey indicate that Russian MBA students are, on average, only slightly favorable toward international careers. The average response values were not different based on gender since the average response value for males was 2.65 and the average response value for females was 2.71. These results contrast with an earlier study that found a stronger preference for international careers among Russian MBA students. Current MBA students in Moscow have more career opportunities than before. The results are based on the responses of twenty-seven Russian students in an AACSB accredited MBA program in Moscow who speak both Russian and English and work for an international company or agency.

The last discrimination: Gay men and lesbians in the classroom

H. W. Collier et al. — Wed, 28 May 2008 14:03:19 PDT

A democracy can only be strong when the rights of all the people are protected. If given the opportunity; individuals or groups that promote intolerance, hate, and bigotry will in time deny rights to all. Discrimination is at least as old as recorded history. The Roman Empire and Classical Greek society created a class system. Some were citizens; males only of course as women were treated more like property; others were slaves and traded and owned by others. Some were free men. However, during the early centuries of the Roman Empire and during virtually all of the Classical Greek period, same sex male / male relationships and conduct appear to have been the norm and these relationships accepted and acknowledged (perhaps even ignored) by the population and the governments. The Egyptians also believed in a class like social structure. India had a caste system that justified discrimination between groups of people. Only recently has this categorization been addressed, but traces of the old social and cultural biases remain in segments of the populations.

Teaching and learning in China and Asia: Some observations

H. W. Collier — Wed, 28 May 2008 14:03:17 PDT

As the ‘Far East’ enters the WTO and the world economy, change is inevitable. The more developed economies will undoubtedly lead the way, and the change agents are more than likely to come from outside the area at least for a while. Beginning in 1973, many of the Chinese students and scholars who studied in the West did not return to China. Many of my current students who have the opportunity to leave do not intend to return. However, there is an increasing number who will return. As more and more of these student graduates return to China and to Malaysia and Singapore and other countries in the region, they will lead the processes of change. They will challenge the status quo from the inside and the changes are inevitable. The dual right vs. wrong, good vs. evil will change to a more relativistic approach to learning and eventually the society will begin to evaluate and think rather than memorize and repeat. The process of change has begun. It is up to us to promote the exchange of ideas and work together to ensure that our world grows peacefully and sensibly.

Financial institution analysis in an evolving environment: the case of the Hong Leong Bank BHD

H. W. Collier et al. — Wed, 28 May 2008 14:03:14 PDT

Gender and attitude toward an international career: a survey of Russian nationals

H. W. Collier et al. — Wed, 28 May 2008 14:03:12 PDT

This paper examines attitudes of Russian MBA students toward international careers and finds that gender is not an issue but that respondents with family constraints were less favorable toward an international career. Respondents who are male, single, or with no children were slightly favorable toward international careers. Women and respondents with spouses without a career were neutral toward international careers. Respondents who were married, respondents with children, and respondents with a spouse with a career, were slightly unfavorable toward an international career. The results of this survey indicate that Russian MBA students are, on average, only slightly favorable toward international careers. These results contrast with an earlier study that found a stronger preference for international careers among Russian MBA students. Current MBA students in Moscow have more career opportunities than before. The results are based on the responses of twenty-nine Russian students in an AACSB accredited MBA program in Moscow who speak both Russian and English and work for an international company or agency.

The Convergence of IFRS in China: A view on the influence of political ideology on Chinese accounting profession

Y. Zhang et al. — Wed, 28 May 2008 14:03:09 PDT

A historical perspective lens may be useful to help people understand the world of accounting and accounting research. Some believe that the role that accounting plays in current society could be better understood by reviewing its historical association with the institutionalization development within which it operates. Accounting as it is practiced in capitalist system has been predominately viewed as a technical and context-free activity. However, if a meta-level concern addressing broad structural and institutional environment from which accounting emanated is absent, there must be doubt that the conventional accounting can claim to be comprehensible and to contain true information. This paper tries to explain why and how China moved from a uniform accounting system to IFRS and what the role the political ideology played during the process. By examining the development of China’s accounting regulatory change, the paper provides reasoning and evidence of how ideological factors affect accounting practice and theoretical construction.

Computing the divisional cost of capital using the pure play method

H. W. Collier et al. — Wed, 28 May 2008 14:03:07 PDT

The Cost of Capital Model is used to calculate the net present value of projects within a multi-unit corporation but may provide incorrect answers for projects that have a level of risk that differs from the overall average risk level for the corporation. We demonstrate the use of the Pure Play Method for calculating the required rate of return for a division of a corporation that has risk characteristics that differ from the risk characteristics of the overall corporation. We apply this methodology to the Integrated Electronic Systems Segment of the Motorola Corporation. We find that the IESS division cost of capital of is 9.3% rather than the 12.3% cost of capital for the corporation as a whole.

Plagiarism: let the policy fix the crime

H. W. Collier et al. — Wed, 28 May 2008 14:03:04 PDT

Plagiarism is considered to be an unacceptable act, a crime, in today’s University. This is reinforced by the Latin and Greek origins of the word, i.e., meaning to ‘plunder’ or ‘kidnap’. An Australian Vice-Chancellor was recently asked to resign following public allegations and findings of his plagiarism. Universities adopt and publicise policies to illustrate what they expect from their students. We posit that while some students plagiarise for reasons endogenous to those students, others do so as a result of poorly designed and constructed assignments and assessment tasks. From a simple example involving the use of the plagiarism detection software program, “Turnitin” and 50, 2nd year Accounting students’ essays, we find the demonstrated level of ‘originality’ and ‘research’ as acceptable for the task the students had been set. However, we conclude that those responsible for formulating and setting assessment tasks require greater consideration of issues of cognitive development and complexity.