SSRN Author: Jan F. JacobsJan F. Jacobs SSRN Content
http://www.ssrn.com/author=333079
http://www.ssrn.com/rss/en-usSat, 11 Jun 2016 01:18:24 GMTeditor@ssrn.com (Editor)Sat, 11 Jun 2016 01:18:24 GMTwebmaster@ssrn.com (WebMaster)SSRN RSS Generator 1.0REVISION: Microsoft Excel, Financial Functions, Matter in DisputeIn (business) economics one often has to deal with amounts of money at different points in time. One cannot say much about main economical issues without proper money calculus; these calculus are the foundation. Using PPR (Period Percentage Rate, any period, any rate) i.e. Discrete Compound Interest to rank investments is often deceptive. Financial tools like Microsoft Excel using PPR are dangerous.
http://www.ssrn.com/abstract=340301
http://www.ssrn.com/1503704.htmlFri, 10 Jun 2016 11:52:17 GMTREVISION: Measuring, Indeed Measuring Period Profit and CPP-AccountingTo measure the period profit of a company is not an economic problem but a technical one. It is a measuring problem. In order to be able to measure, one first has to gauge.
The core of measuring is the notion 'calibration', including gauging. In this paper, the words 'gauging' and 'measuring' are distinguished from each other. In this context 'gauging' means everything that has to be done to establish values and standards prior to 'measuring' the results. Calibration is partly (in popular words) converting reference Y by means of reference X, the accepted measurement unit. In technical science, all references are to trace back to the SI-units (Systeme International d'Unites). Gauging is the legally adopted means of calibration plus certifying of an instrument. Calibration is the whole procedure, what and how exactly; in technical science, these detailed procedures have been laid down in internationally accepted protocols.
The problem of profit measurement consists of gauging and ...
http://www.ssrn.com/abstract=360020
http://www.ssrn.com/1503703.htmlFri, 10 Jun 2016 11:51:36 GMTREVISION: Accounting Real InterestThere isn't really anything new regarding interest rates or interest costs, but so many people seem to get confused or worse confounded. Money has two dimensions not just one; not just quantity but also time. Almost any financial/economical activity deals with amounts of money at different points in time. Consequently, such activities are preposterous if the time dimension of money is not correctly processed. Besides the sizes of the amounts, the dates they become payable are especially of paramount importance. In practice as well as in theory, amounts of money often are not calculated as they should be. Even in big international organisations, blue chips at the Stock Exchange, with impressive staffing, things are going badly, as is testified by their own annual accounts. At many schools and universities world-wide, the teaching of financial calculus can, and should be improved. The mean of amounts of money at different dates or whatever 'calculation' which does not give justice to ...
http://www.ssrn.com/abstract=361821
http://www.ssrn.com/1503675.htmlFri, 10 Jun 2016 11:49:30 GMTREVISION: Neither EVA® Nor CVA®, But NVA - Measuring Financial Performance, Uninterrupted, from Start to FinishBeyond the point of no return, the investor's cash flow based perspective is substituted with the accountant's accrual accounting perspective. That is the way it is. This paper bridges the gap between strategic investment - evaluation and the (improved) measurements of traditional accounting, presenting the best of both worlds. Neither EVA® nor CVA®, but NVA, Net Value Added. Measuring financial performance, uninterrupted, from start to finish.
NPV-calculations, exclusive of SVD i.e. Substantial Value Difference, are incomplete and traditional accounts suffer from a lack of proof. Inclusive SVD right from the start, one can calculate more realistic economic life cycles, better standard unit-costs and the expected NVAs both for each and every period and altogether at the point of no return.
Profit is a result. It starts with an investment generating cash. After deduction of value differences and taxes, net profit remains. It is all inter-related. Besides control on route and ...
http://www.ssrn.com/abstract=366561
http://www.ssrn.com/1503674.htmlFri, 10 Jun 2016 11:48:46 GMTREVISION: The Way to Easy Profit MeasurementThis criticism of the Dutch textbook 'Jaarverslaggeving' by Epe/Koetzier is not confined to merely this book. In fact it concerns more rendered out of date books and pure bad education at many schools, institutes and universities all over the world. None of the various profit calculation systems, which are described by Epe/Koetzier around one and the same problem definition, do see justice done to the given data. One system this way, another system that way, all of them make selective choices out of the data. Everyone can easily see that no system meets all the data which should be expected to be quite normal. If such a simple sum cannot be solved thoroughly, what hopes are there of a real company getting its books correct? The several systems currently used lead to more than ten widely divergent 'solutions' even in the case of a classic example. Epe/Koetzier set out in detail what in economic literature is defended by advocates of several so-called profit calculation systems.
The ...
http://www.ssrn.com/abstract=365100
http://www.ssrn.com/1503702.htmlFri, 10 Jun 2016 11:47:35 GMTREVISION: First Gauging, then Measuring Period Profit - Gauging is Coming Across with the Truth Partly Outside ScienceWho dares to say what the normal percentages of scrap and/or unfit products are to be allowed for in order to calculate the unit-cost of a certain product? How many normal seconds or minutes to produce an element? Normal quantities and normal prices per unit? One needs a lot of data, most of it has to be brought in from the outside world. Science cannot answer most of these questions. The answers are just input-data in the unit-cost calculation. The calculation itself is the heart of the matter. That calculation, the scheme, is science. With open places to enter brought in data, values and standards. In this respect there is no difference between unit-cost calculation and profit calculation. In either case several sets of data are necessary to make a start. The crucial question is where to put them in? Maybe some questions have a more or less objective answer, some data is objective data and therefore an object of science. But the main scientific thing is the scheme, the calculus, ...
http://www.ssrn.com/abstract=369461
http://www.ssrn.com/1503701.htmlFri, 10 Jun 2016 11:46:19 GMTREVISION: The Old Way of Calculating Profit is Inefficient and Illogical - The Profit Formula® is a New and Better WayAn asset is a name with a value on a line of the balance sheet. No more, no less. The existing profit calculation systems make an arithmetical difference between, for instance, non-monetary fixed assets and other assets, which is in flat contradiction with a logical approach. By doing so, profit calculation has been made intricate, and it thereby costs a lot of time, effort and money and what is found in the end doesn't justify this. With The Profit Formula® counting and calculating are reduced to an absolute minimum via a direct way to the outcome. A tremendous amount of money can be saved with regard to administration and fringe costs, also in case of pure nominalism.
http://www.ssrn.com/abstract=369544
http://www.ssrn.com/1503673.htmlFri, 10 Jun 2016 11:43:35 GMTREVISION: Like EVA®, the CVA® Concept Cannot Stand the Test EitherOttosson & Weissenrieder published their Study No 1996:1, entitled 'CVA, Cash Value Added - A New Method for Measuring Financial Performance.' It was followed by Study No 1997:3 by Weissenrieder, on the question 'Economic Value Added or Cash Value Added?'
Shareholders have financial requirements on management's strategic decisions, i.e. strategic investments. Those are the decisions in corporations that create value. It should therefore be obvious that those investments are the ones that should be financially evaluated - from the shareholders' perspective. Despite the importance of non-financial performance measurements such as the Balanced Scorecard, an accurate method of investment evaluation is needed, in order to make better strategic choices.
With reference to 'Plato and the cave', Ottosson & Weissenrieder introduce Operating Cash Flow Demand (OCFD) - with certain known characteristics - as a shadow on the wall of the cave. CVA then measures observable 'real cash flows' ...
http://www.ssrn.com/abstract=378501
http://www.ssrn.com/1503699.htmlFri, 10 Jun 2016 11:42:03 GMTREVISION: Period Profit, Shareholder Value, Share Capital, EVA®, CVA®, NVA and Cash Flow - Different Notions, Each Having its Own PeculiaritiesAccording to at least some people, the objective of a capitalist business is taken to be the maximisation of the wealth of its owners, of course within legal, ethical, political and maybe more boundaries. The wealth of its owners can be measured in terms of the period profits i.e. the maximum dividends paid and/or shareholder value i.e. the market value of the company's shares. Profit (the measured profit figure) and shareholder value: two different phenomena, each having its own merits. Also cash flow and profit are two different phenomena. No cash flow is able to make up for what is wrong concerning the profit figure. High(er) cash flows can go very well hand in hand with low(er) profits. Period profit is supposed to be a non-measurable event, referred to as the search for the philosopher's stone. Profit indeed has many dimensions, it is truly a complex quantity, but still it is a measurable event of the real world. Profit measurement should be soluble, because after all, it is a ...
http://www.ssrn.com/abstract=394140
http://www.ssrn.com/1503697.htmlFri, 10 Jun 2016 11:39:20 GMTREVISION: Calculations AC_DC and Breakeven AnalysisA single procedure suffices, just one and the same algorithm, both to elaborate various AC_DC calculations and to perform breakeven analysis to the fullest extent. Breakeven analysis, under the assumption 'production volume is equal to sales volume', results in one or a few breakeven points. These points however belong to a breakeven line. A general maxim exists of which classical breakeven analysis is merely one of the applications.
Total turnover of a certain good in a period is the amount of sales (sales volume) multiplied by the (proportional) selling price per unit. The eventually existing difference between sales volume and production volume is the mutation of the supply, i.e. a number of units (positive or negative) that can be multiplied either by the standard unit-cost of the finished goods in supply (in case of AC calculation) or by just the differential costs of such a unit (in case of DC calculation). The gross performance is total turnover added to the mentioned ...
http://www.ssrn.com/abstract=413120
http://www.ssrn.com/1503671.htmlFri, 10 Jun 2016 11:38:26 GMTREVISION: Measurement of Income Tax on Period Profit - Either Fiscal Accounts or Otherwise, Both Exact and SimpleMeasurement of income tax on period profit, both tax to be paid (resulting from the fiscal accounts) and the one and only real tax burden in the internal documents (management accounting) as well as the tax costs in the published accounts (financial accounting), can all be calculated by means of The Profit Formula(R), quickly and easily. Also special items, for instance tax-free revenues and losses that are not fiscally acknowledged, can easily be processed. Anybody can measure any reasonable period profit with The Profit Formula(R). Counting and calculating is absolutely minimal and exceptionally simple via a direct way to the solution. Short and easy. A tremendous amount of money can be saved with regard to administration and fringe costs, also in case of pure nominalism (HC-accounting). The budgets of many accounts departments can be cut drastically.
Direct mutations in the share capital are out of the question. The unity between balance sheet and profit and loss account cannot ...
http://www.ssrn.com/abstract=424380
http://www.ssrn.com/1503695.htmlFri, 10 Jun 2016 11:34:10 GMTREVISION: The Quest for Value RevisitedPeriod profit is a result. It starts with an investment generating cash. After deduction of value differences and taxes, net profit remains. Share capital (embedded value - what really is present), shareholder value (economic value - what might happen, additional to the existing activities or 'the market value of the company's shares') and cash flows, are all inter-related.
Analogous to the law of conservation of energy in physics, the law of preservation of value holds true in economics, a natural law. Within thorough calculations, everything fits together seamlessly. Although being different notions (e.g. shareholder value and period profit), each having its own peculiarities, in between the various quantities, no euro, no dime, no cent can disappear or appear just like that. In other words, all amounts of money (inherent in an exemplary problem) are inter-dependent.
Measuring and reporting a variety of non-financial indicators i.e. widening the information spectrum is a welcome ...
http://www.ssrn.com/abstract=440100
http://www.ssrn.com/1503694.htmlFri, 10 Jun 2016 11:33:14 GMTREVISION: Valuing Companies and VTsThis paper presents uniform metrics, calculating the value of the firm, the one and only standard WACC, VTS and shareholder value, all at one and the same time. Valuing companies by cash flow discounting can be done, both unequivocal and quite simple really. It all starts with a set of basic data. This has to be brought in from the outside world. Science cannot answer most of the gauging questions. After the data-acquisition, the matter is signal compilation. Starting with any set of given data, they must be compiled in the same best way. It should be possible to work-out, process and purely transform data, regardless of the value of these signals, with one and the same algorithm. The detours that must be followed when working with the different methods and theories on company valuation applied so far, have been eliminated by the algorithm that is outlined in this paper.
The ten most commonly used methods and nine theories, extensively described by Pablo Fernandez, cannot stand the ...
http://www.ssrn.com/abstract=550382
http://www.ssrn.com/1503668.htmlFri, 10 Jun 2016 11:31:48 GMTREVISION: Tax Shields, WACC, NPV, EVA®, CVA®, NVA and Profitability AnalysesThe purpose of this paper relates to the understanding of the phenomenon of tax effects in value and profitability analyses. How to incorporate taxes into discounted cash flow calculations - dealing with the past, the present and the future - from a Value Based Management perspective? Ignoring this question, neglecting tax effects (which is normal practice in some companies) is not realistic and this conservative approach is the contrary to 'being careful' which is what is supposed to happen. Tax is a fact of life. Without correctly dealing with tax effects, all values are 'out-of-control'. Whoever is not aware of the real tax burden nor fully counts it, endangers the continued existence of the company. This is because the after-effects are self-evidently wrong decisions.
What operating surpluses are needed, at least? The bare minimum. Neither gaining nor losing money. Where is the red line? This paper gives the answer to this vexed question. It revolves around monitoring the ...
http://www.ssrn.com/abstract=552188
http://www.ssrn.com/1503692.htmlFri, 10 Jun 2016 11:30:11 GMTREVISION: CAPM Failure & New CAPM RelationshipThe cost of equity is required (besides various other basic data) for many financial applications such as capital budgeting decisions and performance measurements. A common procedure is to use the Capital Asset Pricing Model (CAPM), which involves estimation of an expected risk premium equal to beta times the expected risk premium on the 'market' portfolio, the portfolio containing all assets in the world. Since the market portfolio is not observable a proxy must be used. Typically beta is estimated using a particular index and another (arbitrary) estimate is chosen for the expected market risk premium. The estimates for beta and the expected market risk premium are then multiplied together. It is obvious that this procedure more than likely yields a biased estimate for the cost of equity. So far, the author agrees fully with what has been extensively described by Jan Bartholdy and Paula Peare in their paper entitled 'Estimating Cost of Equity', re <a ...
http://www.ssrn.com/abstract=604643
http://www.ssrn.com/1503691.htmlFri, 10 Jun 2016 11:28:50 GMTREVISION: 'Modigliani-Miller's Proposal' DemasqueModigliani and Miller studied the effect of leverage on the firm's value, but their famous Proposition I (1958, equation 3), stating in the absence of taxes, the firm's value is independent of its debt is abundantly not true. The so-called proof given by Modigliani and Miller is not a mathematical proof. It was and is a statement, which cannot stand the test. Proposition I is not true. Consequently everything based on Proposition I is not true either.
This paper presents a close inspection upon the Modigliani-Miller's Proposal. Although Franco Modigliani and Merton Miller (MM for short) were awarded the Nobel Prize in Economics, their Proposition I appears to be clearly incorrect. The basic MM's idea is that the value of the firm does not depend on how the stakeholders finance it. This revolves around stockholders (equity) and creditors (liabilities to banks, bondholders, etcetera). MM proposed that under perfect market conditions (complete information, no taxes, etcetera), the ...
http://www.ssrn.com/abstract=609102
http://www.ssrn.com/1503690.htmlFri, 10 Jun 2016 11:27:55 GMTREVISION: New IFRS, Half-Way Up to 'The' Profit Formula(R)The new IFRS (International Financial Reporting Standards) acknowledge value differences in some instances but not in all cases. Moreover, for instance under regulation IAS 16, fundamental mistakes are still allowed or even prescribed, contradictory to logic. It is never correct to enter direct mutations onto the balance sheet regardless of the profit and loss account.
A new equation is available within which the balance sheet, the profit and loss account, and the statement of source and use of funds remain inter-related. The apparent antithesis between nominalism and substantialism has been bridged over. The Profit Formula(R), this basic equation of profit measurement, includes each and every capital maintenance concept and does not exclude a single concept of value. According to all reasonable profit definitions, anybody can measure profit over a randomly chosen period, of any length - quickly and easily. The Profit Formula(R) is exceptionally user-friendly. Working with this ...
http://www.ssrn.com/abstract=721630
http://www.ssrn.com/1503689.htmlFri, 10 Jun 2016 11:26:28 GMTREVISION: The One and Only Standard WACC - Cost of Capital versus Return on CapitalA lot of finance textbooks present calculation of WACC (Weighted Average Cost of Capital) as: WACC = Kd - (1 -/- T)- D % Ke - E %, whereas Kd is opportunity cost of debt before taxes, T is tax rate, D % is percentage of debt to total value, Ke is opportunity cost of equity and E % is percentage of equity to total value. Numerous textbooks state that D % and E % are market values, but the correct interpretation of these values is not sufficiently dealt with: which market values, what D/E-ratio? No matter how the financing is done, there is actually only one standard net WACC.
WACC changes in time, one needs an up-to-date WACC, yes indeed, but what and how exactly? In short, many questions still remain, but up to the present they do not have unequivocal answers. The purpose of this paper is to clear up these questions and emphasize in some ideas that usually are overlooked. Famous writers, e.g., Pablo Fernandez, Ignacio Velez-Pareja and Joseph Tham, claim: to calculate the firm's ...
http://www.ssrn.com/abstract=756105
http://www.ssrn.com/1503688.htmlFri, 10 Jun 2016 11:25:47 GMTREVISION: A Trinity: DCF, P/L-Accounts & Shareholder Value - User-Friendly Tools of ManagementA series of anticipated (extra) period profits is the ultimate result of a strategic investment. It starts with generating cash and after deduction of value differences and taxes, net profit remains. Period profit, share capital (embedded value - what really is present), shareholder value (economic value - what might happen, additional to the existing activities or 'the market value of the company's shares') and cash flows, are all inter-related.
DCF (Discounted Cash Flow), P/L-accounts and shareholder value form a trinity, exemplified by an integral calculation. Anyone can learn to put this trinity to one's good use. All can be understood easily. The problem definition in this paper is exceptionally simple really, but is nevertheless realistic. It is inclusive of interest costs and tax costs but price changes are disregarded. The aim is to present the core of the algorithm, to teach what and how in order to perform basic computations, starting from scratch. It ends up in ...
http://www.ssrn.com/abstract=864444
http://www.ssrn.com/1503666.htmlFri, 10 Jun 2016 11:24:06 GMTREVISION: The Very Costs of Tangible Fixed Assets - Economic Life Cycles & Standard Unit CostsStandard prices of the working-units of tangible fixed assets are, amongst other quantities, required input data in order to establish minimum product prices. However, this important data is not calculated exactly, but - if calculated in conformity with the best textbooks in use world-wide - is consistently too low, as is demonstrated in this paper.
Many textbooks talk, just talk, about the optimal useful life of tangible fixed assets. Only a few writers are trying seriously to calculate so-called economic life cycles and simultaneously standard prices of the working-units, finally ending up in minimum product prices. The theory of Terborgh and the method of maximizing the present value of expected profits are already for years, quite rightly, objects of criticism. Up until now however, the method of minimizing costs related to the working-units, is seemingly indisputable. This is obviously a sound method, which is presented in various textbooks, notwithstanding the fact that in ...
http://www.ssrn.com/abstract=886902
http://www.ssrn.com/1503664.htmlFri, 10 Jun 2016 11:21:03 GMTREVISION: Capital Budgeting: NPV v. IRR Controversy, Unmasking Common AssertionsThe conflict between NPV and IRR arises because of misinterpretations that have been made. There is no real conflict. The solution of a polynomial is the subject matter: no more, no less. The NPV-method and the IRR-method are not two measures of investment worth - as it is reported in many textbooks - but just one single method. Moreover, the NPV/IRR-method is plain mathematics and does not pretend to be a ranking device; it cannot be used as such either. Mathematics is yes indeed a tool, but economics can only then be the master if the tool is used properly and the results are interpreted correctly. To help assess the very basics of reckoning investment opportunities as well as to improve the current pedagogy - the latter is so dearly necessary - are the two reasons for writing and publishing this paper.
http://www.ssrn.com/abstract=981382
http://www.ssrn.com/1503686.htmlFri, 10 Jun 2016 11:19:32 GMTREVISION: Jacobs Matrix Surpasses Mobley Matrix TMBoth Mobley Matrix TM and Jacobs Matrix acknowledge the unity of the balance sheets at the start and end of the period under consideration, the income statement for the period, as well as the cash statement for the period. This is because no euro, no dime, no cent can disappear or appear just like that. Everything has to fit perfectly. However the major difference between Mobley Matrix TM and Jacobs Matrix is in the construction of the income statement. Period profit has to be measured purely, of course inclusive of interest, tax and including all relevant factors. Jacobs Matrix does, Mobley Matrix TM does not; the latter is a nominal system that disregards substantialism. The income statement of Mobley Matrix TM cannot stand the test. Moreover, CF for the period, which is a key item in DCF calculus, has been included within Jacobs Matrix.
Over the long term, companies should at least measure and generate three healthy bottom lines: cash flow, profit and return. Mobley Matrix TM ...
http://www.ssrn.com/abstract=1011362
http://www.ssrn.com/1503685.htmlFri, 10 Jun 2016 11:17:54 GMTREVISION: Criticism of Long Low Interest Rate Policy of Central BanksOn December 3, 2015, Mario Draghi, President European Central Bank (ECB), claims: “we are doing more because it works, not because it fails.” Really true or not?
To help assess and further promote the very basics of money calculus, as well as an impetus to improve the actions taken by governments and Central Banks – the latter is so clearly necessary – are the two reasons for writing and publishing this short paper.
http://www.ssrn.com/abstract=2700070
http://www.ssrn.com/1503684.htmlFri, 10 Jun 2016 11:16:39 GMTREVISION: Neither EVA® Nor CVA®, But NVA - Measuring Financial Performance, Uninterrupted, from Start to FinishBeyond the point of no return, the investor's cash flow based perspective is substituted with the accountant's accrual accounting perspective. That is the way it is. This paper bridges the gap between strategic investment - evaluation and the (improved) measurements of traditional accounting, presenting the best of both worlds. Neither EVA® nor CVA®, but NVA, Net Value Added. Measuring financial performance, uninterrupted, from start to finish.
NPV-calculations, exclusive of SVD i.e. Substantial Value Difference, are incomplete and traditional accounts suffer from a lack of proof. Inclusive SVD right from the start, one can calculate more realistic economic life cycles, better standard unit-costs and the expected NVAs both for each and every period and altogether at the point of no return.
Profit is a result. It starts with an investment generating cash. After deduction of value differences and taxes, net profit remains. It is all inter-related. Besides control on route and ...
http://www.ssrn.com/abstract=366561
http://www.ssrn.com/1467358.htmlThu, 04 Feb 2016 13:22:50 GMTREVISION: Accounting Real InterestThere isn't really anything new regarding interest rates or interest costs, but so many people seem to get confused or worse confounded. Money has two dimensions not just one; not just quantity but also time. Almost any financial/economical activity deals with amounts of money at different points in time. Consequently, such activities are preposterous if the time dimension of money is not correctly processed. Besides the sizes of the amounts, the dates they become payable are especially of paramount importance. In practice as well as in theory, amounts of money often are not calculated as they should be. Even in big international organisations, blue chips at the Stock Exchange, with impressive staffing, things are going badly, as is testified by their own annual accounts. At many schools and universities world-wide, the teaching of financial calculus can, and should be improved. The mean of amounts of money at different dates or whatever 'calculation' which does not give justice to ...
http://www.ssrn.com/abstract=361821
http://www.ssrn.com/1467356.htmlThu, 04 Feb 2016 13:20:08 GMTREVISION: New IFRS, Half-Way Up to 'The' Profit Formula(R)The new IFRS (International Financial Reporting Standards) acknowledge value differences in some instances but not in all cases. Moreover, for instance under regulation IAS 16, fundamental mistakes are still allowed or even prescribed, contradictory to logic. It is never correct to enter direct mutations onto the balance sheet regardless of the profit and loss account.
A new equation is available within which the balance sheet, the profit and loss account, and the statement of source and use of funds remain inter-related. The apparent antithesis between nominalism and substantialism has been bridged over. The Profit Formula(R), this basic equation of profit measurement, includes each and every capital maintenance concept and does not exclude a single concept of value. According to all reasonable profit definitions, anybody can measure profit over a randomly chosen period, of any length - quickly and easily. The Profit Formula(R) is exceptionally user-friendly. Working with this ...
http://www.ssrn.com/abstract=721630
http://www.ssrn.com/1464299.htmlTue, 26 Jan 2016 18:32:11 GMTREVISION: Measurement of Income Tax on Period Profit - Either Fiscal Accounts or Otherwise, Both Exact and SimpleMeasurement of income tax on period profit, both tax to be paid (resulting from the fiscal accounts) and the one and only real tax burden in the internal documents (management accounting) as well as the tax costs in the published accounts (financial accounting), can all be calculated by means of The Profit Formula(R), quickly and easily. Also special items, for instance tax-free revenues and losses that are not fiscally acknowledged, can easily be processed. Anybody can measure any reasonable period profit with The Profit Formula(R). Counting and calculating is absolutely minimal and exceptionally simple via a direct way to the solution. Short and easy. A tremendous amount of money can be saved with regard to administration and fringe costs, also in case of pure nominalism (HC-accounting). The budgets of many accounts departments can be cut drastically.
Direct mutations in the share capital are out of the question. The unity between balance sheet and profit and loss account cannot ...
http://www.ssrn.com/abstract=424380
http://www.ssrn.com/1462645.htmlThu, 21 Jan 2016 16:30:44 GMTREVISION: The One and Only Standard WACC - Cost of Capital Versus Return on CapitalA lot of finance textbooks present calculation of WACC (Weighted Average Cost of Capital) as: WACC = Kd - (1 -/- T)- D % Ke - E %, whereas Kd is opportunity cost of debt before taxes, T is tax rate, D % is percentage of debt to total value, Ke is opportunity cost of equity and E % is percentage of equity to total value. Numerous textbooks state that D % and E % are market values, but the correct interpretation of these values is not sufficiently dealt with: which market values, what D/E-ratio? No matter how the financing is done, there is actually only one standard net WACC.
WACC changes in time, one needs an up-to-date WACC, yes indeed, but what and how exactly? In short, many questions still remain, but up to the present they do not have unequivocal answers. The purpose of this paper is to clear up these questions and emphasize in some ideas that usually are overlooked. Famous writers, e.g., Pablo Fernandez, Ignacio Velez-Pareja and Joseph Tham, claim: to calculate the firm's ...
http://www.ssrn.com/abstract=756105
http://www.ssrn.com/1462644.htmlThu, 21 Jan 2016 16:29:30 GMTREVISION: The Very Costs of Tangible Fixed Assets - Economic Life Cycles & Standard Unit CostsStandard prices of the working-units of tangible fixed assets are, amongst other quantities, required input data in order to establish minimum product prices. However, this important data is not calculated exactly, but - if calculated in conformity with the best textbooks in use world-wide - is consistently too low, as is demonstrated in this paper.
Many textbooks talk, just talk, about the optimal useful life of tangible fixed assets. Only a few writers are trying seriously to calculate so-called economic life cycles and simultaneously standard prices of the working-units, finally ending up in minimum product prices. The theory of Terborgh and the method of maximizing the present value of expected profits are already for years, quite rightly, objects of criticism. Up until now however, the method of minimizing costs related to the working-units, is seemingly indisputable. This is obviously a sound method, which is presented in various textbooks, notwithstanding the fact that in ...
http://www.ssrn.com/abstract=886902
http://www.ssrn.com/1462622.htmlThu, 21 Jan 2016 16:24:31 GMTREVISION: Jacobs Matrix Surpasses Mobley Matrix TMBoth Mobley Matrix TM and Jacobs Matrix acknowledge the unity of the balance sheets at the start and end of the period under consideration, the income statement for the period, as well as the cash statement for the period. This is because no euro, no dime, no cent can disappear or appear just like that. Everything has to fit perfectly. However the major difference between Mobley Matrix TM and Jacobs Matrix is in the construction of the income statement. Period profit has to be measured purely, of course inclusive of interest, tax and including all relevant factors. Jacobs Matrix does, Mobley Matrix TM does not; the latter is a nominal system that disregards substantialism. The income statement of Mobley Matrix TM cannot stand the test. Moreover, CF for the period, which is a key item in DCF calculus, has been included within Jacobs Matrix.
Over the long term, companies should at least measure and generate three healthy bottom lines: cash flow, profit and return. Mobley Matrix TM ...
http://www.ssrn.com/abstract=1011362
http://www.ssrn.com/1452431.htmlSat, 12 Dec 2015 14:58:28 GMTREVISION: Capital Budgeting: NPV v. IRR Controversy, Unmasking Common AssertionsThe conflict between NPV and IRR arises because of misinterpretations that have been made. There is no real conflict. The solution of a polynomial is the subject matter: no more, no less. The NPV-method and the IRR-method are not two measures of investment worth - as it is reported in many textbooks - but just one single method. Moreover, the NPV/IRR-method is plain mathematics and does not pretend to be a ranking device; it cannot be used as such either. Mathematics is yes indeed a tool, but economics can only then be the master if the tool is used properly and the results are interpreted correctly. To help assess the very basics of reckoning investment opportunities as well as to improve the current pedagogy - the latter is so dearly necessary - are the two reasons for writing and publishing this paper.
http://www.ssrn.com/abstract=981382
http://www.ssrn.com/1452430.htmlSat, 12 Dec 2015 14:57:25 GMTREVISION: The Very Costs of Tangible Fixed Assets - Economic Life Cycles & Standard Unit CostsStandard prices of the working-units of tangible fixed assets are, amongst other quantities, required input data in order to establish minimum product prices. However, this important data is not calculated exactly, but - if calculated in conformity with the best textbooks in use world-wide - is consistently too low, as is demonstrated in this paper.
Many textbooks talk, just talk, about the optimal useful life of tangible fixed assets. Only a few writers are trying seriously to calculate so-called economic life cycles and simultaneously standard prices of the working-units, finally ending up in minimum product prices. The theory of Terborgh and the method of maximizing the present value of expected profits are already for years, quite rightly, objects of criticism. Up until now however, the method of minimizing costs related to the working-units, is seemingly indisputable. This is obviously a sound method, which is presented in various textbooks, notwithstanding the fact that in ...
http://www.ssrn.com/abstract=886902
http://www.ssrn.com/1452429.htmlSat, 12 Dec 2015 14:56:45 GMTREVISION: A Trinity: DCF, P/L-Accounts & Shareholder Value - User-Friendly Tools of ManagementA series of anticipated (extra) period profits is the ultimate result of a strategic investment. It starts with generating cash and after deduction of value differences and taxes, net profit remains. Period profit, share capital (embedded value - what really is present), shareholder value (economic value - what might happen, additional to the existing activities or 'the market value of the company's shares') and cash flows, are all inter-related.
DCF (Discounted Cash Flow), P/L-accounts and shareholder value form a trinity, exemplified by an integral calculation. Anyone can learn to put this trinity to one's good use. All can be understood easily. The problem definition in this paper is exceptionally simple really, but is nevertheless realistic. It is inclusive of interest costs and tax costs but price changes are disregarded. The aim is to present the core of the algorithm, to teach what and how in order to perform basic computations, starting from scratch. It ends up in ...
http://www.ssrn.com/abstract=864444
http://www.ssrn.com/1452428.htmlSat, 12 Dec 2015 14:55:43 GMTREVISION: The One and Only Standard Wacc - Cost of Capital Versus Return on CapitalA lot of finance textbooks present calculation of WACC (Weighted Average Cost of Capital) as: WACC = Kd - (1 -/- T)- D % Ke - E %, whereas Kd is opportunity cost of debt before taxes, T is tax rate, D % is percentage of debt to total value, Ke is opportunity cost of equity and E % is percentage of equity to total value. Numerous textbooks state that D % and E % are market values, but the correct interpretation of these values is not sufficiently dealt with: which market values, what D/E-ratio? No matter how the financing is done, there is actually only one standard net WACC.
WACC changes in time, one needs an up-to-date WACC, yes indeed, but what and how exactly? In short, many questions still remain, but up to the present they do not have unequivocal answers. The purpose of this paper is to clear up these questions and emphasize in some ideas that usually are overlooked. Famous writers, e.g., Pablo Fernandez, Ignacio Velez-Pareja and Joseph Tham, claim: to calculate the firm's ...
http://www.ssrn.com/abstract=756105
http://www.ssrn.com/1452426.htmlSat, 12 Dec 2015 14:53:44 GMTREVISION: New IFRS, Half-Way Up to 'the' Profit Formula(R)The new IFRS (International Financial Reporting Standards) acknowledge value differences in some instances but not in all cases. Moreover, for instance under regulation IAS 16, fundamental mistakes are still allowed or even prescribed, contradictory to logic. It is never correct to enter direct mutations onto the balance sheet regardless of the profit and loss account.
A new equation is available within which the balance sheet, the profit and loss account, and the statement of source and use of funds remain inter-related. The apparent antithesis between nominalism and substantialism has been bridged over. The Profit Formula(R), this basic equation of profit measurement, includes each and every capital maintenance concept and does not exclude a single concept of value. According to all reasonable profit definitions, anybody can measure profit over a randomly chosen period, of any length - quickly and easily. The Profit Formula(R) is exceptionally user-friendly. Working with this ...
http://www.ssrn.com/abstract=721630
http://www.ssrn.com/1452425.htmlSat, 12 Dec 2015 14:52:42 GMTREVISION: Measurement of Income Tax on Period Profit - Either Fiscal Accounts or Otherwise, Both Exact and SimpleMeasurement of income tax on period profit, both tax to be paid (resulting from the fiscal accounts) and the one and only real tax burden in the internal documents (management accounting) as well as the tax costs in the published accounts (financial accounting), can all be calculated by means of The Profit Formula(R), quickly and easily. Also special items, for instance tax-free revenues and losses that are not fiscally acknowledged, can easily be processed. Anybody can measure any reasonable period profit with The Profit Formula(R). Counting and calculating is absolutely minimal and exceptionally simple via a direct way to the solution. Short and easy. A tremendous amount of money can be saved with regard to administration and fringe costs, also in case of pure nominalism (HC-accounting). The budgets of many accounts departments can be cut drastically.
Direct mutations in the share capital are out of the question. The unity between balance sheet and profit and loss account cannot ...
http://www.ssrn.com/abstract=424380
http://www.ssrn.com/1452424.htmlSat, 12 Dec 2015 14:51:26 GMTREVISION: Criticism of Long Low Interest Rate Policy of Central BanksOn December 3, 2015, Mario Draghi, President European Central Bank (ECB), claims: “we are doing more because it works, not because it fails.” Really true or not?
To help assess and further promote the very basics of money calculus, as well as an impetus to improve the actions taken by governments and Central Banks – the latter is so clearly necessary – are the two reasons for writing and publishing this short paper.
http://www.ssrn.com/abstract=2700070
http://www.ssrn.com/1452423.htmlSat, 12 Dec 2015 14:50:28 GMTREVISION: 'Modigliani-Miller's Proposal' DemasqueModigliani and Miller studied the effect of leverage on the firm's value, but their famous Proposition I (1958, equation 3), stating in the absence of taxes, the firm's value is independent of its debt is abundantly not true. The so-called proof given by Modigliani and Miller is not a mathematical proof. It was and is a statement, which cannot stand the test. Proposition I is not true. Consequently everything based on Proposition I is not true either.
This paper presents a close inspection upon the Modigliani-Miller's Proposal. Although Franco Modigliani and Merton Miller (MM for short) were awarded the Nobel Prize in Economics, their Proposition I appears to be clearly incorrect. The basic MM's idea is that the value of the firm does not depend on how the stakeholders finance it. This revolves around stockholders (equity) and creditors (liabilities to banks, bondholders, etcetera). MM proposed that under perfect market conditions (complete information, no taxes, etcetera), the ...
http://www.ssrn.com/abstract=609102
http://www.ssrn.com/1452332.htmlSat, 12 Dec 2015 12:22:10 GMTREVISION: CAPM Failure & New CAPM RelationshipThe cost of equity is required (besides various other basic data) for many financial applications such as capital budgeting decisions and performance measurements. A common procedure is to use the Capital Asset Pricing Model (CAPM), which involves estimation of an expected risk premium equal to beta times the expected risk premium on the 'market' portfolio, the portfolio containing all assets in the world. Since the market portfolio is not observable a proxy must be used. Typically beta is estimated using a particular index and another (arbitrary) estimate is chosen for the expected market risk premium. The estimates for beta and the expected market risk premium are then multiplied together. It is obvious that this procedure more than likely yields a biased estimate for the cost of equity. So far, the author agrees fully with what has been extensively described by Jan Bartholdy and Paula Peare in their paper entitled 'Estimating Cost of Equity', re <a ...
http://www.ssrn.com/abstract=604643
http://www.ssrn.com/1452320.htmlSat, 12 Dec 2015 12:17:26 GMTREVISION: Tax Shields, Wacc, Npv, Eva®, Cva®, Nva and Profitability AnalysesThe purpose of this paper relates to the understanding of the phenomenon of tax effects in value and profitability analyses. How to incorporate taxes into discounted cash flow calculations - dealing with the past, the present and the future - from a Value Based Management perspective? Ignoring this question, neglecting tax effects (which is normal practice in some companies) is not realistic and this conservative approach is the contrary to 'being careful' which is what is supposed to happen. Tax is a fact of life. Without correctly dealing with tax effects, all values are 'out-of-control'. Whoever is not aware of the real tax burden nor fully counts it, endangers the continued existence of the company. This is because the after-effects are self-evidently wrong decisions.
What operating surpluses are needed, at least? The bare minimum. Neither gaining nor losing money. Where is the red line? This paper gives the answer to this vexed question. It revolves around monitoring the ...
http://www.ssrn.com/abstract=552188
http://www.ssrn.com/1452319.htmlSat, 12 Dec 2015 12:00:30 GMTREVISION: Valuing Companies and VtsThis paper presents uniform metrics, calculating the value of the firm, the one and only standard WACC, VTS and shareholder value, all at one and the same time. Valuing companies by cash flow discounting can be done, both unequivocal and quite simple really. It all starts with a set of basic data. This has to be brought in from the outside world. Science cannot answer most of the gauging questions. After the data-acquisition, the matter is signal compilation. Starting with any set of given data, they must be compiled in the same best way. It should be possible to work-out, process and purely transform data, regardless of the value of these signals, with one and the same algorithm. The detours that must be followed when working with the different methods and theories on company valuation applied so far, have been eliminated by the algorithm that is outlined in this paper.
The ten most commonly used methods and nine theories, extensively described by Pablo Fernandez, cannot stand the ...
http://www.ssrn.com/abstract=550382
http://www.ssrn.com/1452252.htmlSat, 12 Dec 2015 05:30:50 GMTREVISION: The Quest for Value RevisitedPeriod profit is a result. It starts with an investment generating cash. After deduction of value differences and taxes, net profit remains. Share capital (embedded value - what really is present), shareholder value (economic value - what might happen, additional to the existing activities or 'the market value of the company's shares') and cash flows, are all inter-related.
Analogous to the law of conservation of energy in physics, the law of preservation of value holds true in economics, a natural law. Within thorough calculations, everything fits together seamlessly. Although being different notions (e.g. shareholder value and period profit), each having its own peculiarities, in between the various quantities, no euro, no dime, no cent can disappear or appear just like that. In other words, all amounts of money (inherent in an exemplary problem) are inter-dependent.
Measuring and reporting a variety of non-financial indicators i.e. widening the information spectrum is a welcome ...
http://www.ssrn.com/abstract=440100
http://www.ssrn.com/1452113.htmlFri, 11 Dec 2015 15:42:11 GMTREVISION: Budgeting and Budgetary ControlOperational management needs to know the causes of off-standard performance in order to improve operations. The knowledge of variances (real result versus budget) will aid control, at least if and when these variances are understood well enough. The only criterion for the calculation of a variance is its usefulness. Of course variances must be calculated immediately after the event and one should act upon them adequately.
Budget processes in many cases actually exemplify what is harming companies instead of helping them. Jensen, 2001, describes what is happening in practice (http://ssrn.com/abstract=267651). Measuring performance, by whether or not achieving set targets for the period or missing them, is ridiculous. Budgets and targets mean nothing without thorough detailed budgetary control; how should it be conducted?
Variance analysis, the way it is taught at many schools and universities, in accordance with a wide variety of textbooks, is put to the test. This paper presents a ...
http://www.ssrn.com/abstract=400120
http://www.ssrn.com/1451817.htmlThu, 10 Dec 2015 14:37:43 GMTREVISION: Measurement of Income Tax on Period Profit - Either Fiscal Accounts or Otherwise, Both Exact and SimpleMeasurement of income tax on period profit, both tax to be paid (resulting from the fiscal accounts) and the one and only real tax burden in the internal documents (management accounting) as well as the tax costs in the published accounts (financial accounting), can all be calculated by means of The Profit Formula(R), quickly and easily. Also special items, for instance tax-free revenues and losses that are not fiscally acknowledged, can easily be processed. Anybody can measure any reasonable period profit with The Profit Formula(R). Counting and calculating is absolutely minimal and exceptionally simple via a direct way to the solution. Short and easy. A tremendous amount of money can be saved with regard to administration and fringe costs, also in case of pure nominalism (HC-accounting). The budgets of many accounts departments can be cut drastically.
Direct mutations in the share capital are out of the question. The unity between balance sheet and profit and loss account cannot ...
http://www.ssrn.com/abstract=424380
http://www.ssrn.com/1451814.htmlThu, 10 Dec 2015 14:27:34 GMTREVISION: Calculations Ac_Dc and Breakeven AnalysisA single procedure suffices, just one and the same algorithm, both to elaborate various AC_DC calculations and to perform breakeven analysis to the fullest extent. Breakeven analysis, under the assumption 'production volume is equal to sales volume', results in one or a few breakeven points. These points however belong to a breakeven line. A general maxim exists of which classical breakeven analysis is merely one of the applications.
Total turnover of a certain good in a period is the amount of sales (sales volume) multiplied by the (proportional) selling price per unit. The eventually existing difference between sales volume and production volume is the mutation of the supply, i.e. a number of units (positive or negative) that can be multiplied either by the standard unit-cost of the finished goods in supply (in case of AC calculation) or by just the differential costs of such a unit (in case of DC calculation). The gross performance is total turnover added to the mentioned ...
http://www.ssrn.com/abstract=413120
http://www.ssrn.com/1451812.htmlThu, 10 Dec 2015 14:23:47 GMTREVISION: Period Profit, Shareholder Value, Share Capital, EVA®, CVA®, NVA and Cash Flow - Different Notions, Each Having its Own PeculiaritiesAccording to at least some people, the objective of a capitalist business is taken to be the maximisation of the wealth of its owners, of course within legal, ethical, political and maybe more boundaries. The wealth of its owners can be measured in terms of the period profits i.e. the maximum dividends paid and/or shareholder value i.e. the market value of the company's shares. Profit (the measured profit figure) and shareholder value: two different phenomena, each having its own merits. Also cash flow and profit are two different phenomena. No cash flow is able to make up for what is wrong concerning the profit figure. High(er) cash flows can go very well hand in hand with low(er) profits. Period profit is supposed to be a non-measurable event, referred to as the search for the philosopher's stone. Profit indeed has many dimensions, it is truly a complex quantity, but still it is a measurable event of the real world. Profit measurement should be soluble, because after all, it is a ...
http://www.ssrn.com/abstract=394140
http://www.ssrn.com/1451828.htmlThu, 10 Dec 2015 14:22:55 GMTREVISION: Like EVA®, the CVA® Concept Cannot Stand the Test EitherOttosson & Weissenrieder published their Study No 1996:1, entitled 'CVA, Cash Value Added - A New Method for Measuring Financial Performance.' It was followed by Study No 1997:3 by Weissenrieder, on the question 'Economic Value Added or Cash Value Added?'
Shareholders have financial requirements on management's strategic decisions, i.e. strategic investments. Those are the decisions in corporations that create value. It should therefore be obvious that those investments are the ones that should be financially evaluated - from the shareholders' perspective. Despite the importance of non-financial performance measurements such as the Balanced Scorecard, an accurate method of investment evaluation is needed, in order to make better strategic choices.
With reference to 'Plato and the cave', Ottosson & Weissenrieder introduce Operating Cash Flow Demand (OCFD) - with certain known characteristics - as a shadow on the wall of the cave. CVA then measures observable 'real cash flows' ...
http://www.ssrn.com/abstract=378501
http://www.ssrn.com/1451811.htmlThu, 10 Dec 2015 14:20:12 GMTREVISION: First Gauging, then Measuring Period Profit - Gauging is Coming Across with the Truth Partly Outside ScienceWho dares to say what the normal percentages of scrap and/or unfit products are to be allowed for in order to calculate the unit-cost of a certain product? How many normal seconds or minutes to produce an element? Normal quantities and normal prices per unit? One needs a lot of data, most of it has to be brought in from the outside world. Science cannot answer most of these questions. The answers are just input-data in the unit-cost calculation. The calculation itself is the heart of the matter. That calculation, the scheme, is science. With open places to enter brought in data, values and standards. In this respect there is no difference between unit-cost calculation and profit calculation. In either case several sets of data are necessary to make a start. The crucial question is where to put them in? Maybe some questions have a more or less objective answer, some data is objective data and therefore an object of science. But the main scientific thing is the scheme, the calculus, ...
http://www.ssrn.com/abstract=369461
http://www.ssrn.com/1451800.htmlThu, 10 Dec 2015 13:48:47 GMTREVISION: Neither EVA® Nor CVA®, But NVA - Measuring Financial Performance, Uninterrupted, from Start to FinishBeyond the point of no return, the investor's cash flow based perspective is substituted with the accountant's accrual accounting perspective. That is the way it is. This paper bridges the gap between strategic investment - evaluation and the (improved) measurements of traditional accounting, presenting the best of both worlds. Neither EVA® nor CVA®, but NVA, Net Value Added. Measuring financial performance, uninterrupted, from start to finish.
NPV-calculations, exclusive of SVD i.e. Substantial Value Difference, are incomplete and traditional accounts suffer from a lack of proof. Inclusive SVD right from the start, one can calculate more realistic economic life cycles, better standard unit-costs and the expected NVAs both for each and every period and altogether at the point of no return.
Profit is a result. It starts with an investment generating cash. After deduction of value differences and taxes, net profit remains. It is all inter-related. Besides control on route and ...
http://www.ssrn.com/abstract=366561
http://www.ssrn.com/1451802.htmlThu, 10 Dec 2015 13:47:32 GMTREVISION: The Way to Easy Profit MeasurementThis criticism of the Dutch textbook 'Jaarverslaggeving' by Epe/Koetzier is not confined to merely this book. In fact it concerns more rendered out of date books and pure bad education at many schools, institutes and universities all over the world. None of the various profit calculation systems, which are described by Epe/Koetzier around one and the same problem definition, do see justice done to the given data. One system this way, another system that way, all of them make selective choices out of the data. Everyone can easily see that no system meets all the data which should be expected to be quite normal. If such a simple sum cannot be solved thoroughly, what hopes are there of a real company getting its books correct? The several systems currently used lead to more than ten widely divergent 'solutions' even in the case of a classic example. Epe/Koetzier set out in detail what in economic literature is defended by advocates of several so-called profit calculation systems.
The ...
http://www.ssrn.com/abstract=365100
http://www.ssrn.com/1451780.htmlThu, 10 Dec 2015 13:46:14 GMTREVISION: The Old Way of Calculating Profit is Inefficient and Illogical - the Profit Formula® is a New and Better WayAn asset is a name with a value on a line of the balance sheet. No more, no less. The existing profit calculation systems make an arithmetical difference between, for instance, non-monetary fixed assets and other assets, which is in flat contradiction with a logical approach. By doing so, profit calculation has been made intricate, and it thereby costs a lot of time, effort and money and what is found in the end doesn't justify this. With The Profit Formula® counting and calculating are reduced to an absolute minimum via a direct way to the outcome. A tremendous amount of money can be saved with regard to administration and fringe costs, also in case of pure nominalism.
http://www.ssrn.com/abstract=369544
http://www.ssrn.com/1451779.htmlThu, 10 Dec 2015 13:43:57 GMTREVISION: Accounting Real InterestThere isn't really anything new regarding interest rates or interest costs, but so many people seem to get confused or worse confounded. Money has two dimensions not just one; not just quantity but also time. Almost any financial/economical activity deals with amounts of money at different points in time. Consequently, such activities are preposterous if the time dimension of money is not correctly processed. Besides the sizes of the amounts, the dates they become payable are especially of paramount importance. In practice as well as in theory, amounts of money often are not calculated as they should be. Even in big international organisations, blue chips at the Stock Exchange, with impressive staffing, things are going badly, as is testified by their own annual accounts. At many schools and universities world-wide, the teaching of financial calculus can, and should be improved. The mean of amounts of money at different dates or whatever 'calculation' which does not give justice to ...
http://www.ssrn.com/abstract=361821
http://www.ssrn.com/1451784.htmlThu, 10 Dec 2015 13:19:04 GMTREVISION: Measuring, Indeed Measuring Period Profit and Cpp-AccountingTo measure the period profit of a company is not an economic problem but a technical one. It is a measuring problem. In order to be able to measure, one first has to gauge.
The core of measuring is the notion 'calibration', including gauging. In this paper, the words 'gauging' and 'measuring' are distinguished from each other. In this context 'gauging' means everything that has to be done to establish values and standards prior to 'measuring' the results. Calibration is partly (in popular words) converting reference Y by means of reference X, the accepted measurement unit. In technical science, all references are to trace back to the SI-units (Systeme International d'Unites). Gauging is the legally adopted means of calibration plus certifying of an instrument. Calibration is the whole procedure, what and how exactly; in technical science, these detailed procedures have been laid down in internationally accepted protocols.
The problem of profit measurement consists of gauging and ...
http://www.ssrn.com/abstract=360020
http://www.ssrn.com/1451770.htmlThu, 10 Dec 2015 13:17:57 GMTREVISION: Microsoft Excel, Financial Functions, Matter in DisputeIn (business) economics one often has to deal with amounts of money at different points in time. One cannot say much about main economical issues without proper money calculus; these calculus are the foundation. Using PPR (Period Percentage Rate, any period, any rate) i.e. Discrete Compound Interest to rank investments is often deceptive. Financial tools like Microsoft Excel using PPR are dangerous.
http://www.ssrn.com/abstract=340301
http://www.ssrn.com/1451783.htmlThu, 10 Dec 2015 13:16:52 GMTREVISION: Criticism of Long Low Interest Rate Policy of Central BanksOn December 3, 2015, Mario Draghi, President European Central Bank (ECB), claims: “we are doing more because it works, not because it fails.” Really true or not?
To help assess and further promote the very basics of money calculus, as well as an impetus to improve the actions taken by governments and Central Banks – the latter is so clearly necessary – are the two reasons for writing and publishing this short paper.
http://www.ssrn.com/abstract=2700070
http://www.ssrn.com/1451762.htmlThu, 10 Dec 2015 13:05:50 GMTREVISION: Criticism of Long Low Interest Rate Policy of Central BanksOn December 3, 2015, Mario Draghi, President European Central Bank (ECB), claims: “we are doing more because it works, not because it fails.” Really true or not?
To help assess and further promote the very basics of money calculus, as well as an impetus to improve the actions taken by governments and Central Banks – the latter is so clearly necessary – are the two reasons for writing and publishing this short paper.
http://www.ssrn.com/abstract=2700070
http://www.ssrn.com/1451309.htmlWed, 09 Dec 2015 07:56:17 GMT