Chapter 4 RESULTS AND DISCUSSION The researches employed the ordinary partial correlation to

The analysis of the data was done by employing the following statistical techniques which were chosen only after the investigator found them to be most appropriate and compatible to the data. Each statistical method is based upon its own specific assumptions regarding the nature of the sample, its universe and research conditions. These factors were considered in advance. Following statistical measures were

A review of a company’s profitability lets investors or managers know how efficiently a company is operating. There are three key ratios to review. The profit margin, return on equity and return on assets. The profit margin is the net income divided by sales. The higher the profit margins the better. The return on equity is net income divided by total equity (Cornett, Adair & Nofsinger, 2009).. This can help to determine the amount of financial leverage the company is using. The return on assets is the net income divided by total assets. This can also help determine the financial leverage the company is using in regards to its assets (Cornett, Adair & Nofsinger,

Another advantage of this report is its use of quantitative research. The selection of charts, tables and graphs are highly creditable in terms of measuring validity and reliability. It provides data with precise and non-bias numerical findings.

When combining the figures for ROE, ROA and the DuPont analysis it appears that the company is using leverage favourably. ROE is greater than ROA and assets are greater than equity. This is a positive sign for shareholders as it suggests a good investment return in a company that is managing its shareholder equity well (Evans & McDowell, 2009).

Working with the DuPont analysis, the results we receive are profit margin which measures the operating efficiency, which is 27%, asset turnover is .55 times and equity multiplier with 2.26. The ROE is the traditional ration with 31.32% upon DuPont being 33.10% in contrast with the industry average of 18.75%, which shows that the firms ROE is doing excellent. The firm has its issues in favor of liquidity and management for inventory, and debt management; it is still working well with its shareholders and doing great.

The main articles used in this study are summarized in the evidence table (Table 4) in the appendix section of this paper. The evidence table was set up to visualize the data from different sources obtained during the research process. The data synthesis divides the various numbers of researches distinctly based on the main author, publication date, study design, study population, data collection method and finally the outcome/results of the study.

Return on equity (ROE) tells where Myer’s strength lies and if there is a room for more improvement. A company can earn higher ROE if they have higher net profit margin, high leverage, and they are using the assets effectively in order to generate more sales. ROE and ROA ratios can measure the relationship of Myer’s net income with their shareholders ' equity and the total assets respectively. From 2012 to 2013, Myer’s ROE was almost stable at 16%, and then over the period 2013-2015, it decreased from 16% to 5%. The changes in ROE reflected changes in ROA, which was almost stable over the period 2012-2013 at 12% then declined to 8% and it kept decreasing to reach 4% in 2015. ROA changes reflected on the Spread that is also decreased dramatically.

Next is Asset turnover with .55 times which is a measure of the efficiency of asset utilization. Finally the equity multiplier with 2.26 which is a measure of financial leverage of the firm. When compared to the traditional ratios we get similar results; Profit margin 25.44% (27% DuPont) versus 18.75% industry average. Asset turnover is .54 (.55 DuPont) versus .50 industry average. Equity multiplier 2.28 times (2.26 times DuPont) versus 2 times industry average. The results show that the DuPont analysis using ROE as the main determinant are very similar to the regular ratios. Furthermore the ROE of the traditional ratio is 31.32% with DuPont being 33.10% versus the industry average of 18.75% shows that the firms ROE is very robust. While the firm has some challenges with respect to liquidity and inventory management, as well as debt management it still is doing a good job with respect to its shareholders. However it could be doing a little better for the stockholders, and needs to address some of the above issues mentioned.

Financial institution has been considered by most people to have no other objective than creation of wealth. The performance of financial institution is therefore measured solely on the basis of their ability and capacity to maximize financial assets. To get to this height, financial institutions generally have long defended the confidentiality of the information pertinent to their business, be it the information about their clients, sources and destination of economic resources that they handle, their credit giving policies and procedures, other

This chapter gives the procedure of work. It thus states places from which data was collected, the methods of presentation, order of analysis, the different test statistics that will be used in the analysis and the rejection criterion for the different test statistics.

The data has been graphed in previous studies (Lauristen & Hiemer, 2009); however, authors have stated that future research will benefit from tests of statistical significance (Lauristen & Hiemer, 2009). Bivariate correlations and linear regression are common methods of estimating association between variables, linear trend (slope), and statistical significance in time series data (Baumer & Lauristen, 2010; Hashima & Finkelhor, 1999; Lauristen, Rezey & Heimer, 2013).

According to Smith and Stulz (1985), firms that face higher expected costs of financial distress have larger incentives to use derivatives because derivatives can reduce the present value of bankruptcy and the probability of financial distress. Firms can use derivatives to reduce the variance of a firm 's cash flow or earnings which enable firm to have sufficient cash flow to fulfill its fixed payment obligations and reduce the probability of financial distress (Aretz and Bartram, 2010; Supanvanij and Strauss, 2010). Similarly to previous studies, I have used leverage as a proxy for financial distress (e.g., Tufano, 1996; Rogers, 2002; Aretz and Bartram, 2010). Leverage is measured with the ratio of total debt to book value of assets (e.g., Coles et al; 2006).

The data collected has been analysed and presented in form of tables and graphs under Results in Chapter 4 on page #. Statistical tools such as correlation, standard deviation etc. were also employed.

This research paper is organized into five sections. Section one fill cover the introduction which will address a general overview of available remedies concerning the research topic. Section two will highlight the literature review of this research paper; section three will highlight the methodology that will be used for this study in terms of the sample and sampling plan. Section four will highlight the sources of data; this highlights the sources that the researcher used in gathering information concerning the research topic. Section five will highlight the discussion of regression while section six will highlight the conclusion of this study in terms of suggested areas of future research and the limitations of the study.

In this paper we investigate the relationship between ownership structure and firm performance in the American financial industry.