In today’s advance and complex financial landscape, financial liter acy (FL) is essential as it does not only influence and impact upon financialdecisions at the firm level but also a country’s wider financial wellbeing and socio- economic development . This study compares the FL levels of Malaysia and UnitedKingdom by utilising the results of the survey from the questionnaire developed by the OECD and by examining demographic and socio- economic factors that influence the level of FL. The results show that,overall, the level of FL in both countries are low and necessary measures should be taken by the government to increase awareness of financial related matters. The literature findings also reveal that demographic, economic, social, and psychological factors are the main determinants, that some common themes appear with respect to the consequences of FL on investmentdecisions, demographic factors, methodology and program effectiveness, and that gaps exist in the literature of FL in Malaysia with respect to types of investment and risk tolerance, measurement of financialliteracy, methodology and sources of knowledge. The study provides information that may assist in directing future research and in formuling policies and guidelines for policy makers, administrators and educators in incorporating suitable FL components in their training endeavours.
Innovation in the financial market has provided more flexible choices of financial products and services to the consumers. Financial products and services are becoming more complex and not easily comprehendible by many consumers. Due to this, consumers with low financialliteracy (FL) may face difficulties to make informed decisions on their savings and investments. Therefore, the purpose of this study is to identify the level of financial literary and its relationship with risk tolerance (RT) towards savings and investments in the context of Malaysia. A total of 172 respondents have been selected using convenience sampling method through online and manual survey. Data were analysed descriptively and statistically using nonparametric techniques, which include Chi-square and Spearman’s Rank Correlation to examine the relationship between variables studied. The results suggest that the overall FL in Malaysia is at moderate level. The study also found that overall FL has a positive significant relationship with the level of RT towards saving and investment. More specific analysis, however, found that only advance FL has a relationship with RT levels. Meanwhile, basic FL was not correlated with the level of respondents’ RT.
Both the UK Financial Reporting Council and Securities Commission Malaysia recommends the composition of the board and its committees to comprise of an appropriate balance of skills, experience and knowledge to adapt to changing circumstances and discharge their responsibilities effectively. A direct inclusion of CSR-relevant experience, expertise, competence and reputation on the boards provide valuable perspectives on sustainability matters in corporate performance and CSR reporting (Mallin and Michelon, 2011; Carpenter and Westphal, 2001). Such presence inadvertently warrants an active incorporation of the CSR agenda into the strategic policies and decisions of companies. This study believes the overall proportion of board of directors with CSR-relevant experience is imperative to the level of CSR disclosure. An improved CSR governance and disclosure practices is achievable with the inputs from all directors during board-level strategic planning. The independence of the directors is irrelevant in considering the boards’ advocacy towards CSR activities (Ratna et al., 2016; Gul and Leong, 2004; Kassinis and Vafeas, 2002). For this study, the presence of CSR-relevant board experience is determined from the corporate profiles of the board of directors. Active experience, assignment and participation in CSR-related are inferred from the directors’ biographic descriptions provided in the annual report. The following hypothesis is postulated:
Ibrahim Mohamed. E, and Alqaydi Fatima R. (2013) examined the financialliteracy among individuals residing in the United Arab Emirates (UAE). In this study researcher studied eight variables. The first variable, forms of personal debt, represented the dependent variable while the other seven variables represented the independent variables. Researcher used descriptive statistics and sample of 185 respondents was used in the analysis. The multiple regression technique was used for the task of statistically controlling the effect of interrelated variables and revealing the partial contribution of each independent variable to the explanatory power of the model. The results indicated that the average level of financialliteracy in UAE was statistically significantly below the average level reported in the literature. However, there were no significant differences between the mean score of males and females. The results also indicated that individuals with strong financial attitude tend to borrow less from credit cards. UAE nationals were more likely to borrow from banks than using credit cards or borrowing from friends or family members.
What particular advantages which might attract inward direct investment? There is a large literature that attempts to explain MNE FDI in terms of the benefits that certain locations provide for investing MNEs. Dunning (1993) presents an FDI typology differentiating between investments that are ‘natural-resource seeking,’ ‘market-seeking,’ ‘efficiency-seeking,’ and ‘strategic-asset seeking.’ More recently, he has drawn from economic geography (Dunning, 1998) to elaborate the location element of his ‘OLI’ framework by incorporating clusters thinking. The idea that strategic-asset seeking and competence building are seen as being important influences on location decisions is consistent with this cluster thinking (Chen and Chen, 1998; Makino et al., 2002; Rugman and Verbeke, 2007; Sethi et al., 2003). The importance of location in major nodes is that much of the strategically important knowledge is tacit (Chung and Alcacer, 2003; Nachum and Keeble, 2003), and access to this knowledge is of paramount importance in high technology industries and complex service industries, of which financial services is a major example (Storper, 2000). Another important asset which firms may seek is highly skilled labour (Makino et al., 2002; Sethi et al., 2003) . It should be noted that agglomeration economies will not be equally relevant to all forms of FDI and may not be the reason why MNEs collocate (McCann and Mudambi, 2005). Pelegrin and Bolance (2008) find that FDI is attracted to agglomerations where there is high R&D intensity or where inter-firm linkages are an important characteristic of the industry, but not where cost-reduction is the primary objective of the FDI. In the latter case, favourable factor endowments are more important.
Financialliteracy has a variety of definitions but it is commonly referred to as “the ability to make informed judgements and to take effective decisions regarding the use and management of money” (Schagen & Lines 1996, p.ii). In the UnitedKingdom, the term ‘financial capability’ tends to be used, rather than financialliteracy. It is reasoned that capability comprises broader concepts than simply knowledge and that financial capability consists of three interrelated elements: knowledge, skills and attitude (FSA 2006 a). The term ‘financialliteracy’ is more commonly used in other jurisdictions, as evident by the establishment of organisations such as the Jump$tart Coalition for Personal FinancialLiteracy in the US and the FinancialLiteracy Foundation in Australia, but in some instances (such as in Australia) reference to financialliteracy is taken to include those broader concepts of financial capability used in the UK. Some researchers view financialliteracy as a more general understanding of economics and how household decisions are affected by economic conditions and circumstances (Worthington, 2006), whereas others maintain a more narrowly defined focus on basic money management tools such as budgeting, saving, investing and insurance (Hilgert, Hogarth & Beverly 2003; Mandell 2001).
Section 13.13. states that “if you are in difficulties, you can also get help and advice from a debt counselling organisation. We will tell you where you can get free money advice. If you ask us to, we will work with debt counselling organisations such as Citizens Advice Bureau centres or The Consumers Credit Counselling Service.” (Banking Code 2003 p.17-18) This section, if the others are successful in getting customers to admit to problems, is advantageous to the customer’s needs but could again fall foul to the misconceptions that some customers hold of the banking industry. The promise to help customers and to work with them with debt agencies is fine if the customers agree to it; if not, what is the bank to do then? The Code does not stipulate this and it appears that if the customer does not want help then the bank can do nothing and the situation will only get worse. The Code also does not state how the customer’s account, overdraft and cards will be handled. In most situations the account is suspended until either it is closed or the situation has been resolved. The customer in the meantime is left without financial means. They are left to use cash chequing agencies that take up to 40% of the value of the cheque. There is also the additional worry over receiving a bad credit score and the possibility of being refused credit in the future. For these reasons customers in financial difficulties are unlikely to seek the banks assistance, which presents a considerable hurdle to the banks’ effectiveness in assisting such people. The view of the banking industry is a great barrier for customers relating to banks.
Investment decision is one of the concepts in finance, where an individual, with investment decision, may expense his or her assets and allocate them for an investment product. The allocated asset is expected to yield future profit. The making of an investment decision is based on financial behavior. Financial behavior is considered to provide a depiction of how an individual makes an investment decision. Behavioral finance is one of the variables affecting financialliteracy. Thus, the present study aims to view how financialliteracy affects investmentdecisions. The present study was conducted in five big cities with largest millennial population in Indonesia, namely DKI Jakarta, Surabaya, Bandung, Semarang, and Serang. This generation is a generation with financial behavior propensity and investment that are different from other generations. The questionnaire was distributed to the respondents in order to measure their financialliteracy and investment decision. The present study applied t-test to test the hypothesis of the study. The result of the study found that financialliteracy affected the investment decision by 39.56%. The implication of the study is that an individual’s good investment decision is determined by his or her financialliteracy.
Financialliteracy is a skill of recognising methods of investing in a systemic way (Giesler and Veresiu, 2014). Investors that are financially literate have less tendencies to indulge in irrational behaviour as compared to others (Borden et al., 2008; Disney and Gathergood, 2013). Financially literate investors use proper techniques at the time of making investmentdecisions (Al-Tamimi and Kalli, 2009). They ignore improper information and process only relevant information at the time of investmentanalysis (Jain et al., 2015). Hayat and Anwar (2016) argued that financial knowledge also affects the risk taking capacity of investors because financialliteracy declines the risk opposing tendency of individuals and financial knowledge provides multiple approaches for handling risky situations (Almenberg and Dreber, 2015). Less financially literate individuals get confused during financial decision making and indulge in behaviour biases (Disney and Gathergood, 2013). Therefore, financialliteracy empowers investors to increase their decision making capability by processing and analysing information properly (Hayat and Anwar, 2016).
When investors face uncertainty they use simple rules of thumb to make investmentdecisions among different alternatives available. By using heuristic people reduce complexity of decision (Raines and Leathers, 2011). When behavioral factors affect investmentdecisions the investors suffer. Behavioral factors lead towards irrational decision making which not just creates markets inefficiencies also effect on the return of investors. Over the last forty years, standard finance has been the dominant theory within the academic community. However, scholars and investment professionals have started to investigate an alternative theory of finance known as behavioral finance. Behavioral finance tries to explain and improve people’s awareness regarding the emotional factors and psychological processes of individuals and entities that invest in financial markets. Behavioral finance scholars and investment professionals are developing an appreciation for the interdisciplinary research that is the underlying foundation for this evolving discipline. Lack of financial knowledge by many stockholders in the stock market should be a reason to want to know how the individuals go about making their investmentdecisions. It will thus be worth establishing whether the investors’ investmentdecisions vary from the assumptions of rationality or not.
The global economic and financial crisis which origi- nated from the US housing market is publicly dis- cussed as a crisis of capitalism itself. It is said to have become evident once again that capitalist economic systems do not develop smoothly but cyclically and encounter crises. The frequency of crises with global effects appears to have grown rapidly in the age of globalisation (e.g. Asia-Crisis, Russian Financial Crisis, Dotcom Crisis, Global Financial Crisis). Many people furthermore consider the current crisis – more than the afore mentioned ones – to be resulting from the ethical foundations of capitalism (or the lack thereof). Adam Smith’s invisible-hand-theory is questioned once again in light of the alleged market failure. On the one hand, performance-based compensation sys- tems, specifically those of investment bankers, are dis- cussed as having caused the crisis by stimulating their egoism towards insatiable greed, that was no longer controlled by ethical standards. On the other hand, the financial crisis has resulted in high destruction of wealth among personal investors, who, while unaware of the risks, apparently blindly followed the invest- ment recommendations of sales associates. They feel deceived and betrayed due to the perceived abuse of their unawareness and trust. Others are said to have themselves been acting out of greed by ignoring or accepting all risk in the chase of a higher return.
Women traditionally are primarily responsible for their own home and household maintenance activities, which mostly takes care of household budgeting and paying the utility bills (Chen, 2002). They are more likely to spend money on their children and families rather than put money away for their retirement. Most of the women allow their husbands to manage their finances. This is a challenge as most of them do not receive any education in finance until they are divorced or widowed (Bach, 2002). They job is to sign the Financial/Investment documents that their husbands ask them to do without any questions (Knight, 2009; Bach, 2002; Frankel, 2008). Yet another challenge for women is that they do not give proper value to their abilities and talents. Chen (2002) states that women shows less interest in learning about financial topics. They put forward lots of excuses for not being involved in financial matters. These include I don‟t earn much, I don‟t have any time, I am not interested in money matters etc. (Frankel, 2008)
(3) To analyze the performance of Islamic banks in Turkey and the UK. The study compared the performance of Islamic banks in Turkey and UnitedKingdom (UK) in the period from 2013 to 2016. This was done by using time series data (pooled Least Squares) (PLS) panel regression. Three Islamic banks in Turkey and five Islamic banks in the UK were selected. There were nine financial ratios calculated from BankFocus, which will be estimated to measure the financial performance in terms of their profitability, capital adequacy, asset quality (riskiness and solvency), management quality, earning diversification (operationally efficient), and liquidity. The study made an attempt to fill a gap in the research area; to cover the Islamic banks in Turkey and the UK; indicate the financial health of modern economy; and provide clear representation of the financial position of banks to shareholders, management, and investors.
3. Return on equity (ROE) can be used to determine the extent of the company's ability to generate profits based on certain share capital. This ratio is a measure of the company's profitability from the perspective of the shareholders. Nevertheless, Mamduh and Abdul Halim (2016: 81) suggested that this ratio does not take into account dividends or capital gains for shareholders. Therefore, ROE is not a true measure of shareholder return. ROE is influenced by ROA and the company's financial leverage level. Thus, ROE can be used to measure the ability of a company's equity in generating profits that are the rights of the owners of their own capital. Investors will be interested in buying shares with this profitability measure, or part of the total profitability that can be allocated to shareholders.C. Nilai Perusahaan.
From table 4 it is observed that there is strong association between annul Income, Type of House, Education, Occupation, no. children with savings. Which states these factors has strong association of an individual’s financial capability to save. Whereas gender, age, marital status, size of the family, earning members does not have relation with financial capability of an individual to save.
The role of financialliteracy. Financialliteracy has been shown to have a clear inverse association with excessive debt holding. For instance, people with lower financialliteracy levels have a greater share of high-cost debt in credit portfolios (Disney and Gathergood 2013; Gathergood 2012). Lusardi and Tufano (2015) also show that that lower levels of debt literacy are associated with a greater tendency to self-report having too much debt or being unsure about one’s current debt position. The less financially literate are also more likely to report having paid finance fees or charges. Alarmingly, individuals age 65+ have the highest self-assessed financial knowledge across all age groups but they are least likely to answer correctly of two of the three debt literacy questions (Lusardi and Tufano 2015). The stark difference between subjective and objective measures of financialliteracy for the older population indicates the possibility of households underestimating the costs and consequences of debt holding and thus making financial mistakes in retirement.
The vastness of knowledge acquisition has its own advantages as well as disadvantages. Therefore, an investigation into comparativeanalysis of traditional and virtual learning environment by itself has become a source of research all over the world. Pakistan is a developing country. Limited research is available on the learning approaches in Pakistan. A couple of studies are available on VLE and TLE. But no study has been yet conducted to determine the comparison between them. The present research article is narrowly being focused on student‟s satisfaction and performance towards either for virtual or traditional learning environment; they feel as to which course system would be more satisfactory and efficient. This paper attempts to accomplish the following goals:
Secondly, bankruptcy laws can affect the ﬁnancing of the company, which can affect its investment capacity. On the one hand, Davydenko and Franks (2008) and Qian and Strahan (2007) ﬁnd that the characteristics of bankruptcy laws are a determining factor of ﬁnancial institutions’ behavior upon ﬁnancing each country’s ﬁrms (it affects recovery rates, the maturity of transactions and the col- lateral required). On the other hand, the orientation of the bankruptcy laws (debtor or creditor oriented) may lead to suboptimal investmentdecisions (López Gutiérrez et al., 2012). These investment problems may be behind the low recovery capacity that the different restructuring proce- dures presented (Couwenberg, 2001), as well as the loss of value of companies in distress (López Gutiérrez et al., 2009). Considering all these factors, from a theoretical point of view, the very fact that companies are in ﬁnancial distress can exacerbate the problems of over- and under- investment. The problems of under-investment get worse because shareholders and managers have no incentive to make proﬁtable investments, unless in doing so, they can signiﬁcantly reduce the probability of bankruptcy. This is because such projects reduce the variability of the com- pany’s returns, only improving the situation of creditors (White, 1996). The problems of over-investment may also increase in companies in ﬁnancial distress, with managers having strong incentives to undertake excessively risky investments. If the project is successful, it avoids or at least
Abstract:- Financialanalysis also referred to as financial statement analysis or accounting analysis refers to an assessment of the viability, stability and profitability of a business, sub-business or project. Financialanalysis is done to reveal the financial position of the firm and soundness of Business. From this analysis we will find out the financial performance and this analysis from the annual report (Income statements and Balance sheets) provided by Canara Traders and Printers Limited from the year 2012 to 2017, the past five financial years, which was the main source of information. The Ratio based on the figures from the revenue statement is called revenue statement ratios. These ratios study the relationship between the profitability & the sales of the concern. It shows the relationship between profits & sales e.g. operating ratios, gross profit ratios, operating net profit ratios, expenses ratios. Business Research is an organized, database, systematic, critical, objective, scientific inquiry or investigation into a specific problem under taken, with the purpose of finding answers or solutions to it.