The effects of applying just-in-time production system on maximizing profitability of small and medium industrial companies in Jordan
Authors : Hamadeh Abu-Khalifa
and Saleh K. Al-Okdeh
Abstract : This study aimed to investigate the extent of applying just-in-time production system on maximizing profitability of small and medium industrial companies in Jordan, where maximizing profitability of companies represented in both (reducing product costs and reducing ending inventory obsolescence) for those companies. In order to achieve the objectives of the study, a questionnaire was designed as a tool for study and was distributed to the study sample represented by administrative managers and financial managers in small and medium industrial companies. The study community consisted of (235) companies of small and medium industrial companies. The Robert Mason equation was used to determine the sample size which consisted of 146 companies, where this study distributed 292questionnaires, and 217 of them were received, while 33 questionnaires were excluded, and the final sample was 184 questionnaires. The results of the study showed that there is a statistically significant impact of applying just-in-time production system on maximizing profitability of small and medium industrial companies in Jordan, and there is a statistically significant impact of applying just-in-time production system on (reducing product costs and reducing ending inventory obsolescence) in small and medium industrial companies. The Study recommended a number of recommendations, the most important of which is: It is necessary to review the successful experiences of international companies that adopt applying just-in-time production system, and to benefit from them by small and medium industrial companies in Jordan in applying just-in-time production system as an advanced tool for cost management and thus maximizing their profitability.
Keywords : Just-In-Time production
system
Profitability
Small and medium industrial
companies
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The effect of liquidity risk on the performance of banks: Evidence from Jordan
Authors : Mohammed AL-Ardaha and Saleh K. Al-Okdeh
Abstract : This study aimed to determine the impact of liquidity risk on financial performance of Jordanian banks, where liquidity risk was measured by (Liquidity ratio, net working capital, cash and investment ratio to total deposits), and financial performance was also measured through the index (return on assets) and the modifying variable (bank size) measured through the natural logarithm of total assets was also added. To achieve the objectives of the study, the analytical quantitative approach was adopted. The study community consisted of all 13 commercial banks listed on the Amman Stock Exchange. All banks in the study community were selected as a study sample using the comprehensive survey method, and the statistical analysis program (SPSS) was used to test the study hypotheses. Based on the results of the statistical analysis, it was found that there was an impact of liquidity risk on financial performance measured by return on assets in Jordanian commercial banks listed on Amman Stock Exchange, and there was an impact for each of (current liquidity ratio, net working capital, cash and investment ratio to total deposits) on financial performance measured by return on assets in Jordanian commercial banks listed on Amman Stock Exchange. It was also found that the size of the bank contributes to modifying the effect of liquidity risk on financial performance measured by return on assets in Jordanian commercial banks listed on Amman Stock Exchange. The study concluded a set of recommendations, the most important of which are: commercial bank administrations should increase interest in exploiting their liquidity within acceptable risk limits to reach optimal ratios for financial performance by balancing the returns to be achieved with the potential risks of such expenses in a way that ensures the positive impact of liquidity risk on the financial performance of those banks.
Keywords : Liquidity Risk
Financial Performance
Jordanian commercial banks
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The Impact of Applying IFRS (9) on Investors' Decisions: An Applied Study on the Companies Listed on Amman Stock Exchange (ASE)
Authors : Habawal, K. & Al-Okdeh, S
Abstract : This research aims to examine the impact of applying IFRS (9) in the preparation of financial reports by taking into consideration: the scope, recognition, classification, and the measurement on the decisions of investors from the viewpoint of brokerage managers, investment managers, and financial analysts in companies listed on the Amman Stock Exchange investment companies. The descriptive analysis methodology is used, and the questionnaire is also used as a tool of collecting data for this research. Questionnaires have been distributed on a sample consisting of 33 investment firms listed on Amman Stock Exchange (ASE). The research finds that there is an impact of applying IFRS 9 by the scope, recognition, classification, and measurement on investors’ decisions
Keywords : Investment Decision, International Financial Reporting Standard (9), Scope, Recognition, Classification and Measurement
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The Moderating Role of Family Control on the Relationship between Audit Committee Financial Expertise and Earnings Management
Authors : Yousef Abu Siam1, Mohammed Idris1 & Saleh Al- Okdeh1
Abstract : The current study offers empirical evidence on the way the family ownership moderates the association that exists between the financial experience of the audit committee and earnings management based on a sample of 44 manufacturing firms that are registered with the Amman Stock Exchange (ASE) from 2012 to 2016. From the results of the study, there is a significant negative association between the financial experience of the audit committee and earnings management. In addition, the study shows a positive interaction of the financial experience of the audit committee and the family ownership on earnings management. This indicates that an increase in the percentage of audit committee members having financial expertise, in order to restrict earnings management, is less likely to be influential in the case of family controlled firms. These results have implications for policy makers and regulatory bodies in Jordan since they highlight the need to improve the good corporate governance practices and attempt to constrain the incidence of earnings management in Jordanian firms.
Keywords : audit committee financial expertise, earnings management, family ownership, Jordan
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Do Liquidity and Firm Size Affect Profitability and Does Capital Structure Play a Moderator Role: Study Based on Jordanian Data
Authors : Lina H. Warrad Saleh K. Oqdeh
Abstract : The purpose of the current study is to investigate the role of the moderator variable in directing or changing the relations between independent and dependent variables. This study tries to explore the role of the capital structure as a moderator variable to draw the shape of the relation between liquidity, firm size and profitability. So in order to achieve the previous objective, the researchers reviewed the literature studies to display the relation between liquidity, firm size and profitability without the existence of the interventional role of capital structure, and then enter a moderator variable among the analysis to monitor the effect.
Keywords : Liquidity, Firm size, Capital structure, Profitability, ASE
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The impact of the implementation of international financial reporting standards no. 15 on improving the quality of accounting information
Authors : F Altaji, S Alokdeh
Abstract : This study aims at investigating the impact of the IFRS (15) on the quality of accounting information in terms of relevance and faithful representation. To achieve the study objectives, a questionnaire is designed and distributed randomly on the study sample which includes (100) of external auditors of the Big Four audit companies in Jordan using the descriptive analytical approach. The study hypotheses are tested through the Simple Regression Test and the One Sample T- Test. The study results indicate a statistically significant impact of the implementation of the IFRS 15 on improving the quality of accounting information from the perspective of external auditors at the Big Four audit companies in Jordan. Moreover, the study finds that there is a statistically significant impact of the implementation of the IFRS 15 on improving the relevance and faithful representation of accounting information included in the reports. Moreover, the study findings also show that Jordanian companies face statistically significant difficulties for the implementation of standard 15 when preparing their financial statements. The researchers have also reached many recommendations; the most important of which suggest informing investors and other decision makers of the results of the study to help them rationalize their investment decisions and raise their awareness about IFRS 15.
Keywords : Standard 15, Quality of Information, Relevance, Faithful representation
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The Impact of Managers’ Related Variables and Department Features on Budget Characteristics: The Case of Private.
Authors : Dr. Mahmoud Nasser, Dr. Osama Mah'd, Dr,Khalil Nimer & Dr.Saleh Al-okdeh
Abstract : This study investigates the influence of manager and department variables on budget characteristics in private Jordanian universities. This paper aims to study the relationship between the departments’ heads characteristics and department features with the budget participation, information sharing, budget adequacy, goal clarity, and budget feedback in private universities in Jordan. It draws on relevant prior studies in the management accounting particularly budget issues to formulate the research questions and implementing survey method with seventy-seven functional managers in five private Jordanian universities to shed light upon the perceptions of proposed budget participants. The results indicate that there is no such a relation between the department type and size with the budget characteristics, and no significant association between most of the manager related variables and budget characteristics. In contrast, the results indicate that the experience earned in the university has a significant strong relation with budget characteristics and weak relation has been found between manager budget experience and budget characteristics. The data suggest that the department factors and the manager factors except the experience earned in the university and the budget experience have no impact on budget characteristics. Hence, the budget characteristics may influence other factors such as the management style, departmental autonomy
Keywords : budget characteristics, Manager related factors, Department features, Private Jordanian universities
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The impact of family ownership concentration on the relationship between the characteristics of board of directors and earnings management
Authors : M Burghleh, S Al-Okdeh
Abstract : This study aimed to investigate the impact of the characteristics of the board of directors represented by size of board of directors, financial experience, and board of directors’ meetings on earnings management measured by Jones' modified model. The study also aimed to find out the impact of ownership concentration on the relationship between the board of directors’ characteristics combined and the earnings management in Jordanian industrial companies listed on Amman Stock Exchange. To achieve the objectives of the study, a quantitative analytical method was applied. The study was applied to a sample of 41 industrial companies where their data were available during the period of study from 2013 to 2017. The findings indicated that the characteristics of the board of directors combined influenced on the earnings management in Jordanian industrial companies listed on Amman Stock Exchange. Moreover, the size of the board of directors and the financial experience had some effects on earnings management in Jordanian industrial companies listed on Amman Stock Exchange. However, the board of directors’ meetings had no meaningful effect on earnings management in Jordanian industrial companies listed on Amman Stock Exchange. It was also found that family ownership concentration had an impact on the relationship between the characteristics of the board of directors combined and earnings management in Jordanian industrial companies listed on Amman Stock Exchange. The study concluded a number of recommendations, the most important of which is to encourage the competent bodies and the boards of directors in the public shareholding companies to pay more attention to the development of more legis-lation that focus on earnings quality by reducing earnings management practices. In addition, it is necessary to identify penalties for cases of manipulation and distortion in the financial statements which reduce the use of illegal techniques and attract investors.
Keywords : Family Ownership Concentration Board of Directors Characteristics Earnings Management
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The impact of creative accounting methods on earnings per share
Authors : Nancy Al-Natsheha and Saleh Al-Okdeha*
Abstract : This study was aimed at investigating the impact of creative accounting methods called “Earnings Management and Income Smoothing” on earnings per share in the Jordanian industrial companies. The model of Dechow et al. (1995) [Dechow, P. M., Sloan, R. G., & Sweeney, A. P. (1995). Detecting earnings management. Accounting Review, 70(2), 193-225.] was adopted to measure earnings management, and the model of Francis et al. (2004) [Francis, J., LaFond, R., Olsson, P. M., & Schipper, K. (2004). Costs of equity and earnings attributes. The accounting review, 79(4), 967-1010.] was adopted to measure income smoothing. In order to achieve the objectives of the study, the analytical quantitative approach was adopted. The study community consisted of the 57 industrial companies listed on the Amman Stock Exchange (ASE). As for the study sample, 36 companies were selected according to the target sample method in the period from 2008 to 2017. The results showed that there was a statistically significant impact of using the creative accounting methods on earnings per share in the industrial companies listed on the ASE, and there was an impact of practicing both earnings management and income smoothing on earnings per share in the industrial companies listed on the ASE. The results also showed that 27.8% of the industrial companies practiced earning management, while 47.2% of the industrial companies practiced income smoothing.
Keywords : Creative Accounting Earnings Management Income Smoothing Earnings Per Share
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The Effect of Weighted Average Cost of Capital (WACC) on Financial Performance
Authors : Maha ALOmar, Prof. Saleh K. Al-Okdeh
Abstract : This study aimed at investigating the effect of Weighted Average Cost of Capital on financial performance in the industrial companies listed on Amman stock exchange in the presence of the control variable (firm size), which was measured by the natural logarithm of the total assets, where the weighted average cost of capital was measures by (Cost of debt, and Cost of equity), and financial performance was measured by Return on assets. In order to achieve the objectives of this study, the descriptive analytical approach was adopted. Where the study population was the industrial companies listed on the Amman Stock Exchange (63), and the study was applied to a sample of the companies (56) companies to which the terms of the intentional sample were applied. The multiple regression models were used to test the study hypotheses.
Keywords :
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“The Impact of Working Capital Management Policies on Financial Performance of Mining and Extraction Companies Listed on Amman Stock Exchange
Authors :S.Almeri, S.Al-Okdeh
Abstract : This study aimed to find out the impact of conservative, aggressive and moderate policies of working capital management on financial performance measured by return on equity, in addition to find the differences between policies adopted in working capital management. To achieve the objectives of the study, the descriptive analytical approach was used, where this study was applied to the Jordanian Mining and Extraction Companies Listed on Amman Stock Exchange which comprise (15) companies, where (11) companies were selected depending on the purposive sample (the conditions of selecting the study sample). This study found a number of results, the most important of which is: there are statistically significant differences between the policies adopted in working capital management of Mining and Extraction Companies, in addition to the statistically negative impact of applying a conservative policy in working capital management on financial performance measured by return on equity of Mining and Extraction Companies, while there was a statistically significant positive impact of applying both aggressive and moderate policies of working capital management on financial performance measured by return on equity of Mining and Extraction Companies Listed on the Amman Stock Exchange. The study concluded a number of recommendations, the most prominent of which is: the management of the Jordanian Mining and Extraction Companies should follow an aggressive policy in working capital management because of its significant positive impact on financial performance, taking into account that the management of companies should study the risks of applying this policy well in order to control their risks as much as possible, so they can improve their financial performance while avoiding the occurrence of these risks.
Keywords : Working Capital, Financial Performance, Jordanian Mining and Extraction Companies.
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the effect of liquidity risk on the performance of bank : Evidence from Jordan Title of proposal (in English)
Authors : Mohammed AL-Ardah, Saleh K. Al-Okdeh
Abstract : This study aimed to determine the impact of liquidity risk on financial performance of Jordanian banks, where liquidity risk was measured by (Liquidity ratio, net working capital, cash and investment ratio to total deposits), and financial performance was also measured through the index (return on assets) and the modifying variable (bank size) measured through the natural logarithm of total assets was also added. To achieve the objectives of the study, the analytical quantitative approach was adopted. The study community consisted of all 13 commercial banks listed on the Amman Stock Exchange. All banks in the study community were selected as a study sample using the comprehensive survey method, and the statistical analysis program (SPSS) was used to test the study hypotheses. Based on the results of the statistical analysis, it was found that there was an impact of liquidity risk on financial performance measured by return on assets in Jordanian commercial banks listed on Amman Stock Exchange, and there was an impact for each of (current liquidity ratio, net working capital, cash and investment ratio to total deposits) on financial performance measured by return on assets in Jordanian commercial banks listed on Amman Stock Exchange. It was also found that the size of the bank contributes to modifying the effect of liquidity risk on financial performance measured by return on assets in Jordanian commercial banks listed on Amman Stock Exchange. The study concluded a set of recommendations, the most important of which are: commercial bank administrations should increase interest in exploiting their liquidity within acceptable risk limits to reach optimal ratios for financial performance by balancing the returns to be achieved with the potential risks of such expenses in a way that ensures the positive impact of liquidity risk on the financial performance of those banks.
Keywords : Liquidity Risk, Financial Performance, Jordanian commercial banks
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The effects of applying just-in-time production system on maximizing profitability of small and medium industrial companies in Jordan
Authors : Hamadeh Abu-Khalifa, Saleh K. Al-Okdeh
Abstract : This study aimed to investigate the extent of applying just-in-time production system on maximizing profitability of small and medium industrial companies in Jordan, where maximizing profitability of companies represented in both (reducing product costs and reducing ending inventory obsolescence) for those companies. In order to achieve the objectives of the study, a questionnaire was designed as a tool for study and was distributed to the study sample represented by administrative managers and financial managers in small and medium industrial companies. The study community consisted of (235) companies of small and medium industrial companies. The Robert Mason equation was used to determine the sample size which consisted of 146 companies, where this study distributed 292questionnaires, and 217 of them were received, while 33 questionnaires were excluded, and the final sample was 184 questionnaires. The results of the study showed that there is a statistically significant impact of applying just-in-time production system on maximizing profitability of small and medium industrial companies in Jordan, and there is a statistically significant impact of applying just-in-time production system on (reducing product costs and reducing ending inventory obsolescence) in small and medium industrial companies. The Study recommended a number of recommendations, the most important of which is: It is necessary to review the successful experiences of international companies that adopt applying just-in-time production system, and to benefit from them by small and medium industrial companies in Jordan in applying just-in-time production system as an advanced tool for cost management and thus maximizing their profitability.
Keywords : Just-In-Time production system, Profitability, Small and medium industrial companies
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