Yoram C. Peles

The Duration of the Adjustment Process of Financial Ratios

Are financial ratios an observed quantity that is influenced by firms or capital and product markets? The current body of empirical research concentrates on the time series behavior of such ratios when corporate distress is revealed. In this study the time series properties of joint-concern firms is examined. It is shown that for six financial ratios under examination, the data are consistent with partial adjustment process with finite adjustment durations. These durations are estimated through a methodology that does not require an a priori knowledge of the level toward which ratios are adjusted. Furthermore, the order of the six discerned durations is consistent with common wisdom. Copyright 1989 by MIT Press.

A combined monopoly and optimal packaging

This paper specifies the conditions under which a profit maximizing monopoly will market a package of two different commodities even when the demands for and the cost of production of, each commodity are entirely independent of the other. Packaging is, here, a useful way of implicitly discriminating by price, especially when explicit price discrimination is not possible. Some of the welfare applications are discussed.

Optimal dynamic durability

Abstract Consider a firm that adjusts its production and the choice of durability for its products instantaneously. We show that when the marginal cost with the respect to durability is nonincreasing, (a) the optimal durability for both the competitive firm and the monopolist decreases over time and (b) the monopolist will produce a good with lower durability than the competitive firm. We thus lend support for empirical findings and causal observations that found the phenomenon of declining durability over time.

The Duration of the Adjustment Process of Financial Ratios: Further Remarks

In a recent paper, Yoram C. Peles and Meir I. Schneller (1989) ignore the sampling autocorrelation bias. A replication of their work that removes the bias changes their results. With the bias removed, there is no evidence that their three long-term ratios follow an adjustment process. Copyright 1992 by MIT Press.

Financial Ratios and The Analysis of Marketing Policy

Discusses the analysis that financial ratios have won lots of attention in the accounting and financial literature. Demonstrates how financial ratios can be used in order to analyse certain aspects of a firms marketing policy. Adopts the idea that accounting ratios are affected by the firms marketing management philosophy. Validates results obtained for the ratios supposedly being affected by the firms consumer service policy and uses other accounting figures, e.g. cash management. Presents financial data for a set of UK companies examining the impact of their marketing policy on the behaviour of financial ratios, and carries out a cross‐section analysis over time. Uses mathematical equations to explain the methodology, results and interpretation and freely employs tables to further emphasize points within. Sums up that in this study high levels of the marketing policies are associated with higher levels of operating profitability.

A proposal for peak load pricing of public utilities

Abstract This paper presents a proposal for peak load pricing of electric utilities based on the variance in quantities bought by each and every customer. There would be one price for quantities bought evenly over the year which should equal the long-run average costs for producing these quantities. Another price would be for extra quantities bought in the peak period over and above the base level. An economic rationale for the system is given based on a specific economic interpretation of the variance of demand and the marginal costing.

OPTIMAL COUPON RATE, TAXES, AND COLLUSION BETWEEN BORROWER AND LENDER

Publisher Summary This chapter explains how to determine the optimal coupon payment for a firm striving to minimize post-tax payments to bondholders, and describes that the actions of the firm acting to minimize its post-tax debt payment, in the face of potential bond buyers who act in their own self-interest as wealth-maximizers, result in a market issue price that is identical to that obtained if both firm and buyers were to collude in selecting a coupon rate that minimizes the sum of tax payments of the coalitions participants. The analysis is restricted to single-period bonds and is initially conducted in a deterministic system under two different tax systems.