SummaryThe functional food market in Serbia is relatively young and insufficiently explored both from the aspects of producers and consumers, the qualitative aspect and especially from the quantitative aspect. The aim of this paper is to illustrate the results of the comprehensive quantititative financial analysis of profitability which focuses on the example of two
companies. The main criterion applied in the selection of companies for the analysis represents the fact that one company is recognizable as a producer of foods with nutritive and health claims and is a leader within that market segment, whereas the other analyzed company mostly produces traditional products and has entered the aforementioned market segment at a later stage. The key idea is to do a comparative analysis of the profitability of these two companies for a four-year period. The profitability ratio analysis and the DuPont analysis system are used in the paper as well as the analysis of solvency and financial leverage effect. The vertical analysis of income statement is also done in order to reveal the relation between some cost categories and operating revenues. The research results lead to a conclusion that the company that mostly produces functional foods has higher profit margins and rates of return and is therefore in a more favourable position since it can benefit from positive effects of financial leverage to a higher extent. The profitability of the second relevant company is mostly based on the better asset turnover.
The dividend announcement of a company is an informational event that can cause underreaction, momentum, overreaction, post-dividend announcement drift, and mean reversion. It is the uncertainty surrounding dividend announcements that leads to such behavioural phenomena. Most authors consider that underreaction occurs after dividend shocks because new information about the dividend is being slowly and gradually built into the stock price. The effect of dividend shocks is often reflected in excess returns, which can last up to one year after the shock. The experiment described in this paper tests whether statistically significant excess returns are realized after a shock dividend announcement. Participants trade with the stocks of two companies, which only differ by dividend-generating stochastic process.The dividend process of Company 2 is a Merton-style jump-diffusion process (consisting of two parts: Brownian motion and Poisson jump), while the dividend process of Company 1 contains only the Brownian motion component. Statistically significant excess returns are expected when trading with Company 2 stocks. An autoregressive model is applied in order to test this hypothesis. The conclusion is that a dividend shock is followed by statistically significant excess returns in 20 of the 22 experiments, which implies that markets are inefficient after sudden and large changes in dividends. Underreaction and discount rate effects are identified.
In this paper, we demonstrate how logistic equation and generalized logistic equation can be applied in teaching economics with the aim that students easily grasp the AK model. To this end, the AK model is firstly modified into three versions, after which the first and the second model are reduced to the generalized logistic equations. The purpose of this paper is to present how through applying the mathematical modifications of mentioned versions of AK models, they become more cognizable to students, which should result by more deeply understanding of well-known economic models.
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