Financial Conservatism. Determinants of cash and leverage conservatism Dissertation

Financial Conservatism. Determinants of cash and leverage conservatism in USA firms - Dissertation Example Microsoft, Exxon, Apple are all examples of non-financial firms that have held huge stockpiles of cash1. According to a recent San Francisco Chronicle report, Apple reportedly has a stockpile of $137 Billion, and the company justifies this by saying that it is â€Å"preserving its options†2. In financial literature, a firm which holds more cash reserves or lower leverage than is optimal according to capital structure is known to be financially conservative. To avoid having to depend on costly external sources of debt, having spare debt capacities by maintaining low liabilities to total asset ratios is important. Also for the same reason, retaining adequate cash reserves is also important. From 1980 to 2004, the average cash-to-asset ratio for industrial US firms has increased by 129 percent. During the same time period, net debt for these firms has fallen substantially (Bates et al, 2009). Therefore, on average these firms seem to have adopted more financially conservative pra ctices in both senses by reducing leverage and increasing cash holdings simultaneously. However, much of the reduction in net debt is attributed to higher cash holdings rather than any reduction in liabilities. In general financial conservatism has become a very relevant topic of study in this backdrop. In this context, this paper studies the characteristics of financially conservative firms. The main objective is to see whether financially conservative practices can protect firms from being distressed and what effects the financial crisis had on financially conservative practices. Barring Iona, Leonida and Ozkan (2004), Prior research has focused on analysing conservative behaviour of firms from either the perspective of holding excessively high cash balances or from the perspective of maintaining lower than optimal leverage levels. Iona, Leonida and Ozkan (2004) look at non-financial financially conservative UK firms that adopt both these practices simultaneously. No work prior wo rk has examined the coexistence of both cash conservative and leverage conservative practices for US firms. Using a large sample of industrial US firms over the period of 2002-2011, I enquire into the nature of financial conservatism. Since a firm is financially conservative if it is conservative in terms of holding extra cash reserves as well as maintaining low leverage, I start off by looking at the determinants of cash conservativeness and the determinants of leverage conservativeness. Then I look at what are the important characteristics of firms that contribute to making its financial practices conservative in general. In particular, I ask, what factors influence the probability of a firm being both cash and leverage conservative at the same time. After determining the important factors, I turn to the critical question of how financial conservatism affects the probability of a firm being financially distressed. The major contributions of this paper are twofold: first, extending the literature on conservative firms which adopt both cash and leverage conservatism simultaneously and second, applying the theory of jointly cash and leverage conservative practices to characterize conservative US firms which have not been examined in literature at all. The rest of the paper is structured as follows. Section II presents a review of the relevant literature. This section lays out the

Explain and evaluate de Beauvoir's critique of patriarchal man-woman Essay

Explain and evaluate de Beauvoir's critique of patriarchal man-woman relations - Essay Example There is a proverb which says that â€Å"Men make houses, women make homes!† (Metin, 2011). This very proverb points out the fact that relationship between men and woman is quite mutual. If the men acquire houses for their family, then women with their love and care make it a home. Yet one has always seen that relationship between men and woman comprising of love as well as conflicts. The paper here seeks to examine the patriarchal man- woman relationship with reference to an evaluation of de Beauvoir’s critique of this concept and her notion of woman as the other. Disparities between men and women: different views Man and women are the creations of God, and each has been endowed with different features. Their existence is mutual in nature because active participation of both is required to build and sustain the next generation. However one often comes across situations where women are considered to be imperfect and weaker compared to their male counterpart. Generally, in a male dominated society it is believed that women are completely unfit to lead an independent life and hence she has to be under the supervision of men. The topic of dissimilarity between men and women was also seen during the time of Plato and Aristotle. Plato believed that the disparity in men and women were quantitative in nature, that is, women were considered to be physically and mentally weaker than men. ... Even the Old Testament believes that man and woman are made of the same flesh and blood but they differ in terms of their views, needs, and other things (Women and her Rights, n.d). The relationship between man and woman has various dimensions. They can be as friends, as spouses or as siblings. According to Marx, the relationship between man and woman is essential. This is so because need is an indication for essence. If we need something then it plays a crucial role in our development and in realizing our essence. It is through need that one can understand that their requirement is related to them: in fact it is a part of their essence. Similarly, man and woman are considered to be an essence for each other. This is so because they need each other to give birth to build up the future generation (Kain, 1993, p.323). Patriarchal man-woman relations The relationship between man and woman had gone through many changes with the passage of time. Even in ancient civilizations one can see v ariations in this relationship. In some cases women were given equal importance and in many cases one would come across a patriarchal society. In case of civilizations which were agricultural in nature, one would find that they had always underestimated the potential of women and their society had been patriarchal in nature. Such type of society is built on the assumption that the reigns of political, economic, and cultural life was in the hands of the man. Here after marriage the woman was expected to act in accordance to her husband’s wishes. As women were considered to lack certain features which were possessed by men so they were subjugated in their relationship. Not all agricultural economy had the same patriarchal conditions. If conditions were stringent in the