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Theses and dissertations (Accounting and Informatics)

Permanent URI for this collectionhttp://ir-dev.dut.ac.za/handle/10321/4

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    Evaluation of operational efficiency and financial health of non-life insurance companies in South Africa
    (2023) Ige-Gbadeyan, Omonike Ope; Swanepoel, Matthys Johannes
    For some time, operational efficiency has been a great challenge confronting insurance companies; the pressure of low investment returns, pressure to change to the digital age to be relevant to modern technology, and lack of performance to standard and strategic vision are the primary challenges to future transformation efforts. This study examined the operational efficiency and financial health of nonlife insurance in South Africa. Since Operational efficiency is the primary medium to measure financial health, there is a need to identify and discuss the microeconomics and macroeconomics variables and understand the financial health of non-life insurance companies. A descriptive research design was adopted to achieve the objective of this study. In this study, panel data from 2008- 2019 was used. This panel data gives more informative data as it consists of both the cross-sectional information, which captures individual inconsistency, and the time-series information, which captures active modification. 2008 was chosen because insurance industries were distressed due to the 2008. This study used secondary data from S&P Capitall Q and Refinitiv Eikon, well-known databases with readily available data. They provide data reliability, in-depth financial information on companies, equities, fixed income, industry reports, SEC filings, interest rates, commodities, and screening for stocks and mutual funds. The study employed Profitability TLA as a function of financial health and other variables like the company's size, leverage ratio, premium growth rate, liquidity, inflation rate, and Gross domestic product (GDP) growth rate using a panel data regression approach. The result shows that of all the predictors, only LY and LV have a significant (positive) effect on the dependent variable financial health (TLA). The correlation analysis results show the relationships between some of the observed parameters. In particular, the result reveals that liquidity, size of the company, leverage, profit After Tax, operational efficiency, and Return on Asset all have a significant positive correlation with financial health. At the same time, Total Assets correlate negatively with TLA. The study contribute insight into the operational efficiency of non-life insurance companies and show profitability as an efficiency index. The study recommends improving premium growth. Insurance management should focus on reviewing their product prices since some common factors can affect insurance premiums, like gender, age, smoking status, lifestyle, occupation, and income, to improve the premium growth of non-life insurance companies, this study will also be helpful to monitoring authorities in articulating comprehensive and practical strategies to ensure financial development and steadiness of the non-life insurance In the Republic of South Africa.
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    The impact of standard cost as a cost control tool in the automobile industry in Durban, KwaZulu-Natal, South Africa
    (2022-05-13) Aberdeen, Anneen Irene; Olarewaju, Odunayo Magret
    Standard cost variance analysis is a recognized expenditure control technique that has been used as part of firm’s accounting function over the years. Nevertheless, there have been wide debates about its functionality in the current era. The research problem was framed around the relevance, functionality and viability of standard cost. The objectives focused on the relevance and effectiveness of standard cost as budget control tool in the automobile industry in Durban, Kwazulu-Natal, South Africa. The research questions tapered towards the critical factors affecting the relevance and effectiveness of standard cost analysis as well as its contribution to cost management and this profitability of automotive firms in Durban, South Africa, in 2021. While, the study found mixed opinions on applicability of standard cost to extant automotive firms in some regions of the global economy, there is an inclination towards its effectiveness in some automobile firms Durban, Kwazulu-Natal, South Africa. Content analysis method was employed in the study considering its suitability for social science work and also the qualitative nature of the data collected. Cost management was found to be a source of profitability and thus competitive advantage for a number of the automotive firms surveyed. For instance, managing cost by diversifying supplier base served as a robust source of cost management, through which considerable information regarding domestic macroeconomic and international automotive market condition were gleaned. Standard cost variance analysis was described by some respondents as being relevant for the automotive sector in the geographic scope of the research, under differing conditions. As for instance, being more unsuitable for variable cost over foxed cost functions, in addition to mixed responses to strategies employed in standard cost technique adoption. Furthermore, some firms indicated that they combined balanced scorecard with standard cost method, while others did not use standard cost with any additional management tool. A few firms stated the viability of this tool for periodic forecasting which improves cost management, while others operating certain business models including retail and warranty-base firms indicated its unsuitability. Customer budgets and quality specification was found as effective in cost management. Other firms stated that operating without standard cost would culminate in bankruptcy. External considerations such as fluctuating macroeconomic outcomes of exchange rates and high shipping costs affected the viability of standard cost analysis. The structure, composition and nature of variable and fixed costs in the total cost function of automotive firms in Durban, Kwazulu-Natal, South Africa should be factored as key managerial accounting practice tools for maintaining expenditure within budget limits, towards the objective of profit maximization. These can as well enhance the sustenance of economies of scale. In addition, technology management principles can be incorporated curtailing the variable cost component, while advanced statistical methods can be employed to cushion the radical effect of variable cost which are less stable than fixed cost. This will help ease the challenges associated with variable cost budgeting. Further research on the feasibility of standard cost variance analysis should be undertaken within a wide spectrum of industries, with the objective of shedding more light on the effect of this cost control mechanism.
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    Factors that impact the capital budgeting planning and practices of small business enterprises within the eThekwini Springfield Industrial Park
    (2020-09-30) Nunden, Naresh Roshan; Sentoo, Naresh
    This study focused on the factors impacting the capital budgeting planning and practices of small business enterprises (SMEs) within the eThekwini-Springfield Industrial Park in Durban, KwaZulu-Natal, South Africa. SMEs contribute an integral part to the gross domestic product (GDP) of South Africa, as well as beyond its borders. Studies have recognised the huge contribution of SMEs to reducing unemployment and boosting the economy whilst the formal sector shrinks. However, studies have also emphasised the failure rate of SMEs. The complexity of South Africa's economy poses challenges to SMEs in terms of the adoption of Capital Budgeting Processes. Therefore, this study contributes to their capital budgeting planning and practices by focusing on firstly, staff participation and secondly, the influence of owners/managers. Based on a 108 SME sample, the study argued that the planning and practices of capital budgeting represent the most significant aid to the survival of these SMEs. However, minimal studies have investigated the capital budgeting area in SMEs. The study used a quantitative research design, whilst a survey questionnaire was the primary data collection instrument applied. A purposive sampling method was adopted. The Partial Least Squares (PLS) and Structural Equation Modelling 5.0 (SEM) software were utilised to determine the statistical results. The findings revealed that both staff participation and management skills, as well as financial skills, played a critical role in the factors that impact the capital budgeting planning and practices of small business enterprises (SMEs). Factors in relation to staff participation included the following: budget participation, communication, clarification of duties, stake and motivation in the process, as well as technical and computer literacy skills. The study also recognised the managers’/owners’ lack of business knowledge, financial skills, financial considerations, government incentives and networking abilities. The study ended by making recommendations for assisting the survival and growth of SMEs.
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    Effects of inflation accounting on the financial performance of retail stores in KwaZulu-Natal, South Africa
    (2020-09-09) Mbambo, Mzwandile Atkins; Olarewaju, Odunayo Magret; Ngiba, Brian Thulane
    This thesis has been executed in South Africa. The research conductor intended to investigate the effects of inflation accounting on the performance of retail stores in Kwa-Zulu Natal, South Africa. The study used a mixture of openended and closed-ended questions on the questionnaire, combining quantitative and qualitative approaches in research. A total of 200 questionnaires were administered to 5 respondents per store in each of the two different branches of the 20 stores in Kwa-Zulu Natal listed on the Johannesburg Stock Exchange. The investigator used primary data to collect information and the Statistical Package for Social Sciences program to code and analyse data. The Explanatory Factor Analysis and Linear regressions were also employed in this study. The empirical study showed the impact of businesses preparing their financial statements on a historical cost basis and the different issues affecting the financial performance of the retail business. The outcome of the research highlighted positive relationships between the variables used. This study’s findings corroborated prior research findings. As the inflation rate increases, the more noticeable it becomes on the financial statements. Suggestions to resolve some of these concerns are mentioned in the study. If retailers consider these recommendations, hopefully more stores will increase their financial performance and the accuracy of the results.