Faculty of Accounting and Informatics

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An assessment of environmental costs on financial performance : a case study of two plastic manufacturing companies in South Africa
(2022-04-06) Aliamutu, Kansilembo Freddy; Bhana, Anrusha
Environmental sustainability has become a somewhat, “trendy” expression for the corporate, public, private and government sectors. Different theoretical reviews and empirical research investigations have, in previous years, examined the relationship between environmental responsibility and financial performance, proving that further research is required. Subsequently, having better than average environmental costs and including financial performance is important for organisations to make sustainable progress in the long-term. Environmental cost activity is a high cost which usually affects a company's net profit. The study investigated two national plastic manufacturing companies in South Africa. The research objectives are to examine the relationship between environmental costs and financial performance, and to examine the effect of environmental costs on investors or stakeholders’ interest in the organisations. The research aims are to investigate the assessment of the environmental cost of plastic on financial performance at the two national plastics manufacturing companies in South Africa. The study utilised Stakeholder theory, which sees companies as a major aspect of a social system, while concentrating on different stakeholder groups in society. Additionally, the study focused on the two companies using their financial statements in the period between 2016 and 2019. Further statements were unavailable. The research used interpretative analysis because it includes precision and clearer comprehension of qualitative data. The unit of analysis are organisations of two plastic companies, the chosen criteria because they have an environmental cost, and their data is available on the public domain. A case study approach was utilised to get a more profound and extensive comprehension of the phenomena. The study found that an increase in environmental costs may influence financial performance and environmental costs. In addition, it contributed to research relating to the impact of plastic manufacturing companies’ environmental costs in South Africa. The study concluded that environmental costs have a positive and important effect on financial performance. The study recommends that the two companies should continue placing resources into environmental cost funds as much as practicable due to result in growth in financial performance.
The impact of environmental costs on financial performance : an explorative analysis of two plastic companies
(LLC “Consulting Publishing Company “Business Perspectives", 2023-03) Aliamutu, Kansilembo Freddy; Bhana, Anrusha; Suknunan, Sachin
There is little research on the impact of environmental costs on plastic manufacturing companies’ financial performance and sustainability. This paper aims to explore the relationship between environmental costs and financial performance of two large national plastic manufacturing companies, namely Bowler Metcalf Limited (BML) and Nampak Ltd, between 2018 and 2019 since research allows for five year old information. Further, the study used pre-Covid-19 data to conceptualize. It adopted a qualitative method of inquiry using content analysis to analyze the financial statements and reports of the two companies (secondary data analysis) available in the public domain. The interpretative analysis further supported the analysis and interpretation of the two variables of environmental costs and financial performance. The results showed a positive relationship between environmental costs and profits in the financial statements of these two companies during 2018 and 2019. BML had a decrease in plastic penalties from R 23.171 million in 2018 to R 14.596 million in 2019, which supported a reduction in spending on legal and constructive obligation items. Nampak also decreased stakeholders’ equity from R 10,140.3 million in 2018 to R 8,932.33 million in 2019, which meant that the stakeholders’ equity funds were reduced, possibly due to reduced spending on environmental costs during that period. It can be concluded and established that when these two plastic companies spend more on environmental costs, this positively affects overall financial performance and improves financial sustainability. It is recommended to allocate more resources/funding to support environmental costs to increase the profitability of the two plastic manufacturing companies.
The relationship between SME financial sustainability and owners’ financial well-being in South Africa
(Center for Strategic Studies in Business and Finance SSBFNET, 2024-07) Msomi, Thabiso Sthembiso; Aliamutu, Kansilembo Freddy
This study examines the relationship between financial sustainability and the financial well-being of SME owners in Durban, South Africa. Utilising a quantitative research design, data were gathered through close-ended surveys from a diverse cross-section of SME owners, employing a cross-sectional approach.The study adopted a positivist philosophical framework, emphasising quantitative data analysis to derive conclusions. A total of 250 responses were collected, yielding a robust response rate of 82%. The analysis involved descriptive statistics and correlation analysis, with the correlation matrix revealing a positive, statistically significant correlation (r = 0.504, p < 0.05) between financial sustainability and financial well-being. The findings indicate that higher levels of financial sustainability are associated with greater financial well-being among SME owners, though the strength of this relationship is moderate. The regression analysis further supports this positive association, suggesting that interventions aimed at enhancing financial sustainability may significantly improve the financial well-being of SME owners. These results align with the theoretical framework of the Easterlin Paradox, which highlights the relative importance of financial stability in enhancing overall well-being. Based on these findings, several recommendations are proposed, including fostering financial literacy, enhancing access to financial resources, and promoting entrepreneurial collaboration.