A smarter way to buy.

Few companies can pinpoint just how much they're spending on procurement. Here's a matrix that gives companies a systematic way to identify and organize the full costs of their relationships with their suppliers.     

Selling to buy: Asset sales and acquisitions

This study explores the impact of joint corporate asset restructuring decisions, where firms sell an asset in order to fund a subsequent acquisition (selling-to-buy). We find that firms with asset sales are associated with increased acquisition probability. The effect is more pronounced for financially constrained firms. We also show that, in addition to the established improved firm efficiency from focus-increasing asset sales, financially constrained firms obtain the necessary funds to conduct focus-increasing acquisitions, improving further their efficiency. This translates into both higher long-run operating performance and stock abnormal returns at the asset sale announcement.     

Thou shalt buy and hold

An investor holding a stock needs to decide when to sell it over a given investment horizon. It is tempting to think that she should sell at the maximum price over the entire horizon, which is however impossible to achieve. A close yet realistic goal is to sell the stock at a time when the expected relative error between the selling price and the aforementioned maximum price is minimized. This problem is investigated for a Black–Scholes market. A stock ‘goodness index’ α, defined to be the ratio between the excess return rate and the squared volatility rate, is employed to measure the quality of the stock. It is shown that when the stock is good enough, or to be precise when α ≥ 1/2, the optimal strategy is to hold on to the stock, selling only at the end of the horizon. Moreover, the resulting expected relative error diminishes to zero when α goes to infinity. On the other hand, one should sell the stock immediately if α ≤ 0. These results justify the widely accepted financial wisdom that one should buy and hold a stock – if it is good, that is.     

中国的未来不能做空！

虚拟财富的转移,股市的暴跌,其背后究竟隐藏着怎样的暗中博弈？在这场没有硝烟的金融战争中,应该引起我们怎样的思考？我们应该采取怎样的防范风险的行动？为此,本刊记者采访了中国科学院科技金融研究中心特聘研究员盖玉云     

A medical malpractice understanding to FASB ASU no. 2010-24

FASB ASU No.2010-24, Healthcare Entities (Topic 954): Presentation of Insurance Claims and Related Insurance Recoveries changes how healthcare entities present medical malpractice liabilities on financial statements. Healthcare CFOs may need the assistance of their auditors and actuaries to ensure that ASU 2010-24 is appropriately implemented. Actuaries need to estimate the recoverable asset, using methods such as historical loss experience, increased limits factor, and commercial premium.