Search results

The learning outcomes are as follows: developing an understanding of financial statement analysis among students; students would be able to calculate various ratios, understand their meaning and interpret them to take a financial decision; and exploring the relationship between financial leverage and risk.

Amtek Auto is a leading auto-components manufacturer established in 1988 which entered into bankruptcy in through the order of Reserve Bank of India in 2017. The company started with a humble beginning and later on the promoter decided to expand exponentially both through organic as well as inorganic growth in past 15 years. To grow a company kept on taking debt which made it riskier and deteriorated its financial position over a period. The case covers a 10-year timeline from 2008 to 2017. It gives an opportunity to analyze its financial statements to understand how its decisions shaped its performance

The case aims for students to take a comprehensive view of the financial statement analysis of Amtek Auto including the following: vertical and horizontal analysis; comprehensive ratio analysis including liquidity, profitability, leverage and turnover ratios with special emphasis on debt as a double-edged sword; analysis of Armtek Auto’s financial performance over a period of 10 years.

Teaching Notes are available for educators only.

CSS 1: Accounting and Finance.

In the present study, we investigate whether enhanced momentum strategies outperform price momentum strategies and if they show greater resilience and stability under adverse market conditions. We also examine if such strategies are explained by prominent asset pricing models or are a result of behavioral mispricing.

Data consist of the equity shares of all companies listed on National Stock Exchange over the study period. To check the efficacy of enhanced momentum over price momentum, six momentum strategies have been designed and their raw as well as risk-adjusted returns using multi-factor models have been observed. Behavioral mispricing has been examined by constructing an investor attention index. Finally, few robustness tests have been performed to confirm the results.

We find that an enhanced momentum strategy which combines relative and absolute strength momentum outperforms conventional price momentum strategy in India. We also demonstrate that rational pricing models are not able to explain momentum profits for any of the strategies. Finally, we observe that investor overreaction is the possible explanation of momentum profits in India. Thus, our results confirm the role of behavioral mispricing in explaining momentum returns.

Our research is the first major attempt to study enhanced momentum strategies in the Indian context. We experiment with several new enhanced momentum strategies which have not been explored in prior literature. The findings have strong implications for global portfolio managers who wish to design profitable trading strategies.

Drawing from socialization theory this study investigates the effect of financial socialization and mediating role of “attitude toward money” (ATM) and financial literacy on the financial behavior of young adults in an emerging economy.

A cross-sectional survey of 302 young adults was conducted and responses were analyzed to determine the key antecedents of financial behavior. The model was tested using OLS regression. Parallel mediation was tested using Process Macro in SPSS.

ATM, subjective financial literacy, objective financial literacy are positively associated with financial behavior. Furthermore, parallel mediation analysis establishes the role of ATM and subjective financial literacy as a mediator between financial socialization and financial behavior.

These findings have implications for both financial and academic institutions and policymakers. Academic institutions should introduce personal wealth management courses at early stages in their courses to help young adults make appropriate financial decisions. Policymakers should emphasize creating a habit of budgeting and managing expenses among young adults in addition to promoting financial literacy.

This study focuses on determinants of financial behavior in young adults and specifically, argues that involving parents to financially socialize their children have a crucial impact on subjective financial literacy and ATM which has not been explored in previous literature.