Despite being one of the fastest growing economies in the world in recent years, the average Indian remains relatively poor due to a highly-skewed income distribution and inequitable access to basic social and economic services. The poorer half jostles for less than 4.1% of national wealth while relational inequities continue to rise across states. This gap of more than four times between the richest and the poorest state in India is seen to be responsible for one of the highest level of disparity in the developing world, subsequently affecting delivery mechanisms and access to basic social services such as basic education, healthcare, credit institutions, law enforcement justice mechanisms and other basic amenities (drinking water and sanitation). This study provides an in-depth assessment of each Indian State’s performance in ensuring access to basic social and economic services (including access to basic health care, education, credit or financial services, water and sanitation facilities and access to justice-law enforcing institutions) to its citizens. The objective of this in-depth data analysis is to initiate policy level discussions on minimizing levels of unequal opportunities for citizens residing across identified states of the country. We theoretically use a Mini-Max approach (inverse to the Maxi-Min utilitarian principle) in understanding the relative dimensions of social and economic inequality present across states in India. The objective of using such a concept is to promote minimum access to some identified social and economic services that enable people (across states) to develop capabilities which are instrumental towards the maximization of their well-being over a period of time. The five fundamental pillars constituting as basic services to be safeguarded and provided by agencies of the state include: a) Access to Basic Amenities (Drinking water and sanitation facilities) b) Access to Education c) Access to Basic Healthcare services d) Access to Credit and Financial service e) Access to Justice (Public Institutions of law enforcement). In terms of methodology, we use a principle component analysis for deriving the index values for each pillar. The states based on index value have been classified as leaders, above average performing states, average performing states, below average performing states and least performing states. The classification acts as a scorecard for the persistence of access inequality in the Indian states and will draw the attention of policymakers towards states that lag behind in the implementation of the various policies and reforms. Such a method of ranking also enables states to identify their counterparts who have successfully ensured greater progress in terms of providing basic social and economic services at nearer proximity and as per the state population needs.
{"title":"Access to Social Services in India: Findings from a Social Equality Index (SEI)","authors":"D. Mohan, R. Sekhani, Serene Vaid","doi":"10.2139/ssrn.3231696","DOIUrl":"https://doi.org/10.2139/ssrn.3231696","url":null,"abstract":"Despite being one of the fastest growing economies in the world in recent years, the average Indian remains relatively poor due to a highly-skewed income distribution and inequitable access to basic social and economic services. The poorer half jostles for less than 4.1% of national wealth while relational inequities continue to rise across states. This gap of more than four times between the richest and the poorest state in India is seen to be responsible for one of the highest level of disparity in the developing world, subsequently affecting delivery mechanisms and access to basic social services such as basic education, healthcare, credit institutions, law enforcement justice mechanisms and other basic amenities (drinking water and sanitation). \u0000This study provides an in-depth assessment of each Indian State’s performance in ensuring access to basic social and economic services (including access to basic health care, education, credit or financial services, water and sanitation facilities and access to justice-law enforcing institutions) to its citizens. The objective of this in-depth data analysis is to initiate policy level discussions on minimizing levels of unequal opportunities for citizens residing across identified states of the country. \u0000We theoretically use a Mini-Max approach (inverse to the Maxi-Min utilitarian principle) in understanding the relative dimensions of social and economic inequality present across states in India. The objective of using such a concept is to promote minimum access to some identified social and economic services that enable people (across states) to develop capabilities which are instrumental towards the maximization of their well-being over a period of time. The five fundamental pillars constituting as basic services to be safeguarded and provided by agencies of the state include: \u0000a) Access to Basic Amenities (Drinking water and sanitation facilities) b) Access to Education c) Access to Basic Healthcare services d) Access to Credit and Financial service e) Access to Justice (Public Institutions of law enforcement). \u0000In terms of methodology, we use a principle component analysis for deriving the index values for each pillar. The states based on index value have been classified as leaders, above average performing states, average performing states, below average performing states and least performing states. The classification acts as a scorecard for the persistence of access inequality in the Indian states and will draw the attention of policymakers towards states that lag behind in the implementation of the various policies and reforms. Such a method of ranking also enables states to identify their counterparts who have successfully ensured greater progress in terms of providing basic social and economic services at nearer proximity and as per the state population needs.","PeriodicalId":347116,"journal":{"name":"PSN: Other Social Welfare Policy (Topic)","volume":"17 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2018-08-15","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"115462515","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Conditional cash transfer programs have spread to over 60 countries in the past two decades, but little is known about their long-term effects. We estimate the lasting impact of childhood exposure to Mexico’s flagship program Progresa by leveraging the age structure of benefits and geographic variation in early program penetration nationwide. Childhood exposure improves women’s outcomes in early adulthood, with increases in educational attainment, geographic mobility, labour market performance, and household living standards. For men, effects are smaller and more difficult to distinguish from spatial convergence.
{"title":"Do Conditional Cash Transfers Improve Economic Outcomes in the Next Generation? Evidence from Mexico","authors":"S. Parker, Tom S. Vogl","doi":"10.3386/W24303","DOIUrl":"https://doi.org/10.3386/W24303","url":null,"abstract":"\u0000 Conditional cash transfer programs have spread to over 60 countries in the past two decades, but little is known about their long-term effects. We estimate the lasting impact of childhood exposure to Mexico’s flagship program Progresa by leveraging the age structure of benefits and geographic variation in early program penetration nationwide. Childhood exposure improves women’s outcomes in early adulthood, with increases in educational attainment, geographic mobility, labour market performance, and household living standards. For men, effects are smaller and more difficult to distinguish from spatial convergence.","PeriodicalId":347116,"journal":{"name":"PSN: Other Social Welfare Policy (Topic)","volume":"12 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2018-02-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"129755098","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2017-06-23DOI: 10.13140/RG.2.2.36401.28002
M. Jazuli
The Indonesia’s Tabungan Haji seems to effectively accommodate the demand of the Indonesian Muslims for Hajj. The number of new account openings keeps increasing, regardless of the long wait times. To this end, the institutional economics perspective has helped explain how the government-regulated-and-promoted Hajj saving arrangement successfully mitigates future risks of failing to perform the Hajj. The scheme seems to take advantage of the Muslims’ cognitive dissonance over potential risks and uncertainties such as the uncertain time of the initial deposit completion, long wait times once the candidate has registered, and potential fund corruption by the government as has happened in the past.
{"title":"Institutional Economic Analysis of Tabungan Haji or the Indonesian Hajj Savings Scheme","authors":"M. Jazuli","doi":"10.13140/RG.2.2.36401.28002","DOIUrl":"https://doi.org/10.13140/RG.2.2.36401.28002","url":null,"abstract":"The Indonesia’s Tabungan Haji seems to effectively accommodate the demand of the Indonesian Muslims for Hajj. The number of new account openings keeps increasing, regardless of the long wait times. To this end, the institutional economics perspective has helped explain how the government-regulated-and-promoted Hajj saving arrangement successfully mitigates future risks of failing to perform the Hajj. The scheme seems to take advantage of the Muslims’ cognitive dissonance over potential risks and uncertainties such as the uncertain time of the initial deposit completion, long wait times once the candidate has registered, and potential fund corruption by the government as has happened in the past.","PeriodicalId":347116,"journal":{"name":"PSN: Other Social Welfare Policy (Topic)","volume":"138 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2017-06-23","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"128474036","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This study examines the extent to which upward social mobility impacts beliefs about inequality and preferences for redistribution and taxation. A novel survey experiment and analysis of two national surveys (1993-2012) establish that there is little to no relationship between perceived or actual rates of social mobility and an individual's preferences for redistribution, taxation of the rich, or a variety of other policies examined, like educational spending. Despite this, local social mobility has a significant relationship with preferences for the Republican party in a county-level analysis of Presidential electoral results from 1980 to 2016, where the strong relationship between social mobility and Republican party preference surpasses that of income and income inequality and is robust to numerous specifications including population weighting, state fixed effects and an extensive battery of control variables. The connection with partisanship rather than policy is confirmed in the national survey data and the survey experiment. Importantly, this partisan effect does not interact with income: regardless of their own income, individuals are more Republican wherever low-income children do well. Finally, rather than universal overestimation, new survey evidence suggests that Americans possess relatively accurate perceptions of local rates of economic mobility. Together, these results provide an empirical rebuttal to conventional models of the Meltzer-Richard voting framework and its prospect of upward mobility (POUM) variant, which argues that preferences for redistribution depend on beliefs about future gains or losses from taxation. Instead, this evidence suggests that attitudes toward redistribution and related policies are not strongly impacted by beliefs in upward economic mobility, which implies that resistance to greater redistribution may not be driven by unmerited belief in the ‘American dream.'
{"title":"Social Mobility and Support for Redistribution: Separating the American Dream from Policy Preferences","authors":"M. George","doi":"10.2139/ssrn.2857925","DOIUrl":"https://doi.org/10.2139/ssrn.2857925","url":null,"abstract":"This study examines the extent to which upward social mobility impacts beliefs about inequality and preferences for redistribution and taxation. A novel survey experiment and analysis of two national surveys (1993-2012) establish that there is little to no relationship between perceived or actual rates of social mobility and an individual's preferences for redistribution, taxation of the rich, or a variety of other policies examined, like educational spending. Despite this, local social mobility has a significant relationship with preferences for the Republican party in a county-level analysis of Presidential electoral results from 1980 to 2016, where the strong relationship between social mobility and Republican party preference surpasses that of income and income inequality and is robust to numerous specifications including population weighting, state fixed effects and an extensive battery of control variables. The connection with partisanship rather than policy is confirmed in the national survey data and the survey experiment. Importantly, this partisan effect does not interact with income: regardless of their own income, individuals are more Republican wherever low-income children do well. Finally, rather than universal overestimation, new survey evidence suggests that Americans possess relatively accurate perceptions of local rates of economic mobility. Together, these results provide an empirical rebuttal to conventional models of the Meltzer-Richard voting framework and its prospect of upward mobility (POUM) variant, which argues that preferences for redistribution depend on beliefs about future gains or losses from taxation. Instead, this evidence suggests that attitudes toward redistribution and related policies are not strongly impacted by beliefs in upward economic mobility, which implies that resistance to greater redistribution may not be driven by unmerited belief in the ‘American dream.'","PeriodicalId":347116,"journal":{"name":"PSN: Other Social Welfare Policy (Topic)","volume":"50 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2017-02-12","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"117143314","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
The Social Assistance and Minimum Income Levels and Replacement Rates Dataset provides two new indicators for comparisons of social assistance and minimum income benefits across countries and over time, namely real net minimum income benefit levels and net minimum income benefit replacement rates. The dataset contains information for 33 countries for the period 1990–2009. For information on social assistance and minimum income benefits, the dataset draws upon information from Nelson’s (2013) dataset. The minimum income replacement rates are comparable to unemployment replacement rates.
{"title":"Social Assistance and Minimum Income Levels and Replacement Rates Dataset","authors":"Jinxian Wang, Olaf van Vliet","doi":"10.2139/SSRN.2894471","DOIUrl":"https://doi.org/10.2139/SSRN.2894471","url":null,"abstract":"The Social Assistance and Minimum Income Levels and Replacement Rates Dataset provides two new indicators for comparisons of social assistance and minimum income benefits across countries and over time, namely real net minimum income benefit levels and net minimum income benefit replacement rates. The dataset contains information for 33 countries for the period 1990–2009. For information on social assistance and minimum income benefits, the dataset draws upon information from Nelson’s (2013) dataset. The minimum income replacement rates are comparable to unemployment replacement rates.","PeriodicalId":347116,"journal":{"name":"PSN: Other Social Welfare Policy (Topic)","volume":"131 44","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2016-12-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"131745807","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2016-09-12DOI: 10.13133/2037-3643_69.278_2
H. Ghassan
The work analyses the writings of Shibani, considering their relevance for contemporary Islamic economics. The novelty of Shibani’s earnings model is its integration of Zakat and other social giving in the social welfare function, which makes the consumer utility a multi-dimensional devotional, material, ethical, social, Shariah-compliant function. The paper proposes a model based on Shibani’s thought, in which the consumer’s income evolves increasingly, from the “imperative earnings” that cover the consumer’s basic needs, to “recommended earnings”, which cover the basic needs of relatives; and to “permissible earnings”, which cover the poor’s needs. Accordingly, the model distinguishes about imperative, recommended, and permissible utility. Rich consumers draw additional utility from Zakat spending in favour of poor consumers. The permissible marginal utility is related to faith interaction and enhances social utility as social transfers are paid to the poor and needy groups. JEL: D1, D6, I3, P46
{"title":"A Consumer and Social Welfare Model Based on the Writings of Shibani (750-805 Ad, 131-189 Ah)","authors":"H. Ghassan","doi":"10.13133/2037-3643_69.278_2","DOIUrl":"https://doi.org/10.13133/2037-3643_69.278_2","url":null,"abstract":"The work analyses the writings of Shibani, considering their relevance for contemporary Islamic economics. The novelty of Shibani’s earnings model is its integration of Zakat and other social giving in the social welfare function, which makes the consumer utility a multi-dimensional devotional, material, ethical, social, Shariah-compliant function. The paper proposes a model based on Shibani’s thought, in which the consumer’s income evolves increasingly, from the “imperative earnings” that cover the consumer’s basic needs, to “recommended earnings”, which cover the basic needs of relatives; and to “permissible earnings”, which cover the poor’s needs. Accordingly, the model distinguishes about imperative, recommended, and permissible utility. Rich consumers draw additional utility from Zakat spending in favour of poor consumers. The permissible marginal utility is related to faith interaction and enhances social utility as social transfers are paid to the poor and needy groups. JEL: D1, D6, I3, P46","PeriodicalId":347116,"journal":{"name":"PSN: Other Social Welfare Policy (Topic)","volume":"1 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2016-09-12","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"134516609","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Life after alternative care can be quite scary for homeless and vulnerable children and youth. There are challenges associated with the reintegration process. Our study found that several care-leavers felt that their families and societies were not willing to receive and accommodate them. These community/family doubted whether they had been fully transformed for the better as some had left their families in bad light. Beneficiaries hence had to put up great efforts to please the family or the community in order to show case their changes. At times their efforts paid and they were received well and accepted back, at other times these efforts landed on less impressed people who had already made their minds based on the past relationship with the care leaver making the reintegration process difficult. It also emerged that the level of support by most institutions declined after reintegration. The young adults was forced to become independent suddenly and at a tender age. This has adverse effects on the care-leavers forcing them out of school or even to relapse back to the street life.
{"title":"Analysis of Re-Integration Impact for Children Leaving Institutional Care (Care-Leavers) in Kenya","authors":"R. M. Ochanda","doi":"10.2139/ssrn.2802533","DOIUrl":"https://doi.org/10.2139/ssrn.2802533","url":null,"abstract":"Life after alternative care can be quite scary for homeless and vulnerable children and youth. There are challenges associated with the reintegration process. Our study found that several care-leavers felt that their families and societies were not willing to receive and accommodate them. These community/family doubted whether they had been fully transformed for the better as some had left their families in bad light. Beneficiaries hence had to put up great efforts to please the family or the community in order to show case their changes. At times their efforts paid and they were received well and accepted back, at other times these efforts landed on less impressed people who had already made their minds based on the past relationship with the care leaver making the reintegration process difficult. It also emerged that the level of support by most institutions declined after reintegration. The young adults was forced to become independent suddenly and at a tender age. This has adverse effects on the care-leavers forcing them out of school or even to relapse back to the street life.","PeriodicalId":347116,"journal":{"name":"PSN: Other Social Welfare Policy (Topic)","volume":"1 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2016-06-30","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"128915489","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
The financial crisis and the sovereign debt crisis that it precipitated in a number of peripheral EU Member States heralded massive changes in insolvency, corporate rescue and employment protection policies. The US and the EU both suffered greatly in the wake of the crisis, but their recoveries have occurred along very different tracks. The US has managed to regain much of its position in terms of relative growth and the UK has outpaced the recoveries of those European countries that are members of the European Monetary Union. The purpose of this treatise is to explore the context of the 2007-2008 financial crisis in the US and in the EU, its impact on legal reform in corporate rescue and restructuring and those aspects of social policy implicated within insolvency systems (notably collective redundancy and transfers of undertakings), whether or not the corporate rescue and employee protection systems can be seen to be converging, in view of the different socio-economic, political and cultural aspects of the US and the EU, such convergence might be beneficial or, indeed, possible.
{"title":"Studies in Convergence? Post-Crisis Effects on Corporate Rescue and the Influence of Social Policy: The EU and the USA","authors":"Jennifer L. L. Gant","doi":"10.2139/ssrn.3848571","DOIUrl":"https://doi.org/10.2139/ssrn.3848571","url":null,"abstract":"The financial crisis and the sovereign debt crisis that it precipitated in a number of peripheral EU Member States heralded massive changes in insolvency, corporate rescue and employment protection policies. The US and the EU both suffered greatly in the wake of the crisis, but their recoveries have occurred along very different tracks. The US has managed to regain much of its position in terms of relative growth and the UK has outpaced the recoveries of those European countries that are members of the European Monetary Union. The purpose of this treatise is to explore the context of the 2007-2008 financial crisis in the US and in the EU, its impact on legal reform in corporate rescue and restructuring and those aspects of social policy implicated within insolvency systems (notably collective redundancy and transfers of undertakings), whether or not the corporate rescue and employee protection systems can be seen to be converging, in view of the different socio-economic, political and cultural aspects of the US and the EU, such convergence might be beneficial or, indeed, possible.","PeriodicalId":347116,"journal":{"name":"PSN: Other Social Welfare Policy (Topic)","volume":"28 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2015-12-23","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"129317004","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2015-12-01DOI: 10.51599/is.2015.01.01.09
V. Terziev, S. Dimitrova, E. Stoyanov
The paper presents the basis of the scientific research in assessing the efficiency of social programming, seeking its justification and control on national, regional and local level. Different theoretical and practical options are reviewed analyzing their characterization and opportunities of application.
{"title":"Assessment of Social Programming Efficiency in Dynamic Social Environment","authors":"V. Terziev, S. Dimitrova, E. Stoyanov","doi":"10.51599/is.2015.01.01.09","DOIUrl":"https://doi.org/10.51599/is.2015.01.01.09","url":null,"abstract":"The paper presents the basis of the scientific research in assessing the efficiency of social programming, seeking its justification and control on national, regional and local level. Different theoretical and practical options are reviewed analyzing their characterization and opportunities of application.","PeriodicalId":347116,"journal":{"name":"PSN: Other Social Welfare Policy (Topic)","volume":"56 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2015-12-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"116809669","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pablo Fernández, Isabel Fernández Acín, Alberto Ortiz Pizarro
The Spanish version of this paper is available at: http://ssrn.com/abstract=895267. The net income of a company in a given year is an arbitrary number which depends on several decisions on the accounting of expenses and revenues. By contrast, each cash flow (money going out of the cash of the company into someone's pocket: shareholders, debt owners...) is a single number not subject to any particular criterion. The case of Madera Inc. is presented and different flows are calculated. The Equity Cash Flow (ECF) is the money which comes out of the cash and gets into the pockets of the shareholders. The FCF (Free Cash Flow) is the hypothetical ECF if the company had no debt. The Capital Cash flow is the Debt Cash Flow plus the Equity Cash Flow. The Debt Cash Flow consists of the sum of the interest plus the repayment of principal (or less the increase in principal). The reduced balance sheet and the WCR (“Working Capital Requirements”) are also calculated. They allow us to interpret more easily and quicker the accounting statements.The following questions arise: Does the dividend come from the net income? Where are the retained earnings and the reserves? What is the depreciation?
{"title":"Net Income, Cash Flows, Reduced Balance Sheet and WCR (Working Capital Requirements)","authors":"Pablo Fernández, Isabel Fernández Acín, Alberto Ortiz Pizarro","doi":"10.2139/SSRN.2675274","DOIUrl":"https://doi.org/10.2139/SSRN.2675274","url":null,"abstract":"The Spanish version of this paper is available at: http://ssrn.com/abstract=895267. The net income of a company in a given year is an arbitrary number which depends on several decisions on the accounting of expenses and revenues. By contrast, each cash flow (money going out of the cash of the company into someone's pocket: shareholders, debt owners...) is a single number not subject to any particular criterion. The case of Madera Inc. is presented and different flows are calculated. The Equity Cash Flow (ECF) is the money which comes out of the cash and gets into the pockets of the shareholders. The FCF (Free Cash Flow) is the hypothetical ECF if the company had no debt. The Capital Cash flow is the Debt Cash Flow plus the Equity Cash Flow. The Debt Cash Flow consists of the sum of the interest plus the repayment of principal (or less the increase in principal). The reduced balance sheet and the WCR (“Working Capital Requirements”) are also calculated. They allow us to interpret more easily and quicker the accounting statements.The following questions arise: Does the dividend come from the net income? Where are the retained earnings and the reserves? What is the depreciation?","PeriodicalId":347116,"journal":{"name":"PSN: Other Social Welfare Policy (Topic)","volume":"54 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2015-11-20","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"115892019","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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