<abstract xmlns="http://www.w3.org/1999/xhtml">Intellectual capital is not sufficiently depicted in the annual reports of Polish companies, although it plays an important role in the operation and market valuation of enterprises. The aim of the paper is to evaluate the possibilities of using the KCETM method for depicting intellectual capital in the enterprise annual report – in particular, in the integrated reports. The KCE method developed by Lev has been modified in the area of normalized revenues, of which the evaluation method is not controlled by the audit, which results in its subjectivity. We adopted the category of gross profit generated by an enterprise from sales (including a large share of costs of earnings) which is reported by the enterprise. On the basis of the financial data from annual reports, we conducted the Knowledge Capital Earnings measurement of selected IT companies and this method was evaluated by comparing the results with the market and financials indicators of the companies and their Market-to-Book Values.The conclusions from the analysis confirmed a strong correlation of intellectual capital (evaluated by modified KCETM method) with market indicators and return on equity. The method of intellectual capital evaluation of Market-to-Book Value did not give results related to market and financial indicators.Therefore, based on the reported gross profit on sales, the KCETM method should be recommended as a measure in the integrated reporting of an enterprise.</abstract>

Evaluation of the Possibilities of Using the Knowledge Capital Earnings Method (KCETM) for Depicting Intellectual Capital in the Annual Reports of Polish Companies

<abstract xmlns="http://www.w3.org/1999/xhtml">The main objective of this paper is to analyze one of the alternative sources of financing - equity crowdfunding - from the point of view of managerial processes. Based on the case study analysis and the comparative analysis the problems and challenges of raising funds using equity crowdfunding are discussed, comparing the findings with the issuing of shares. The analysis show that although many of the activities undertaken in raising funds through issuing shares and equity crowdfunding are similar, the managerial processes in the case of equity crowdfunding require from the company first of all building and caring about relationships with investors, rather than showing and proving effectiveness. In exchange for the low legal requirements, the equity crowdfunding investors expect good communication even if the promises are not fulfilled.</abstract>

The Problem of Alternative Financing Source Management – The Equity Crowdfunding Case

<abstract xmlns="http://www.w3.org/1999/xhtml">The article deals with product costing in a manufacturing company and change of costing methodology from normal to standard costing caused by a new integrated information system implementation. The aim of the article is to show the impact of a new integrated information system on product costing. In order to show the consequences of changing the methodology of product costing from normal to standard costing variances between standard costing and normal costing in an international production company were analyzed. For this research comparative analysis was used of unit costs before and after the new system implementation for finished goods. Ten percent of the items had a variance of more than 30% which was caused by errors in the new system settings and mistakes in the normal costs in the old system. The impact of the change of the costing methodology was shown by calculation of the difference between normal cost values and standard cost values ten months after the new integrated information system implementation. To verify the accuracy of standard costs settings, standard costs were compared to actual costs for finished goods and semi-finished goods. In the tenth period only 30% of finished goods and 42% of semi-finished goods showed a variance between standard costs and actual costs lower than 20%. It means that for the rest of the items standard cost assumptions should be checked and corrected. The results of the study indicate that a change in product costing methodology driven by new integrated information system implementation has an impact on company revenues. The direction of the change depends on the accuracy of previous system settings. It is impossible to implement a new system without increase or decrease of sales. The most important limitation of the research is that only one manufacturing company was studied. This was connected with data availability. The research methodology can be used by manufacturing companies to assess the impact of new integrated system implementation on their revenues. Literature concerning integrated information system implementation focuses on its advantages and disadvantages therefore the author of the article wants to concentrate on its impact on the profit and loss account, specifically on revenues.</abstract>

Changes in the Product Costing Process Driven by Implementation of an Integrated Information System in a Production Company

<abstract xmlns="http://www.w3.org/1999/xhtml">Reinvestment decisions are based on basic the economic literacy of entrepreneurs because they do not want to affect future liquidity or development activities. The main goal of the article is to suggest a simple decision tree model to describe profit reinvestments in a general way based on results of a primary pilot study (128 interviews), where reinvestment behaviour is affected by specific factors like risk taking, competitive advantage or business experience. After that a decision-making tree is suggested to explain the process of reinvestment as determined by the manager.</abstract>

Department of Business Economics and Management

Profit Reinvestment: Main Motives Supporting Financial Decisions

<abstract xmlns="http://www.w3.org/1999/xhtml">AIMS: The paper investigates the effects of misinformation regarding dividend payouts on bubble formation, asset pricing and individual investment returns in experimental asset markets, when correct information about the expected dividends and their probabilities is also available.METHOD: In two experiments, totaling34 Smith-Suchanek-Williams type double-auction continuous experimental markets (238 subjects), participants were exposed to misinformation regarding dividend payouts in a previous game, with the correct dividend matrix also provided. The misinformation stated the dividends in the previous game to have been much lower or much higher than according to the expected value function. The misinformation was either homogenous for all participants or provided to only half of the investors in a market (heterogeneously).RESULTS:Homogenous misinformation stating that the last game’s dividend payouts were high, led to larger overpricing throughout the game, as compared to baseline (no misinformation) and homogenous misinformation stating that the last game’s dividends were low. In informationally heterogeneous markets, where half of the participants received “high dividends” misinformation and half remained non-misinformed, transaction prices were the lowest compared to the aforementioned treatments. It was also discovered that agents receiving the ‘high dividend’ misinformation had lower returns than non-misinformed participants in the same heterogeneous market.</abstract>

Institute of Applied Psychology, Faculty of Management and Social Communication

Institute of Psychology, Faculty of Philosophy

Misinformation About Dividend Payouts Influences Transaction Prices in Experimental Asset Markets

<abstract xmlns="http://www.w3.org/1999/xhtml">Aim: The aim of the paper is to assess the usefulness of sectoral means in financial analyses of enterprises.Research methods: The article uses a deductive approach to assess the suitability of sectoral means used in analyses of t financial standing of enterprises. The method of analysis and logical construction was used for literature review. The methods of descriptive statistics such as arithmetic means, standard deviation and coefficient of variation were used in order to analyze the data and draw conclusions based on the results.Contribution: The assessment of the usefulness of sectoral means in the context of their variability seems to be a crucial aspect for the analysis of a company’s financial situation. When assessing the financial standing of an enterprise, it is necessary to use a comparative analysis method, based on, inter alia, a comparison in space. This type of comparison requires the use of sectoral means, whose assessment is extremely important to drawing reliable and correct conclusions regarding the financial situation of a company.</abstract>

Edyta.Mioduchowska-Jaroszewicz@usz.edu.pl

Usefulness of Sectoral Means in Financial Analyses of Enterprises

<abstract xmlns="http://www.w3.org/1999/xhtml">The article discusses the problems of commercial banks related to the deterioration of their image as employers, especially in eyes of the millennial generation, which soon will become the most attractive category for employment in modern business. The main criteria that guide the millennial generation when choosing a future job are identified. A detailed analysis of the strengths and weaknesses of banks as employers has been carried out, and advice for image improvement has been formulated, aimed at the young audiences of potential bank employees. It was proven that banks should build not only an effective PR campaign to create a powerful image of a reliable employer, but at the same time they should establish a reliable system to counteract unfair competition, ultimately aimed at destabilizing financial institutions, which are most sensitive to image problems.</abstract>

Adjusting Bank Recruitment to the Specifics of the Millennial Generation as Conditions of Attractiveness Decline for Employment in the Banking Sector

<abstract xmlns="http://www.w3.org/1999/xhtml">The article is an attempt to assess whether Stock Ownership moderates the relationship between corporate diversification and CEO compensation. Based on agency theory, we develop the hypothesis of whether when CEOs hold a large fraction of their firms’ outstanding stock, the CEOs are acting more as owners or shareholders than employees. This reduces the principal and agency relationship of agency theory, since CEOs are acting as owners rather than employees; thus the demand for further stock-based compensation is likely to be reduced because the interests of CEOs and shareholders are relatively aligned. For the purposes of this study, a sample of 2,448 CEO compensations across 1,622 firms from 1997 to 2002 was used to test several hypotheses. Corporate diversification was divided into two categories; international diversification and industry diversification. To test the hypotheses, multiple regression analysis was employed to examine stock ownership as a moderator variable on the relationship between international diversification and industry diversification and CEO total compensation with tenure, age, duality, and gender as control variables. The results indicate that stock ownership negatively and significantly influences the relationship between International diversification and CEO compensation. Additionally, the findings also confirm that stock ownership negatively and significantly influences the relationship between industrial diversification and CEO compensation. Our results are consistent with our hypotheses and indicate that firms with lower Stock Ownership produce larger interaction effects to increase international diversification and total compensation pay to CEOs, and firms with lower Stock Ownership, produce larger interaction effects to increase industry diversification and total compensation pay to CEOs.</abstract>

Department of Business, Management and Accounting

Corportate Diversification and CEO Compensation: Evidence from the Moderating Effect of Stock Ownership

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Financial Internet Quarterly

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