Patterns of customer behavior in online shopping and Introduction to Internetbased e-commerce environments

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1 Patterns of customer behavior in online shopping and Introduction to Internetbased e-commerce environments 1, Dr. Ali Asghar Lotfi *2, Mehdi Eskafi Asl 1 1 M.A. in Accounting, Department of Accounting, Islamshahr Branch, Islamic Azad University, Islamshahr, Iran 2 Assistant Professor, Department of Accounting, Islamshahr Branch, Islamic Azad University, Islamshahr, Iran *Corresponding Author ABSTRACT The purpose of this study is to investigate the effective mechanisms of banks to combine of sources in order to gain profit. To achieve this objective a descriptive method was used in this study, analytical methods, descriptive statistics, the rate is used. This means that in order to collect information related to the literature,library method is used and also in other parts of the study was to determine the optimal combination of bank financing expenses, capital structure, the analytical methods used that In this section the relationship between capital structure and cost of capital is evaluated. Weighted average cost of capital for the purpose of data analysis methods (WACC) was used.the findings suggest that the optimal mix of sources of capital cost perspective, there is an inverse relationship between the two is a sign of an optimal capital structure. (most financing of the cheapest sources) according to the table above it becomes clear that the correlation between capital structure and cost of capital for the year 1391 is equal to.2, which is significant at the 95% level. Therefore it can be concluded that the combination of sources from price of 1391 all the money in the Bank of Sepah is not optimal. Key words: Combination capital structure, Weighted average capital, Bank financing. Expressed concern Today, especially after the 199's crisis bankrupt bank, capital structure and banks' capital ratio is one of the most important issues in the field of banking and legislators have decided to prevent a repeat of such incidents in the future and to protect the health of the domestic and international financial and monetary system, adopt measures in this regard. In this regard, the Basel Committee in 1988 revealed that the bank's capital must be at least 8% of the weighted risk assets.another reason for the increase in banks' capital ratio to enable them to deal with the risk of non-repayment of credit on behalf of borrowers (Credit Risk) is.because of the crisis, the Bank's share capital is used as a shield against bankruptcy. The objective of ensuring the health of banks against default risk and maximize the benefit of its shareholders has led to optimize the capital structure (to minimum the risk of bankruptcy and maximize shareholder profits) is attention Banking and Finance thinkers.therefore, to optimize the capital structure, understanding the different sources of funding for banks and banks' financing costs that are incurred and also calculate the cost of each of them for bank's financial managers for decision on financing and directing the bank tends to attract a certain resource providers (cheap and low risk) to maximize the value of the bank is very important. Most theories of capital structure to relationship between capital structure, capital cost, risk and value companies now recognize and also Iran's conducted studies in this issue, verify the relationship between the cost of capital structure and capital cost and company's risk. Because of the nature of the activity and capital structure of banks and the company is different, the question arises as to whether an optimal capital structure also to make reasonable financial risk for the bank, to maximize the return on equity? How to optimize the composition of the mixture? In fact, the Bank's financial resources and capital structure are items that on the left side of the balance sheet are shown. These are resources that Bank to finance its assets. These resources are divided into two categories, equity (including capital and retained earnings) and liabilities (including deposits with the bank, borrowing from other banks, borrowing from the central bank, managed funds). reduce financial risk, thus reducing the risk of bankruptcy and at the same time increasing the profitability of companies or banks due to legal restrictions that exist in this area, there buckle up Socles it might be able the optimum combination of the bank to determine and to enforce the funding formation. To reduce business risk and financial risk,bank capital ratio is one of the important topics.

2 GMP Review, 215; V16 Because of those risk-based capital standards by the Basel Committee in 1988 to cover credit risk is done. In this regard, the aforementioned capital structure and cost of capital calculated and their relationship with each other, using the Pearson correlation coefficient is determined. Small banks and small businesses have similarities and differences. One of the main differences between the banks and companies is that banks are financial medium companies that mass still payment from the people and take them to suppliant and for resources to acquire customers in financial services, benefits and prizes are. Because of it,the banks in comparison to companies, should take care to all prices of services that give to customers to calculate their capital costs. Therefore, banks in order to calculate their capital cost should calculate their deposits cost. Central Bank of the Islamic Republic of Iran in the calculation of the cost of collecting the money, there's a recipe to be addressed here. According to the guidelines,major sources of banks are: 1.Deposits current loan 2.The loan savings deposits 3. The loan term deposits (investments deposits of short-term and long-term) 4. Funds (including profit and loss account reserve and mary) 5. Received loans (including loans from the central bank or other banks) Cost of capital A major part of the bank's deposits included in exchange for the deposits and bank charges will be incurred which vary according to the different types of deposits. These costs include interest and bonuses paid to the holders of these deposits and also the services that will be provided to owners of such deposits. Thus, profits and bonuses paid in operating costs and services offered on personnel costs, official_ organization, depreciation and doubtful debts expense crystallizes. To calculate the cost of each deposit fee staffing, organizationalofficial,depreciation and doubtful debts expense was allocated to each of these deposits. Allocation and how to calculate the cost of each of these deposits will be illustrated in detail.costs that is incurred by banks to mobilize their resources include: (A) Operating costs According to Article (3) of the interest-free banking operations, Relationship bank depositors with deposits, short and long term as attorney and client is Bank deposits entrusted to them on behalf of depositors of the aforementioned clauses contained in investing. And profits after deduction of fees shall be paid to depositors. And because the pay and benefits should be considered in calculating the cost of deposits, so called as operating expenses.the rate and amount of loan savings deposits prizes to be part of the costs. (B) Personnel expenses These costs represent a large part of other operating expenses of bank, including cost savings and staff salary and other payments to the employees of bank. Banks allocates the costs for the facility and resource allocation, and provides other banking services directly (by line staff) and indirectly (by administrative staff) is incurred. These costs are directly subordinate staff activities. (C) administrative-official costs These costs include the cost of travel and missions, media, supplies, stationery, clothing employees, telecommunications, fuel and light, formalities, rental and maintenance of office machines, buildings, vehicles, furniture, travel and transportation expenses is. (D) Depreciation costs The cost of depreciation of fixed assets (machinery, office buildings, facilities, vehicles, etc.) as well as organizational-administrative costs allocated. Note: For allocation of personnel costs, administrative-organizational and amortization cost, a questionnaire was developed and based on its findings, the costs of above between the various deposits is appropriate. (E)Doubtful debts costs The cost of repayment of interest and principal due to lack of facilities to its customers and the balance of the deposit. Therefore, based on the balance of deposits per year, the cost is allocated to them. (N)Relationship between legal deposit and debt with financing costs Because, as part of the deposits as legal deposits and bonds (of the loan current deposits and deposits with no operating costs) will be blocked and investment banks cannot use them. Therefore,the stagnation of sources will have the costs for banks to be included in the cost of deposits.since the law for the central bank to bank deposit interest paid (a Drsddr year) and also has the benefit of their bonds,therefore, we must bond interest costs as a factor has impact in calculating the cost of deposits. Current deposit loan costs Deposit loan current benefit because it does not belong, no operating cost, but this deposits has allocated personnel costs, administrative, organizational, depreciation and doubtful debts expense into account. Because the owners of the deposits compared to other depositors, the banking services (payments and receipts, facilities, letters of credit, guarantees and other banking services) to receive and no providing appropriate services resulted in the transfer of bank deposits to other banks (the banking services provide better and faster). The basic objectives of the research Obtain an optimum combination of funding sources to improve the performance of Bank Sepah 259

3 GMP Review, 215; V16,Evaluation of the current sources of Bank and the impact of each of these sources of price control over money Obtain the relationship between the interest rate on bank deposits and the value of all the country's currency Presented a model in which the combination of sources that both coner satisfaction, and deposits with the Bank Sepah is able to maintain its value. Detailed objectives: 1. Investigation of the optimal capital structure and capital structure of Bank Sepah real 2. Check the status and composition of the various types of deposits in financial assets of Bank Sepah 3. Check the position of the banking system loans receivable financing assets of Bank Sepah 4. Check the status of equity in financing assets of Bank Sepah 5. Calculate the cost of debt capital for Bank Sepah during 1385 to 1391 and drawing its process for these years. Hypothesis of research In order to answer the research question, the following hypotheses have been proposed. First hypothesis: the optimum combination of all the money in the bank to reduce the price. The second hypothesis: the optimization of the combined resources of the bank and the money value of all there is a significant relationship The first sub-hypothesis: Sepah Bank funding costs is not optimal. The second sub-hypothesis: Credit Risk of Bank Sepah is not optimal. Methodology This research in perspective of objective is based on application and from method perspective, Is Correlation that researchers sought to examine the relationship between variables together. In this research, Analytical research methods, descriptive statistics, the rate is used. This means that in order to collect information related to the literature, library method is used And also in other parts of the study was to determine the optimal combination of bank financing expenses, capital structure, the analytical methods used which In this section the relationship between capital structure and cost of capital is evaluated. In addition to assessing the bank's cost of capital for each of the different years,weighted average cost of capital usedand finally to depict changes in the cost of capital is 1385 to 1391 years and to compare each item of capital structure changes over the years,process is designed. The sample is Bank Sepah. Thus, the financial information of the bank is taken and the bank's results to be generalized to the total bank. Information to describe the theoretical foundations of the research and data necessary are to test the hypothesis. Required information includes information on first and second groups of data. The first group of data: libraries method, reading books, magazines and visiting the sites is achieved.the second group of data: According to the research, one of the most appropriate methods of data collection, compiled financial statements specimen bank (Bank Sepah) is achieved with respect to the financial statements of the sample. 3. The method of data collection in this research includes library and documentation methods reading books, magazines, articles and dissertations written in Farsi and English, and field studies based on the data collected. To analyze research data from both descriptive and inferential statistics were used. In this regard, the descriptive statistics to measure the Bank's cost of capital for each of the different years of the weighted average cost of capital (WACC) was used. Thus, once the capital cost of each item separately, the total capital cost of the bank using the weights of each of the items of capital (amount of funding sources) is measured. Comparison of process Process is the long-term changes in the meantime series, i.e. natural history series in the long term said "process". The method to map the changes in the cost of capital of 85 to 91 years, and compare each item of capital structure over the years, are used. Analysis of the data To investigate the correlation between the composition of sources of Bank Sepah and all the money the value of the Pearson correlation coefficient was used. The following table shows the test results Pearson correlation coefficient in the relationship between capital structure and cost of capital for the period under review shows. Table 1. The situation of cost of capital and the amount of each item of capital in Bank Sepah 91 Debt to the Bank Mortgage loans from other banks Liabilities to other banks Other deposits Howe other liabilities Five-year deposit Three-year deposits Two years deposits Annual savings Special Deposits Short-term deposits Savings deposit Current deposit Resources Headlines 26

4 GMP Review, 215; V Percent of financing Cost of Capital First hypothesis: The optimal combination of bank sources has reduced the cost of money. To optimal combination of bank sources,the purpose of this work is the optimal mix of resources to increase profitability and enhance the bank's capital adequacy rate and banks Due to increase profit margins and increase the profitability targets that not to seek to reduce the value money, thought Only to save capital and own deposit that It also increases the cost of capital and consequently increase the value of the money is finished. In connection with the optimal mix of sources of capital cost perspective, there is an inverse relationship between the two is a sign of an optimal capital structure. (i.e. most financing of the cheapest sources) according to the table above it becomes clear that the correlation between capital structure and cost of capital for the year 1391 is equal to.2, which is not significant at the 95% level. Therefore it can be concluded that the combination of all the money in the bank of benchmark price of 1391 is not optimal. The second hypothesis: Between the optimization the composition of the bank s sources and the value of all money there is a significant relationship.according to the interpretation of scattering data on the bank of the sample which has 12 different sources, 2% of the variation of the value of money is finished. And 98 percent of bank resources is related to other factors.about the financial cost of Bank Sepah, given that the cost of financing in the banks depends on many factors and circumstances, it can be stated that Because of the vagaries of inflation in recent years and a stable rate of bank financing in banks is because of government and the first sub-state hypothesis is confirmed and the cost of financing the bank is not optimal.about the credit risk of Bank Sepah can be said due to the rise in long-term deposits in banks in recent years, the second subhypothesis is rejected and Credit Risk of Bank Sepah is optimized and bank with minimal credit risk is currently facing.one of the main criteria to evaluate the optimal combination of bank resources, is the cost of equity capital. Therefore, combining of bank s sources have known as a mix of funding sources that have the lowest weighted average cost of capital. This is the cheapest way to acquire resources (to reduce operating costs) can be made to increase the profitability of the banks involved. The following table shows the amount of each item of cost of capital and capital of Bank Sepah in 91. Note that the statistics presented in Table 1 of this report. The following compound according to sources tends to be cheap but also reduces the cost of capital and also reduces the power of profitability in long-term of banks and will reduce the risk (default risk). Table 2. The current composition of the Bank s sources Table 3. Composition of resources in equally Combination of debts in equally is impossible and increases cost. Table 4. The current composition of resources by the increasing in long-term deposits 261

5 GMP Review, 215; V Increase in long-term deposits will increase the cost. Table 5. Observe the industry average in long-term deposits By the middle of the banking industry in the proportion of long-time deposits to total deposits increased cost. Discussion and Conclusion The purpose of this study was to investigate the mechanisms of banks effectively combine resources in order to achieve profitability. The purpose of the survey of this research was based on the bank's financial statement. As shown in the analysis of findings,the findings suggest that the optimal mix of sources of capital cost perspective, there is an inverse relationship between the two is a sign of an optimal capital structure. (i.e. most of financing of the cheapest sources) according to the table above it becomes clear that the correlation between capital structure and cost of capital for the year 1391 is equal to.2, which is significant at the 95% level. Therefore it can be concluded that the combination of resources at Bank Sepah from the value of all the money in 1391 year is optimal. It can be said that most of the existing theories of "determine the optimum combination of funding sources" in relation to capital structure with cost of capital, the banks risk and the value of the bank recognize. In order to actual relation between capital structures with the credit risk of banks and investment issues is important. Due to the close relationship between capital structure and cost of capital and financial risk Also, the cost of capital is the value of the profit on the other hand, Financial manager and it is based businesses In order to reduce financial risk and reduce the risk of bankruptcy And at the same time increasing the profitability of your organization Using the mechanism of capital structure due to legal restrictions that exist in this action, The optimum combination of funding sources may be able to determine and implement the maximum value of the bank.the capital structure of banks to deal with credit risk, capital ratios are important issues. Therefore, the risk-based capital standards by the Basel Committee were established in 1988 to cover credit risk. Since the application of international capital adequacy in international rate of 8% assets is considered, but the ratio for Bank Sepah in 1385 is equal 6.5 and for 91 year is equal 5.3. The optimal combination of proposal rate Percent Resources Deposit loan Short-term deposits and savings Special Deposits Annual savings Two- years deposits Three-year deposits Five-year deposit Debt to the Bank 262

6 GMP Review, 215; V Deposits and other liabilities Equity Reasons: 1. Due to the capital adequacy 2. Increase his contribution to the increase in lending and profitability through facility 3. The facilities of the central bank to maintain funds 4. Due to the low cost deposits 5. Reduce credit risk and to minimize the cost of capital Limitations Limitations of the study include the following: 1-to take financial information about items of capital structure (debt and equity rights) to obtain detailed information about the types of short-term deposits separately (general and specific) and Long-term (one year, two years, three years, four years and five years) and for a breakdown of loans from the banking system due to lack of cooperation by the relevant authorities insisted that it was somewhat difficult to realize And after a long time and a lot of this information was obtained after processing. 2- Limitations resulting from the absence of certain financial information in financial dates. About this issue, there is not the background information on the long-term deposits to breakdown at financial statements after some years. 3-Limitation of inaccessibility and rarity of the material relating to the capital structure of banks and the lack of such research. Suggestions Suggestions for additional content to be classified under two categories. Suggestions for Bank Sepah and banking system 1. Due to the nature of the activities and assets of the bank, the banks are trying to increase the minimum acceptable. 2. Given the importance of long-term resources in bank financing, in order to increase the amount of long-term savings deposits to total deposits taken and compared to the industry average raise. 3.With regard to the non-operating costs rate by increasing the volume of deposits and to consider constant of other factors decreases, It is recommended that a mechanism adopts the Sepah Bank that the volume of deposits by increasing the amount of funds in the account (not by increasing the number of accounts with low deposits) increase. Suggestions for Future Research 1. It is recommended that, according to the model presented in this study and the use of a mathematical model (OR) for the optimization of the resources provided. A. using of operating costs of each resource (Drtab purpose) B. The use of non-operational cost of each deposit (the objective function) C. Using personal funds, institutional and administrative capacity to absorb the amount of depreciation expense on deposits according to their allocation rate D. Compliance with the minimum capital E. Compliance to industry-average proportion of deposits and debts G. Compliance with the industry average level of long-term deposits to total deposits 2.Given the importance of cost of capital in optimizing the capital structure and, is proposed to calculate the non-operational cost savings that are very time coning, and difficult to be precise, objective and precise is the greatest possible extent methods. References: 1. Ali Asghar Anvari Rostami, Investment and financial management, 1th edition, Tehran, Tarahan Nashr, Marshull David and VenkataramanSubu (1999) "Bank Capital Standards for market Risk: A welfare Analysis", European Finance Review. 3. Prescott,EdwardS., Regulating bank capital structure to control Risk, /Prescott. 4. Marshall David And VenkataramanSubu(21) Bank Capital Standards For Market Risk:A Welfare Analysis,European Finance Review. 263