3.1 Introduction to Research Methodology:
This chapter includes methods to be used and applied to run into the designed aims and to accomplish the defined intent of this research. Consequently, this chapter will discourse the methodological subjects in relation with this survey as follows:
Types and signifiers of research doctrine.
The different methods for planing the research that we can utilize for the purpose measuring any subject.
Finally, exemplifying methods used for informations aggregation in footings of their content, and all other characteristics.
The quality of the research is an of import component, therefore it will be mentioned including a treatment sing analysis instruments, completing with bespeaking to the research ‘s restrictions. And the Ethical considerations, the restriction of the survey and plagiarism.
3.2 Research doctrine:
Focus was paid to research doctrine as an of import component by many research workers like ( Lewis, 2003 ) . This doctrine depends on the ways that can be implemented to make cognition by the research worker. There are two major methods to comprehend the doctrine used in research: ontology and Epistemology. Each method has the ability to impact the research ‘s map otherwise.
Epistemology regarded as a division of doctrine that trades with the inquiry what makes cognition able to be accepted in a peculiar field. The chief involvement in the epistemology environment is the possibility to follow specific set of processs, norms or regulations of natural scientific discipline when interesting in covering with the societal universe. Three places of epistemology natural scientific disciplines present to cover with the cognition: positivism, interpretivism and pragmatism ( Bryman and Bell, 2003 ) .
Positivism as defined by Creswel ( 2003 ) , is the initial portion for the research worker that comprises the debut of the most valuable theories in relation with the research topic. After that, the research worker will foreground the methods he intends to utilize as tools for informations aggregation that will implement the theories.
Another signifier of research doctrine is Interpretivism, which can be defined as the research worker ‘s competency to understand human behavior and perceptual experience ( Saunders, 2003 ) .
Harmonizing to Saunders, Lewis and Thornhill ( 2007 ) , It is an epistemic stance relates to scientific probe, it looks like positivism in the premise that the scientific manner for bettering cognition and for utilizing natural and societal scientific disciplines to the same type of informations assemblage and reading.
The importance of pragmatism is that the presence of objects in world independent from the human thought.
The two chief types of the pragmatism are the undermentioned:
Ontology is besides a division of doctrine that trades with all subjects sing the sphere the nature of societal constructions. The importance involvement is to make up one’s mind if societal concepts are aims, or consequence from positions and plants of people ( constructivism ) . ( Brymen and Bell, 2003 ) .
3.3 Research attacks
Two research method available and were used to understand, deductive and inductive methods ( Brymen and Bell, 2003 ) .
This undertaking will utilize both methods.
Deductive method is used to exemplify how the research is in relation with theory ; this is done by the research worker who deduces premises on the footing of what he knows in a specific sphere, and the theoretical involvement in relation with that sphere, so these premises are possible to travel through empirical probe. The premises consist of perceptual experiences that need reading to research constructions. To construct societal constructions, societal scientists have to make up one’s mind the manner for garnering informations in relation with the positions that formulate the premise.
The other manner for apprehension is inductive, which states that the theory is the end product of the research, which means the presence of observations sing specific phenomena, from observations the research worker is able to do his decisions.
Deduction method implements some of the initiation constituents and the research should roll up the needed information to carry on the theoretical reaction, it is likely that he will necessitate more informations to bring forth the instance in which theory may or may non be hold ( Bryman and Bell, 2003 ) .
3.4 Research intent:
Performing a significance research implies replying and run intoing the aims, and how these aims were established will ensue in explanatory, or descriptive replies, but the research worker may hold more than one aims at the same times ( Saunders, Lewis and Thornhill, 2007 ) .
3.5 Research schemes:
There are two functional schemes in carry oning a concern research, qualitative and quantitative scheme. The research workers tempt to utilize these schemes to make up one’s mind the relevant technique to utilize in the processs informations aggregation and analysing.
It is know that quantitative scheme is the 1 that uses numerical informations, like those obtained from the questionnaire technique, or from graphs, while the qualitative scheme uses non-numerical informations, like those from the interviews, from images and pictures cartridge holders ( Saunders, Lewis and Thornhill, 2007 ) .
This research will utilize qualitative scheme
3.6 Different Research Designs:
Harmonizing to Bryman and Bell ( 2003 ) , Research design is capable to present the construction for informations aggregation and analysis. Recently, there are five methods for research design functional in the different types of research:
Cross sectional design
Case survey design
3.6.1 Cross sectional design:
Cross sectional design frequently regard to as societal study, it collects informations on several instances, because the research worker may confront fluctuation in many variables, and he needs a greater figure of participants in his sample.
3.6.2 Comparative design:
This scheme uses two or more instances, in order to make better apprehension, because of the comparative nature of the research. This type of scheme can utilize the aggregation of qualitative or quantitative informations ( Bryman and Bell, 2003 ) . ( Bryman and Bell, 2003 ) .
This type of scheme normally used when the research worker survey is to measure societal topics. This scheme depends on two variables which are dependent variables and independent variables ( Hussy, 2003 ) .
However to use this scheme, there are facts that should be taken in consideration, such as:
The relevant theory should be used.
Explaining any sample related with the theory.
Explaining any alterations or alterations in measuring the program and the variables.
Case Study design:
This type of scheme is in relation with topographic point, location, state, organisation, people and houses. It is characterised by extended probes sing the nature of the survey ‘s inquiry. The consequence of instances surveies frequently more understanding the research environment ( Bryman and Bell, 2003 ) .
This scheme is the most relevant scheme to this type of research, because it will reply the designed inquiries and it will run into research ‘s aims. Case survey will be applied on the Bankss ; it will get down by explicating the Islamic Bankss doctrine, and to demo the difference between the Islamic and the commercial banking systems.
In add-on, there will be a comparing between the Islamic and the commercial Bankss by measuring their fiscal public presentation of the two systems over the period ( 2005-2009 ) utilizing statistical and fiscal methods. Furthermore, this research will carry on a comparing between the two systems of Bankss during the recent planetary fiscal crisis, and the methods they used to meet or to avoid the impact of the crisis. This comparing would be done to cut down the associated hazards of crisis to find and use the most effectual system during the period of the survey.
This type of research design used by the research worker to supervise any possible alteration in research ‘s points overtime, it is used to lengthen the study research period ( Bryman and Bell, 2003 ) .
3.7 Research ‘s Quality:
Quality of the research comprises four basic characteristics:
3.7.1 Research ‘s cogency:
Harmonizing to the Hair ( 2007 ) , Research ‘s cogency depends on the undermentioned factor:
Ambiguity the relate to the waies
Harmonizing to this type of research the first four factors are non in relation with this survey, and ripening has small impact on the research, consequently, this survey uses secondary informations that come from different resources.
3.7.2 Research ‘s Dependability:
Dependability is the mean by which to guarantee the consequences through proving the consequences that emerge from the analysis ( Lewis, 2003 ) .
Four menaces might look from dependability:
Bias from the participants.
Participants ‘ mistake.
In this research merely observer mistake and perceiver prejudices are in relation with the survey. This research used different methods for measuring the secondary informations, including the followers:
Datas collected from internet resources.
Banks ‘ web sites.
In a quantitative research, the research worker understands that his consequence may be useable for from the research environment, and range. And they could be used as footing and managers one even applied in different research. Consequently, he works to bring forth a sample that will stand for greater population to be generalising ( Bryman and Bell, 2003 ) .
Finding of this research in footings of informations analysis and how they reach the decision will demo the reader the consequences of this research, and how the work has been conducted, besides the relation between informations analysis and the decision ( Jewell and Hardie, 2009:94 ) ( Jewell, Hardie, 2009:94 ) .
3.8 Ethical considerations:
Research moralss means what ways the research worker will utilize to explicate, clear up and plan the research topic, and how the research worker can acquire entree, collect, procedure, analyze the information and compose the research outcomes taking into history more ethical consideration ( Saunders, Lewis and Thornhill, 2007 ) .
This research is conducted harmonizing to all the ethical regulations and guidelines of Coventry University Business, Environment and Society and throughout this research I agree to follow these ethical guidelines and it is exist in the undermentioned web site: hypertext transfer protocol: //www.coventry.ac.uk/researchnet/ethics/statement. As I mentioned earlier, this research is merely utilizing secondary informations and these informations can be accessed easy and it is available any clip for me and I will merely utilize it for the intent of this research.
The writer understands the rational belongingss, and whenever the writer uses work for other writer it will be to the full referenced and will be rewritten in the writer ‘s words without any alteration in the original content thought. The writer will supply a chapter at the terminal of this research with all of the mentions used in carry throughing this research utilizing the Harvard Reference Style.
3.10 Data aggregation Methods:
When the research worker initiates a replying the research inquiry, or when he reaches the research ‘s aims he involvements in secondary informations, researching informations he already gathered to happen out what he did in the research ‘s context.
These informations may include articles, books, one-year studies, newspapers, published diary and natural informations ( Saunders, Lewis and Thornhill, 2007 ) .
This research aims to analyze the fiscal public presentation and stableness for the top 10 commercial and the top 10 Islamic Bankss, in order to accomplish these aims, the research worker must utilize the fiscal information to these Bankss to analysis and entree the consequences, and this fiscal information was issued in the signifier of fiscal statements in the one-year studies of the Bankss, consequently the research worker will utilize the secondary informations by use the web sites of these Bankss to obtain the fiscal statements.
The other grounds of choosing merely secondary informations are: the researches do non hold an entree to any bank ; the sample Bankss are in the different states in the universe, and because of limited clip to carry on the research.
3.10.1 Secondary informations:
Harmonizing to Saunders, Lewis and Thornhill ( 2007 It is possible to roll up the secondary information by both qualitative and quantitative, that can be employed in explanatory in descriptive research. There are three subgroups of secondary informations docudrama, survey-based and informations obtained from many beginnings.
3.10.2 Secondary informations resources for this research:
The focal point in secondary informations aggregation for the Islamic and commercial Bankss was sing the recent articles and diaries through the cyberspace web sites, university electronic database and books which included:
Literature reappraisal of most recent published diary that is related to ‘the Islamic and commercial Bankss ‘ from scientific discipline direct, EBSCO, Journal of Banking and Finance, Journal of Islamic Economics and Finance, Journal of Finance, Journal of Islamic Economics, Banking and Finance, Electronic Journal of Social Sciences.
Literature reappraisal of most recent published book about ‘the history and the ranking of the Bankss ‘ from Coventry University electronic book and Google bookman.
Literature reappraisal of most recent published diary and articles that are related to ‘the fiscal crisis ‘ from scientific discipline direct, EBSCO, Journal of Risk Management in Financial Institutions, Journal of Financial & A ; Quantitative Analysis, International Journal of Monetary Economics and Finance, International Journal of Political Economy,
3.11 The Method Applied in the Analysis:
For measuring and measuring the Bankss ‘ fiscal public presentation, it is possible to utilize different rating methods, such as fiscal ratio analysis ( FRA ) , Data Envelopment Analysis ( DEA ) , statistical Package for Social Sciences ( SPSS ) and Stochastic Frontier Approach ( SFA ) .
There are several fiscal ratios could utilize to find the fiscal public presentation and stableness for the Bankss in order to obtain obvious positions about the fiscal place for these Bankss, but this research is covering with analysis 20 Bankss in 11 different states, and as a resulting of these different in the states, Torahs and fiscal statute law, there appear important different in the nature of the fiscal statements were issued, which lead to curtail the research worker in the choice the fiscal ratios that are compatible with the fiscal statements of these 20 Bankss. Therefore, the research worker will choose the fiscal ratios that sharing with each other by utilizing the chief points in the balance sheets and income statements, on the other words, the commercial and Muslim Bankss portion their fiscal statements by the followerss:
Net Net incomes.
Net incomes per portion.
Consequently, the research worker adopted these cardinal points in the fiscal statements in order to find the best fiscal ratios to accomplish the aims of this survey, therefore the research worker will utilize six fiscal ratios which are:
Net net income border ( NPM ) .
Tax return on equity ( ROE ) .
Tax return on assets ( ROA ) .
Assetss turnover ratio.
Net incomes per portion.
Then the horizontal analysis will used due to the utility of this method when we hebdomad to find the strength and failing points for the bank, in add-on to the used of ( SPSS ) .
3.11.1 Fiscal ratios analysis
The ratio is a simple look of a figure comparative to another figure, in order for the ratios to be considered as meaningful indexes there should be clear and specific relation between the two Numberss used in ciphering each ratio. More frequently the demand call to hunt and prove the nature of the information, or the used basic Numberss in ciphering the ratio in order to explicate and understand the full significance of this relation, and the ratio by itself may non intend much unless it is compared with other ratios in different twelvemonth or with the industry standard ratios.
By and large, it is possible to split the fiscal ratios into four basic classs as follow:
Set of ratios that connect net incomes with gross revenues to show the extent of sale ‘s ability to bring forth net incomes, and the ability of Bankss to utilize their equity and assets to bring forth net incomes
Net Net income Margin ( NPM ) :
This ratio used to find the extent to which the house has the ability to meet the hard state of affairss that may emerge either from diminutions in the merchandise ‘s market monetary value or because of the rise in the merchandise ‘s fabrication outgos. In add-on, this ratio can be used to mensurate whether there is a diminution in the gross revenues volume, and to mensurate the net net income volume attained after the involvements and revenue enhancements per dollar from the grosss. Finally, the higher the ratio indicates that the house is more profitable and has a better control over the costs ( variable, operating and fiscal costs ) comparing with the other viing houses.
Tax return On Equity: ( ROE ) :
Besides called Return on Net Worth, and used to mensurate the volume of the achieved net income as a per centum from the common stockholders equity. Thus it is the norm of the net net income the investors achieve from puting their money, as a return on their hazard to utilize their money. This ratio indicates at the direction competency in runing the stockholders ‘ financess.
Tax return On Assetss: ( ROA )
This ratio considers an index to mensurate the extent of the house ‘s profitableness relation to its entire assets. In add-on, it measures the direction efficiency in utilizing the assets to bring forth the net incomes, and it is called ( Return on Investment ) , and it greatly depends on the type of industry and the volume of the used assets in the production. Consequently this ratio is used to compare between houses within the same sector to cognize the volume of net incomes resulted from puting the assets.
2 ) Efficiency or Activity ratios:
These ratios used to measure the extent to which the house ‘s direction are successful in pull offing the assets in order to bring forth gross which considers the basic beginnings for the net income.
Assetss turnover ratio
This ratio considers one of the of import ratios to mensurate the efficiency. This ratio measures the extent of the ability of the Bankss in utilizing their assets to bring forth the grosss, and it shows the scope of bring forthing gross from each dollar of assets.
3 ) Capital construction Ratios:
These ratios that called solvency ratios serve as instruments to measure the extent of the house ‘s ability to pay its long term duties, besides measures the extent of the funding policies success used in the house, and in equilibrating between external and internal funding resources, so the contemplations of its policy on fiscal purchase hazard.
The most of import ratios used in this field the followers:
Funding the assets of the bank can through two ways:
Liabilitiess ( Borrowing )
Equity ( retained net incomes + capital portion )
When the Bankss require financing new assets, they make the funding determinations based on the costs and the hazards, whereby borrowing considers less dearly-won than equity, but equity considers less hazardous than financing through adoption. Consequently, the importance of analyzing the pitching ratio appears to find the fiscal hazards that the Bankss meeting.
This ratio was measured based on the ratio of the entire liabilities to the entire assets.
4 ) Market Ratios:
These ratios serve the portions analysts in executing their undertakings when measuring the houses ‘ public presentation, besides serve the present and the prospect investors covering and working in the fiscal markets to cognize the attitudes of the stock market monetary values.
The most of import ratios used in this field the followers:
Net incomes per portion ( EPS )
Harmonizing to the 33 international accounting rule, the net net income or net loss for the period for the common stock holders is the net net income or loss after subtracting the amount of the net incomes for the holders of the preferable portions, and all the recognized points of the grosss and outgos during the period, including the revenue enhancements outgos, the un-usual points, and minority ‘s equity mentioned in finding the net net income or loss for the period.
Consequently, this ratio illustrates the Bankss ‘ ability to bring forth net net incomes to the stockholders per-share ; moreover many of the investors depend on it in their investing determinations because it is an of import index sing the Bankss fiscal public presentation.
3.11.2 Horizontal Analysis:
Horizontal Analysis is an indispensable method used to find and to exemplify the fluctuations in the entire assets, entire equity, entire liabilities, net net income, and entire gross of the Bankss over period of clip.
3.11.3 ( SPSS ) Statistical Package for the Social Sciences:
SPSS a computing machine plan for statistical analysis introduced in 1968 by Norman H. Nie, used to measure variables in dealingss with authorities research, Bankss research, selling organisations, study companies, to find whether the variables are input or end product.
( SPSS ) can be sued for the intent analyzing informations direction and certification, and for other types of analysis, such as descriptive analysis, anticipation numerical results, anticipation for placing group and bivariate statistic.
In this paper the research worker calculates the mean and the standard divergence of the fiscal ratios during the period ( 2005-2009 ) to sketch the consequences of the fiscal ratios. In add-on, the research worker will cipher the norm and the mean of the standard divergences of the survey ‘s period in order to give a clear apprehension sing the fiscal place of the Islamic and commercial fiscal systems.
However, Mean can be defined as “ norm of absolute difference between each value in a set of values, and the norm of all values of that set ” .
Standard divergence is the investing step of the variableness a security, derived from the securities historical returns, and used to find the scope of possible hereafter returns. The higher the standard divergence, the greater the possibility for volatility.
3.12 Restriction of the research
1. The difference in the currencies between the Bankss and the states.
2. The difference in the fiscal criterions adopted in the issue the fiscal statements.
3. The difference in the fiscal dealing of both systems, which lead to difference in their fiscal policy.
4. There are immense difference in the entire assets, liabilities and equity for both systems, which reflect on the comparing analysis on both systems.