INTELLECTUAL CAPITALS AND FINANCIAL PERFORMANCE INDICES OF DEPOSIT MONEY BANKS IN NIGERIA: A COMPARATIVE ASSESSMENT (Published)
The emergence of high technology, information, and innovation based environment in the world today has greatly altered the way and manner businesses are done globally. This new technology which of course utilizes high level of intellectual capital also determines the level of financial performance of business organizations. Some organizations which hitherto were rated very high in terms of their profitability and other financial performances are today being rated very low simply because of their non-adoption of this intellectually based technology. This study uses the Value Added Intellectual Coefficient (VAIC) model to compare both the intellectual capital indices as well as the financial performance variables of six highly rated banks in Nigeria with the aim of determining if the deviations in their financial performance indices could be explained by the deviations in the banks’ intellectual capital variables. The study adopted the ex-post facto research design. It was systematically conducted using longitudinal time series data generated from the Nigeria Stock Exchange and from annual reports and accounts of the selected banks in Nigeria spanning from year 2000 to 2012. The study adopted the Duncan Multiple Range Test (DMRT) of ANOVA across the six selected banks in Nigeria for the test of the hypotheses. The SPSS statistical software (version 17.0) was used for the data analysis. From the analyses, it was discovered that there were significant deviations in both the financial performance indicators and in the intellectual capital variables among the six banks studied. The results further showed that the banks are statistically different in both the intellectual capital indices and in the financial performance indicators. The study also established that the banks with high intellectual capital also recorded high financial performance and therefore recommends that all banks should embrace this new intellectually based technology in order to enhance their financial performances, returns to their different stakeholders as well as in their service delivery to their customers.
Keywords: Financial Performance, Intellectual Capital, Nigerian Banks, VAIC
A Critical Analysis of Financial Performance of Agricultural Development Bank (Adb, Ghana) (Published)
Until recently, many of the banks in developing countries were state owned or locally established with varied mandates to focus on different sectors of the economy. Some of these state banks are bedevilled with peculiar set of challenges making some of them inefficient and unprofitable and in some instances insolvent. Financial performance analysis is aimed at keeping the banks in checks by highlighting low and high performance areas with the understanding that it will bring about improvement in performance. The PELARI (Profitability, Efficiency, Liquidity, Asset Quality, Risk Measures and Investor analyses) model was developed for analysis by the researchers which is similar to the CAMELS’ rating. Financial ratio analysis is employed in the analysis. Troubled signals models such as the Altman z-score for non-manufacturing companies and risk index were also used to measure risk. The Altman z-score generated for 2011 and 2012 showed a figure of less than 1.1 which put the bank in the distress zone category. It was evident from the analysis that ADB’s focus on agricultural financing is diminishing since a sector analysis of loans and advances indicates that the agriculture sector lost its first position to the services sector which recorded 38% compared with agriculture 29% in 2012. The bank’s liquidity showed a downward trend and slipped further down in 2010 confirming the Ghana Banking Survey (2011) assessment that the bank is illiquid.
Keywords: Analysis, Bank, Development, Financial Performance, Liquidity
Evaluation of Financial Health of Mmtc of India: A Z Score Model (Published)
Financial position of any company can be easily evaluated through its profitability, liquidity, solvency and activity ratios. Ratio analysis is one of the most easiest and competent tool to evaluate the financial soundness of a company. In this paper the financial health of MMTC has been evaluated by using ratio analysis and the chances of bankruptcy in the near future is evaluated with the help of Z score developed by Prof. Edward I. Altman (1968). From the study of five years (2007-08 to 2011-12), it is deduced from the analysis that profit earning capacity and short term investing capacity of MMTC is quite good, but its financing position of assets is comparatively poor. However the Z score value indicates that it is in a strong position, and it has no chances of being bankrupt in the next two years.
Keywords: Bankruptcy, Financial Performance, Ratio Analysis, Z Score