The Effect of Profitability & Market Value on Market Capitalization of the Listed Insurance Companies of Jordan (2010-2023) (Published)
The main objective of this study is to find the effect of profitability & market value on market capitalization of the listed Insurance Companies of Jordan (2010-2023). The research data were collected from secondary sources; the descriptive analytical method was used. The financial statements of the sample banks were analyzed to extract the main ratios used for the study. This study employed a quantitative research design with an explanatory approach. The sample included all publicly listed insurance companies. The descriptive analytical method and correlation analysis were followed to test the effect of independent variables (profitability & market value) on the dependent variables (market capitalization). The results indicated that, market capitalization is most strongly influenced by the Market-to-Book (M/B) ratio, with a significant positive impact. ROA has a weak but positive impact on market capitalization. ROE and P/E ratio do not significantly affect market capitalization in this analysis.
Keywords: Market Capitalization, Profitability, Return on Assets, Return on Equity
Corporate Governance Practices and Performance of Deposit Money Banks in Nigeria (Published)
Performance of deposit money banks in Nigeria. The specific objective of the study was to critically appraise the relationship between size of board of directors, composition of board members, frequency of board meetings and return on assets of deposit money banks in Nigeria. The data were sourced through secondary sources from annual reports and accounts of sampled deposit money banks in Nigeria. The stated Null Hypotheses were tested through data analysis by using the correlation analysis as analytical tool. The research findings reveal that board size has a positive and strong relationship with return on assets while board composition has a positive but moderately strong association with return on assets. Furthermore, frequency of board meetings has a negative and very weak relationship with return on assets of deposit money banks in Nigeria. The implication of the findings is that increased board size could result in the improvement of financial performance of deposit money banks. The research found that such increase in number of members of the board will generate the desired outcome if it centers on independent nonexecutive directors with wealth of corporate governance experience, sound and profitable contacts, good and relevant education. The negative relationship with frequency of board meetings implies that banks should begin to trim down on number of board meetings as research has found that frequent meetings signal a crisis or distress situation with perceptions of going concern issues and bank failure. The study recommends that new independent non-executive professionals with critical governance and management attributes could be introduced into the board to improve the quality of decisions, earnings and general performance. Frequency of Board Meetings should be reduced to save cost and time while virtual meetings should be called more often than physical meetings as distance is no longer a barrier.
Keywords: Banks’, Board Composition, Board Meetings, Board size, Financial Performance, Nigeria, Return on Assets
Effect of Capital Structure on Financial Performance of Quoted Manufacturing Companies in Nigeria (Published)
Capital structure is a mixture of the financing options a company uses to finance its investments. However, deciding on an optimal capital mix has been a huge task for most manufacturing companies. This paper therefore examined the effect of capital structure on financial performance of quoted manufacturing companies in Nigeria. The study covered ten companies for a period of seven years from 2013 to 2019. Panel data analysis was used to test the hypothesis. The independent variables used are total debt to total asset ratio (TDTAR), long-term debt to total assets (LDTAR), short-term debt to total assets (SDTAR) and total debt to total equity (TDTER) while the dependent variables are return on asset (ROA) and return on equity (ROE). The results of the study showed that SDTAR and LDTAR have positive but insignificant effects on ROA, and TDTAR has a negative significant effect on ROA and ROE respectively. Also, TDTAR and TDTER have negative insignificant effect on ROE. The study concluded that SDTAR, LDTAR, TDTER have no significant effect on ROA and ROE but TDTAR have effect on ROA. This study therefore recommended that firms should be cautious in accumulating debt that could eventually have adverse effects on their value and financial performance.
Keywords: Capital Structure, Return on Assets, Return on Equity, Total Assets, total debts
Impact of Social Costs on Financial Performance of Listed Firms in Nigeria (Published)
To succeed in the business world, organisations need to provide reliable and credible efforts to their stakeholders, to ensure that their business activities would not harm the safety of stakeholders in the area where they are operating. The operation of business conducts in recent time, changes drastically due to the emergence of an increasing number of external factors which impose on corporate performance. Hence, this study examined the impact of social costs on the financial performance of listed firms in Nigeria. The study adopted ex-post facto research designs. Secondary data sourced from the published annual reports of 52 firms, purposively selected for a period of 11 years (2008 to 2018), giving 572 firm-year observations. Data analysed by panel data regression of pooled OLS, random effects, fixed effects models and the Feasible General Least Squares (FGLS) regression for the objectives. Findings revealed that Social Costs (SOCO) had significant and positive effect on ROA (R2 = 0.42, β = 0.202, t(570) = 4.869, p < 0.05). In addition there is evidence that SOCO, firm age, firm size and leverage jointly exerted significant effect on ROA (Adj.R2 = 0.608, F(6, 565) = 5904.01, p < 0.05). The study concluded that social costs have a significant impact on the financial performance of listed firms in Nigeria. It recommended that the practice of elimination of social costs should be intensified by corporate firms to improve on their business reputation.
Keywords: Leverage, Return on Assets, business reputation, firm age, firm size, social costs
Dividend Policy and Profitability of Agro Allied Companies in Nigeria (Published)
This study assesses the effect of dividend policy on the profitability of listed agro-allied companies in Nigeria. The population of the study consists of five (5) listed agro-allied companies on the Nigerian Stock Exchange as at 31/12/2018. All the listed agro-allied firms were used due to the small sample size. Secondary data were collected from the sampled firms through their published audited financial statements for 14 years ranging from 2005-2018. The ex-post facto research design was adopted with regression and descriptive analysis to determine the effect of explanatory variables. The results show that the return on assets has a positive and significant effect on dividend policy of listed agro-allied companies in Nigeria, while return on equity has a negative and significant effect on dividend policy of listed agro-allied companies in Nigeria but earnings per share have a negative and insignificant effect on dividend policy of listed agro-allied companies in Nigeria. Based on the findings, the study concludes that the dividend policy has the probability of influencing the profitability of listed agro-allied companies in Nigeria. The study, therefore, recommends that firms should adopt policy and strategy on efficient use of company assets that would enable them to generate profits to meet up with dividends payment regularly to attract more investors. This is because investors assume that a firm which pays dividend regularly is evidence that a company is healthy financially.
Keywords: Dividend Payout Ratio, Return on Assets, Return on Equity, and dividend retention ratio., earning per share
Effect of Managerial Efficiency on Corporate Financial Performance of Quoted Nigerian Firms (Published)
Managerial skills, performance and firm characteristics are vital in organizations as such, influence the financial performance of firms. Empirical studies have shown that management of firms have difficulties balancing short and long term results leading to corporate insolvency and loss of confidence by investors. This study examined managerial efficiency and corporate financial performance of quoted Nigerian firms. Ex-post facto design was adopted for the study. The population covered 169 quoted firms as at 31st December 2017. Data were analyzed using descriptive and inferential statistics. Findings revealed that ME has moderate explanatory power on variations in ROA (F(5, 895)=1065.67, Adj. R2=.1913, p˂0.05) but a weaker explanatory power on changes in Total Q (F(5, 895)=37.61, Adj. R2=.1085, p˂0.05). The study recommended that management of firms should strengthen their cost management strategies and apply cost-benefit analysis in their decisions for stakeholders’ economic decisions.
Keywords: Cost of production, Debt equity ratio, Life cycle, Return on Assets, Total quality
Empirical Study on the Impact of Corporate Governance Practices on Performance: Evidence from SMES in an Emerging Economy (Published)
The study examined the impact of corporate governance practices on the performance of SMEs in Ghana. Both descriptive and correlational research design were employed for the study. Convenience sampling technique was used to select one hundred (100) SMEs from two regions in Ghana. The study utilised the annual reports of the SMEs from 2012 to 2016 financial years. Net profit margin (NPM) and return on assets (ROA) were used as proxies for performance and Ordinary Least Square (OLS) regression model was used to estimate the level of impact of corporate governance on the performance of SMEs in Ghana. The study found empirical evidence to support the view that the board size (BS) has a negative impact on NPM, though insignificant. In addition, the evidence obtained indicate that board gender (BG) and management ownership (MO), all have positive impact on NPM. The evidence also showed that role difference for CEO and board chairman (DR) has a negative and positive impact on both ROA and ROE. Similarly, the results showed that board size (BS) has an insignificant negative impact on ROA. Additionally, it was ascertained that board gender (BG) and management ownership (MO) have positive impact on ROA, though the level of impact of board gender (BG) and management ownership (MO) are statistically insignificant. The results further provide evidence that the control variables: firm age (Fage) and industry of the firms (FInd) have a significant positive impact on both NPM and ROA. Generally, the evidence obtained show that corporate governance has positive but insignificant impact on performance of SMEs.
Keywords: Corporate Governance, Ghana Stock Exchange, Manufacturing Firms, Return on Assets, Return on Equity
Effect of Intellectual Capital on Financial Performance of Banks in Nigeria (Published)
This paper appraised the effect of intellectual capital on financial performance of firms in Nigeria using the banking industry. The research used the Value Added Intellectual Coefficient (VAIC) to ascertain the extent that intellectual capital indices affect financial performance of three Nigeria. Data were collected from the published annual financial statements of the three banks and analyzed using regression tool. The study indicates that IC has a positive and significant effect on banks’ financial performances of the banks but some are not significant. The results further showed that the banks are statistically different in both the intellectual capital and its financial performance indicators. It also shows that the banks with high IC also show high financial performance. The study recommends banks in Nigeria invest vigorously in development of their human capital as a key driver of firm’s performance. They should also provide the infrastructures needed for to achieve a virile human capital in the system.
Keywords: Financial Performance, Gross Earnings., Intellectual Capital, Return on Assets, Return on Equity
Impact of Working Capital Management on Firm’s Profitability: A Case from Food Sector of Pakistan (Published)
The main aim of this study is to investigate the relationship between working capital management (WCM) and firm’s profitability in the Food sector of Pakistan. WCM plays an important role in firm’s financial management decisions. An optimal (WCM) is expected to contribute positively to the creation of firm’s value and enhancement of its profitability. Return on assets (ROA) is used as dependent variable while different independent variables are also used. Working capital, current asset to total asset ratios’ debt to equity ratio, current ratio and capital size of the firm are used independent variables. These variables are also used to investigate their effect on profitability (net income). A sample size of 5 major food companies in Pakistan has been selected from balance sheet analysis of state bank of Pakistan for a period of five years, from 2012 to 2016. The relationship between (WCM) efficiency and profitability is examined using correlation, regression analyses. The results show a strong positive significant relationship between (WCM) and firm’s profitability in Pakistan’s Food sector.
Keywords: Financial Performance, Food sector, Return on Assets, Working capital.
The Relationship between Financial Ratio Analysis and Corporate Profitability: A Study of Selected Quoted Oil and Gas Companies in Nigeria (Published)
The title of this work is the relationship between financial ratio analysis and corporate profitability: a study of selected quoted oil and gas companies in Nigeria. The issue of deciding on an effective financial ratio analysis for corporate profitability has been a major problem of most oil and gas companies in Nigeria. The successful selection and use of appropriate planning tool is one of the key elements of a firm’s financial strategy. Therefore, proper care and attention need to be given while such decision is taken. Thus, financial ratio analysis relationship has been discovered as having immense potentials to help organization in improving their revenue generation ability as well as minimization of costs. The purpose of this study is to examine the relationship between financial ratio analysis and corporate profitability of Nigeria oil and gas industry over a period of five (5) years (2008-2012). This work employed five (5) financial ratio analysis such as total assets turnover ratio (TATR), debt equity ratio (DER), debtor’s turnover ratio (DTR), interest coverage (IC) and creditors’ turnover ratio (CTR) in determining their relationship and effect on corporate profitability (Return on assets) of oil and gas companies in Nigeria. The ex-post facts research design was used in this study. Corporate profitability as a dependent variable is represented by return on assets (ROA) while financial ratio analysis stand as TATR, DTR, DER, IC and CTR for independent variables. The data were obtained from the financial account and annual reports (both statement of comprehensive income and statement of financial position) of the selected quoted oil and gas companies on the Nigeria stock exchange (NSE). Descriptive statistics, Pearson correlation and regressions were employed to find out the relationship between the variables and their effect on corporate profitability. The results of the analysis shows that total assets turnover ratio (TATR), debtor’s turnover ratio (DTR) and interest coverage (IC) have positive relationship and statistically significant with corporate profitability while debt equity ratio (DER) and creditor’s turnover ratio (CTR) have negative relationship and statistically insignificant with corporate profitability in the Nigeria oil and gas industry. The analysis also revealed that the debtor’s turnover ratio (DTR) has positive relationship and statistically significant with total assets turnover ratio (TATR) and IC have effect on corporate profitability while DTR, DER and CTR have no effect on corporate profitability in quoted oil and gas companies in Nigeria. The results further suggested that only 46.9% of the variations on the dependent variable were caused by the independent variables in our model suggesting that 53.1% of the variations in corporate profitability were caused by other factors outside our model. Based on the other findings, the researcher recommends that the management should not make use of debt finance in the performance of their growth. The study also recommend that creditor’s and purchases must be equal in order to take the advantage of credit facility and any discount associated with prompt payment for products to increase the corporate profitability. Management should utilize its assets efficiently in order to generate more income for the company.
Keywords: Creditor’s Turnover Ratio, Debtor’s Turnover Ratio, Financial Ratio Analysis, Growth And Financial Statement, Interest Coverage, Pearson Correlation, Return on Assets