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
The Effect of Dividend Payout on Performance Evaluation: Evidence of Quoted Cement Companies in Nigeria (Published)
The issue of dividend payout is a very important matter in the current business environment and more especially on the performance evaluation of firms’. The dividend payment decisions of firms are the primary element of any corporate policy which is basically the benefit of shareholders in return for investing their money in the organization. The successful selection and use of appropriate dividend policy is one of the key elements of the firm’s performance evaluation. Hence, proper care and attention need to be given when such decision is taken. The purpose of this paper is to investigate the effect of dividend payout on performance evaluation of quoted cement companies in Nigeria over the past twelve (12) years period from 2003 to 2014. The researcher employed four (4) variables for the analyses such as: Dividend Payout Ratio (DPR); Return on Capital Employed (ROCE); Return on Assets (ROA) and Return on Equity (ROE). Performance evaluation as dependent variable is represented by Return on Capital Employed (ROCE); Return on Assets (ROA) and Return on Equity (ROE) while Dividend Payout stands as Dividend Payout Ratio (DPR) for independent variable. Secondary data were obtained from the financial statements (Statement of Comprehensive income and Statement of Financial Position) of the selected quoted cement companies in Nigeria on Nigerian Stock Exchange. The model specification for the analysis of data is ordinary least squares techniques applied as panel estimation while descriptive research method and simple linear regression for the analyses. The researchers’ empirical results suggest that dividend payout ratio (DPR) has positive relationship with all the dependent variables (ROCE, ROA and ROE) used for this study; that dividend payout ratio (DPR) has statistically significant with Return on Capital Employed (ROCE) and Return on Asset (ROA) while DPR has statistically insignificant with Return on Equity (ROE) of quoted cement companies in Nigeria and that R2 of all the dependent variables (Return on Capital Employed; Return on Assets and Return on Equity) used for this study were affected by other variables outside our model. It further revealed that dividend payout ratio (DPR) has statistically effect on Return on Capital Employed (ROCE) and Return on Assets (ROA) of quoted cement companies in Nigeria while DPR has no statistically effect on Return on Equity (ROE) of quoted cement companies in Nigeria. Based on this, we recommend that management should improve on their Return on Assets (ROA) and Return on Equity (ROE) as they are of great important in the valuation of performance evaluation of quoted cement companies in Nigeria; adopt optimal dividend policy that would better the lots of shareholders both in the short-run and long-run; devote adequate time in designing a dividend policy that will enhance firm’s performance and shareholder value and adopted good dividend payout policies in order to reduce agency cost and maximise the value of the company and attract more investors.
Keywords: Dividend Payout Ratio, Return on Assets, Return on Capital Employed, Return on Equity, Spss and Dividend Policy
Assessing the Impact of Liquidity and Profitability Ratios on Growth of Profits in Pharmaceutical Firms in Nigeri (Published)
This paper assesses the impact of liquidity and profitability ratios on growth of profits in Pharmaceutical firms in Nigeria. Eight ratios: acid test, current ratio, net working Capital. Return on assets, returns on capital employed, returns on equity, gross profit ratio and net profit ratio were regressed against the dependent variable growth of profit. Haussmann test was conducted to choose between Fixed Effect and Random Effects model. Results justified the use of Fixed Effect model. Test results indicate significant contributions of all the variables to profit growth of pharmaceutical companies in Nigeria implying that continued improvement in the variables can lead to increases in growth of profit by the Pharmaceutical firms.
Keywords: Growth of Profit, Liquidity, Profitability, Return on Assets, Return on Capital Employed, Return on Equity, Working capital.