Cash Management and Performance of Listed Manufacturing Companies in Nigeria (Published)
Investors in the manufacturing companies expect that managers entrusted with the responsibility of managing the operational activities of the companies are competent and optimally utilize the resources, including the cash management to ensure quality returns to the equity holders. Studies have shown that most managers of the manufacturing companies are desirous of reporting robust and plausible performance reports, rather than ensuring effective and optimal cash management to avoid disruption of production process. Consequently, achieving these expectations of investors and ensuring good return on assets and impressing earnings per share, remain a major problem facing the managers. This study therefore investigated the impact of cash management on performance of listed manufacturing companies in Nigeria. The study adopted ex-post facto research design, using population of 47 listed manufacturing companies on the Nigerian Stock Exchange as at 31st December 2016. Fifteen companies were selected using a combination of stratified and purposive sampling technique. Data were extracted from published financial statements of the sampled manufacturing companies, the validity and reliability of the data were premised on the scrutiny of the external auditors. Descriptive statistics and inferential (Regression) statistics were used for data analysis. The result revealed that cash management had significant positive effect on performance on the following: Cash management had a positive and significant effect on Return on Asset with Adj R2=0.09, F- Stat(3.146) = 10.32, P-value= 0.032: Cash management had positive and significant effect on Tobins Q with Adj R2=0.16, F-Statistics (3.146) = 20.38 and P-value = 0.00, cash management with control variables had positive and significant effect on Return on Assets with Adj R2= 0.0137, F-stat (3.146) = 16.86 and P-value = 0.00. The result further revealed that cash management with control variable had positive and significant effect on Tobins Q with Adj R2-0.1086, F-Stat(3.146) = 23.26 and P-value of 0.00. The study concluded that, cash management has effect on performance of listed manufacturing companies in Nigeria. The study recommended that shareholders, managers, policy makers, financial regulators and market participants should pay more attention to quality of earnings, returns on equity and assets of the companies. Managers should aggressively engage in optimal cash conversion cycle, currents assets and liquidity management and their optimal utilization in achieving their short and long term goals and safely satisfy shareholders objective.
Keywords: Cash management, Manufacturing Companies, Performance, Shareholders Wealth, value creation
Effect of Dividend Policy on Shareholders Wealth in Nigeria (1987 – 2016) (Published)
The study investigated the effect of dividend policy on shareholders wealth in Nigeria between 1987 and 2016. The study adopted market price per share as proxy for shareholders’ wealth and the dependent variable; while dividend per share, earnings per share and net assets per share were used as proxies for dividend policy and the explanatory variables. Secondary time series data was collected from the annual reports of sampled 25 quoted companies for the period. The study employed descriptive statistics, the Augmented Dickey Fuller unit root test, the Johansen co-integration procedure and ordinary least squares technique based on the E-views software to examine the link between the variables. The results revealed that earnings per share and net assets per share had positive influence on market price per share, but dividend per share had negative effect on market price per share. The study also found that the predictor variables had combined effect on market price of shares, but none of them had direct independent influence in determining the price of the stock in the market. The study therefore concludes that dividend pay-out policy does not have effect on shareholders’ wealth and shareholders do not react to dividend information. Based on this finding, the study recommends that firms operating within this environment should place down on the distribution of earnings as dividend but rather focus more on the investment of retained earnings for the expansion of the business to boost growth in earnings and net assets.
Keywords: Dividend Policy, Earnings, Market price, Net assets, Shareholders Wealth