scholarly journals Liquidity and The Profitability of Manufacturing Firms in Nigeria

2019 ◽  
Vol 5 (2) ◽  
pp. 68
Author(s):  
Gideon Tayo AKINLEYE ◽  
Joseph Segun OGUNLEYE
Keyword(s):  
Manufacturing Industry ◽  
Negative Impact ◽  
Random Effect ◽  
Secondary Data ◽  
Manufacturing Firms ◽  
Annual Reports ◽  
Coefficient Estimate ◽  
Current Ratio ◽  
Long Run ◽  
Financial Liquidity

This study examined the relationship between liquidity and profitability of manufacturing firms in Nigeria. The study specifically analyzed the effect of cash ratio, current ratio and quick ratio on profit after tax of the manufacturing firms in Nigeria. Secondary data were collected from annual reports of sampled firms over a period of ten years (2007-2016) and were analyzed using panel data estimators such as pooled OLS estimator, fixed effect estimator, random effect estimator, Hausman test, panel co-integration and pooled granger causality tests. The findings revealed that financial liquidity proxy in terms of quick ratio (QR) had a negative and insignificant impact on profit after tax with coefficient estimate of -0.094121 (p=0.2247 > 0.05). Financial liquidity measured in terms of Cash ratio (CR) exert positive and significant impact on profit after tax with coefficient estimate of 0.379774 (p=0.0121< 0.05). Result also showed that financial liquidity measured in terms of Current ratio (CNR) exert insignificant negative impact on profit after tax with coefficient estimate of -0.024989 (p=0.1163 > 0.05). Meanwhile the study revealed that quick ratio (QR), cash ratio (CR) and current ratio (CNR) has 0.581533 (58.1%) variation in profit after tax (PAT). Result further revealed that that there is no long-run relationship between liquidity and profitability of manufacturing firms in Nigeria. The study concluded that financial liquidity has helped to improve financial performance selected manufacturing firms in Nigeria. Also, that cash ratio has positive and significant effect on the profitability of manufacturing Firms in Nigeria. Thus, firms in the manufacturing industry should objectively try to reduce their bill receivable, so as to guide against waiting longer to collect from customers, for the purpose of increasing their profitability.

scholarly journals Adoption of Competitor Focused Accounting Methods in Selected Manufacturing Companies in Nigeria

2014 ◽  
Vol 2 (3) ◽  
pp. 128-140
Author(s):  
Chiekezie Njideka Rita ◽  
Egbunike Patrick Amaechi ◽  
Odum Austin Nwekemezie
Keyword(s):  
Financial Performance ◽  
Manufacturing Industry ◽  
Stock Exchange ◽  
Secondary Data ◽  
Manufacturing Firms ◽  
Manufacturing Companies ◽  
Competitive Edge ◽  
Survey Techniques ◽  
Strategic Management Accounting ◽  
The Mean

This study-examined the extent of adoption of competitor focused accounting (CFA) in selected manufacturing firms listed on Nigerian Stock Exchange with a view to establishing whether there are differences in financial performance of the firms. The study is descriptive in nature and uses survey techniques. Accordingly, two-hundred and twenty four (224) key respondents in the Nigerian manufacturing industry were surveyed. This is complimented with secondary data collected from annual accounts and reports of fifty six (56) manufacturing companies listed in the Nigerian stock exchange. In addition to descriptive statistics, analysis of variance (F- Ratio) and scheffes’ (fs) test were used in analyzing collected data. The result of the study revealed that 14 companies representing (25%) were non-adopters of competitor focused accounting methods, 36 (64.3%) were partial adopters while 6 (10.7%) were full adopters. In addition, the mean financial performance of full adopters of CFA methods was 25.1 greater than that of partial adopters and also 45.71 greater than non-adopters. This shows a large difference. On the other hand, partial adopters’ mean financial performance was 20.61 greater than that of non adopters of CFA methods. However, this study proves that the practice of CFA in Nigerian manufacturing companies is still below average and the necessity to improve this situation is the current challenge. Manufacturing firms in Nigeria should give priority to strategic management accounting and it sub-divisions especially CFA in other to enhance its competitive edge over competitors.

INFLUENCE OF LIQUIDITY ON FIRM PROFITABILITY, A CASE OF INVESTMENT FIRMS LISTED IN NAIROBI SECURITIES EXCHANGE (NSE), KENYA

2021 ◽  
pp. 148-161
Author(s):  
Joshua Mogaka
Keyword(s):  
Significant Positive Correlation ◽  
Secondary Data ◽  
Sampling Technique ◽  
Annual Reports ◽  
Current Ratio ◽  
Positive Correlation ◽  
Firm Profitability ◽  
Margin Of Safety ◽  
Investment Firm ◽  
Acid Test

ABSTRACT Liquidity and firm profitability are the critical indicators of the performance of firms in any given sector. Liquidity ratios such as current ratio, cash ratio and quick acid test ratio are used to measure the ability of a firm and meet its short-term maturing obligations. Margin of safety is determined by the level of the ratio. Profitability ratio are concerned with the relative profit and efficiency of utilization of service resources of a business. This study was guided by three specific objectives; the correlation between the current ratio and profitability of investment firms listed in (NSE),Kenya, the correlation between the quick acid test ratio and profitability of investment firms listed in (NSE),Kenya and the correlation between the cash ratio on profitability of investment firm listed in NSE Kenya .Return on Assets (ROA) and Return on Investment (ROI) were used as measures of the performance of listed investment firms in (NSE),Kenya. The study adopted a descriptive research design. The population of the study consisted all the investment firms listed in (NSE).The sampling technique was non-probability sampling technique for the all the investment firms listed in (NSE).The secondary data in the form of the annual reports and Accounts for the years 2014-2018 were be used. Simple correlation analysis was used to test the hypothesis at 10% level of significance. Analysis of data was tabulated and presented using frequency tables' percentages and explanations. A multi linear regression model was used to establish the relationship between independent and Dependent variables. The overall findings of the study indicated that: There is no significant positive correlation .between cash ratio and profitability; there was no definite significant correlation between acid-test ratio and profitability; there was a significant positive correlation between current ratio and profitability. The researcher recommends that corporate entities should not pursue extreme liquidity policies at the expense of their profitability, that is, they should strike a balance between Liquidity and profitability. Key Words: Liquidity, Profitability, Performance, Margin of Safety, ROA, ROI

The analysis of influencing factors on the going concern audit opinion – a study in manufacturing firms in Indonesia

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Thomas Averio
Keyword(s):  
Audit Quality ◽  
Stock Exchange ◽  
Secondary Data ◽  
Sampling Technique ◽  
Manufacturing Firms ◽  
Annual Reports ◽  
Content Type ◽  
Audit Opinion ◽  
Going Concern ◽  
Going Concern Opinion

PurposeIt is argued that the going concern opinion is issued if auditors have a doubt about financial condition of a company. Provision of the going concern audit opinion may worsen the company in terms of gaining public trust and may even indicate bankruptcy. This study aims to determine the factors that affect the auditor's going concern opinion.Design/methodology/approachThis research used secondary data obtained from annual reports and independent audit reports published by the Indonesia Stock Exchange. The population of this research included manufacturing firms registered in the Indonesia Stock Exchange from 2015 to 2019. The sample after the purposive sampling technique being applied consisted of 33 companies. The data were analyzed using logistic regression performed in the statistical analysis software, SPSS 24.0.FindingsThe results indicated that leverage positively affected the going concern audit opinion, then the audit quality, profitability and liquidity negatively affected the going concern audit opinion, whereas firm size and audit lag did not affect the going concern audit opinion.Originality/valueThis study is in contrast to several existing studies on the determinants of the auditor's going concern opinion and provides knowledge on developing more factors affecting the auditor's going concern opinion.

scholarly journals Pengaruh Likuiditas, Leverage, Profitabilitas, dan Ukuran Perusahaan terhadap Financial Distress di Sektor Trade, Service, and Invesment

2021 ◽  
Vol 9 (3) ◽  
pp. 1227-1240
Author(s):  
Hasivatus Sariroh
Keyword(s):  
Firm Size ◽  
Financial Distress ◽  
Ordinal Data ◽  
Stock Exchange ◽  
Secondary Data ◽  
Sampling Technique ◽  
Annual Reports ◽  
Return On Assets ◽  
Current Ratio ◽  
Independent Variables

This study is a quantitative study that aims to determine the effect of the current ratio, debt to asset ratio, return on assets, and firm size on financial distress. Logistic regression method was used to test all relationships between independent variables and dependent variables with nominal/ordinal data scales. The dependent variable in this study is financial distress. The independent variables in this study are liquidity, leverage, profitability and firm size. This study uses secondary data from annual reports of trading, service, and investment companies listed on the Indonesia Stock Exchange from 2016 to 2018. The population used is companies in the trade, services, and investment sectors listed on the Indonesia Stock Exchange (IDX). from 2016 to 2018 with a total of 162 companies selected using purposive sampling technique. The results of hypothesis testing indicate that the current ratio, debt to asset ratio, return on assets, and firm size have no effect on the company's financial distress. From research conducted by researchers, for management to be used as a basis to take corrective actions if there are indications that the company experiencing financial distress. For investors, to be used as a basis in making the right decision to invest in a company.

scholarly journals Credit management and performance of deposit money banks in Nigeria

2019 ◽  
Keyword(s):  
Deposit Insurance ◽  
Secondary Data ◽  
Data Bank ◽  
Positive Influence ◽  
Annual Reports ◽  
Credit Management ◽  
Long Run ◽  
Lending Rate ◽  
Negative Effect ◽  
Short Run

Granting of loans and advances remains one of the ways deposit money banks generate income to boost their performance. However, as important as this appears, it has led to incidence of rising non-performing loans in the credit portfolio of deposit money banks. Against this backdrop, this study investigated the effect of credit management on the performance of deposit money banks in Nigeria. The study employed secondary data sourced from Central Bank of Nigeria (CBN) statistical bulletin and annual reports of Nigeria Deposit Insurance Corporation (NDIC) from 1986 to2016. From the data, bank performance (dependent variable) was measured by return on assets (ROA) while credit management (independent variable) was proxied by ratio of non-performing loans to total loans (NPFL), bank deposit (BDEP) and lending rate (LENDR). The study employed autoregressive distributed lag (ARDL) technique to examine the effect of the independent variables on the dependent variable. The findings revealed that ratio of non-performing loans to total loans with coefficient of -0.362733 had negative effect in the short run but produced positive effect on performance of deposit money banks in the long run as indicated by the coefficient of 1.583503. On the other hand, bank deposit exhibited positive influence while lending rate had negative effect on the dependent variable both in the short run and long run. Given the overall significance of the model, it was concluded that credit management had significant effect on performance of deposit money banks in Nigeria. Thus, it was recommended that bank management should endeavor to reduce incidence of non-performing loans by conducting thorough assessment of any credit application prior to approval, especially customer’s character and previous credit record. Also, banks should closely monitor customer’s investment activities to ensure that granted loans are not diverted to unprofitable ventures which the loans are not initially meant for.

scholarly journals Economic analysis of growth finance and liquid liabilities in Nigeria

2020 ◽  
Vol 17 (3) ◽  
pp. 387-396 ◽  
Author(s):  
Bello Hassan ◽  
Evans Osabuohien ◽  
Folorunso Ayadi ◽  
Jeremiah Ejemeyovwi ◽  
Victoria Okafor
Keyword(s):  
Secondary Data ◽  
Annual Reports ◽  
Market Development ◽  
Stock Market Development ◽  
Long Run ◽  
Development Policies ◽  
Key Sectors ◽  
Domestic Savings ◽  
The Relationship ◽  
Insight Into

Liquid liabilities are required to develop key sectors that drive the Nigerian economy by ensuring that loans are available for investment purposes. However, controversies concerning the effectiveness of growth finance in fostering liquid liabilities in Nigeria exist. Thus, this study examines the relationship between growth finance and liquid liabilities in Nigeria, with insight into Nigeria’s real sector. In achieving its objective, the study utilizes secondary data from the annual reports of the Central Bank of Nigeria (1980–2018). The study finds that gross domestic savings significantly drive liquid liabilities in the long run compared to other growth finance indicators, which include stock market development and remittance inflows. Therefore, the study recommends that to improve liquid liability, gross domestic savings, among other growth finance indicators, should be harnessed as a tool to efficiently influence liquid liabilities in the Nigerian economy. The study concludes that attention should be paid to development policies that drive all stakeholders’ gross domestic savings.

scholarly journals Pengaruh Current Ratio, Inventory Turnover dan Debt to Equity terhadap Return on Asset

2021 ◽  
Vol 4 (2) ◽  
pp. 974-984
Author(s):  
Sindik Widati ◽  
Tania Dwi Hartini
Keyword(s):  
Stock Exchange ◽  
Linear Regression Analysis ◽  
Sample Selection ◽  
Secondary Data ◽  
Sampling Technique ◽  
Multiple Linear Regression Analysis ◽  
Annual Reports ◽  
Current Ratio ◽  
Inventory Turnover ◽  
Asset Inventory

This study aims to determine the effect of Current Ratio, Inventory Turnover and Debt to Equity on Return on Asset Practice in Property and Real Estate companies listed on the Indonesia Stock Exchange period 2017-2019. The research method used in this study is a quantitative method. The data used are secondary data in the form of financial statements and annual reports. The sampling technique in this study was purposive sampling method in which sample selection was based on certain criteria. The study population used was 64, the research sample of 24 companies. The analysis technique in this study uses multiple linear regression analysis. The analysis shows that Current Ratio do not affect the Return on Asset, Inventory Turnover do not affect the Return on Asset and Debt to Equity do not affect the Return on Asset.

scholarly journals The Effect Analysis of Liquidity, Solvency on Profitability and Its Impact to the Company Value at PT KS, Tbk

2020 ◽  
Vol 3 (4) ◽  
pp. 3845-3860
Author(s):  
Masno Marjohan
Keyword(s):  
Firm Value ◽  
Manufacturing Industry ◽  
Stock Exchange ◽  
Annual Reports ◽  
Coefficient Of Determination ◽  
Return On Assets ◽  
Current Ratio ◽  
Financial Reports ◽  
Effect Analysis ◽  
Company Value

he purpose of this study is to analyze the company's ability to pay short-term debt and long-term debt, and this study is also to determine the effect on profitability and its impact on the firm value of the manufacturing industry listed on the Indonesia Stock Exchange (Tbk). The data is obtained from the company's annual reports from 2009 to 2018. The research method used by the author is quantitative descriptive method, by analyzing financial reports with quantitative data obtained from the company's official website and the Indonesia Stock Exchange. Management of statistical data usingEviews.The result of the research is to get the influence between variable X1, variable Y and X2 with variable Y, and simultaneously and variable Y to variable Z (Company value) by using multiple linear analysis obtained a regression equation. Calculation of the coefficient of determination or R Square, This shows that Liquidity (Current Ratio) and Solvency (Debt to Asset Ratio) have an influence on Profotability (Return on Assets) while the rest is influenced by other variables. Partially the liquidity variable (Current Ratio) has a significant influence on Profitability (Return on Assets), while partially there is an insignificant effect of Debt to Asset Ratio on Profitability (Return on Assets).

scholarly journals INFLUENCE OF RISK ASSETS IMPAIRMENT ON PERFORMANCE OF NIGERIAN LISTED DEPOSIT MONEY BANKS

2020 ◽  
Vol 5 (3) ◽  
pp. 41-63
Author(s):  
Adewale Joel Adebisi ◽  
Adeyemi Wasiu Alabi ◽  
Kolawole Fatimehin
Keyword(s):  
Gross Domestic Product ◽  
Negative Impact ◽  
Positive Impact ◽  
Random Effect ◽  
Negative Relationship ◽  
Secondary Data ◽  
Negative Influence ◽  
Domestic Product ◽  
Return On Assets ◽  
Operating Profit

Profitability is critical to the survival of Nigerian deposit money banks which is consistently been eroded by the impaired risk assets. Hence, this study was conducted to examine influence of risk assets impairment on performance of Nigerian deposit money banks. The specific objectives of the study were to; (i) determine the effect of impairment loss on operating profit; (ii) analyze effect non-performing loans ratio affect return on assets of Nigerian deposit money banks. Secondary data were collected and analysed using fixed and random effect regression analysis methods from a sample of 14 listed Nigerian deposit money banks. The study revealed that impairment loss, have significant negative relationship with operating profit (β=2.294, p‹ 0.01) and non-performing loan ratio have significant positive relationship with return on assets (β=0.067, p‹ 0.1). However, other variables such as inflation, liquidity and gross domestic product per capital also have effect on banks performance. The study concluded that risk assets impairment has significant negative influence on performance and that inflation, liquidity and gross domestic product have negative impact on profitability, while bank size has positive impact on profitability. The study recommended that; bank directors should put effective risk assets impairment test in place to boost reported profitability; the bank management should ensure effective management of liquidity ratio to boost return on equity; government policymakers should ensure that banks are mandated to disclose their risk assets impairment and expand their size by extending banking services to the unbanked areas.

scholarly journals BOARD OF DIRECTORS QUALIFICATION AND COMPOSITION: STUDY OF ITS IMPACT ON SERVICE SECTOR OF INDIA

2021 ◽  
Vol 9 (1) ◽  
pp. 1213-1219
Author(s):  
Rahul Singhal , Vikhyat Singhal, Ritesh Kumar Singhal, Ajay Singh
Keyword(s):  
Board Of Directors ◽  
Service Sector ◽  
Negative Impact ◽  
Stock Exchange ◽  
Linear Regression Analysis ◽  
Secondary Data ◽  
Target Population ◽  
Annual Reports ◽  
Return On Equity ◽  
Return On Capital

The purpose of this study was to determine the effects of education and composition of Board of Directors on the performance of firms listed at the Bombay Stock Exchange (BSE). The target population of this explanatory research study comprises of top performers of service sector firms listed at the Bombay Stock Exchange. The secondary data from the financial statements and annual reports of the listed companies covering the year 2015-19 was considered for the study. The correlation matrix and linear regression analysis technique was used to determine the effect of independent variables i.e. size of board, proportion of board with post-graduation qualification and proportion of independent directors in the board on the dependent variable i.e. return on equity and return on capital employed. The study findings indicate size of BODs and independence of BODs has insignificant and negative impact on the firm performance. On the other hand percentage of directors having post-graduation degree has positive and notable impact on the performance of the firm.

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