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Author: Babatunde Afolabi
Publisher:
ISBN:
Category :
Languages : en
Pages : 10
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Book Description
The capital structure of a firm is very important to the firm's successful operation. The objective of the study was to analyze the effects of Capital Structure on Corporate Performance of selected firms on the Nigerian Stock Exchange in Nigeria from 2011 to 2017. The study employed data from five multinational companies, using Micro Panel data as the estimated technique. Both the Random Effect Model and the Fixed Effect Model were estimated, and the Hausman effect was carried out to determine the appropriate model. The result shows that the effect of liquidity of the firms is negatively related to return on Asset (ROA). Hence, keeping funds in non-interest yielding form does not increase the ROA of the firms. Similarly, the short term debt financing (CLA) is negatively related to ROA. However, there is a positive relationship between long term debt financing and ROA. It noted that short term debt financing requires the payment of the debt in a short term, and this may not be convenient for the firms, and impair their performance. However, repaying long term debt may be convenient, and this may have a positive effect on the performance of the firms. Management of the quoted firms in Nigeria is strongly advised to increase the use of equity capital in financing to improve the earnings of their firms.
Author: Babatunde Afolabi
Publisher:
ISBN:
Category :
Languages : en
Pages : 10
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Book Description
The capital structure of a firm is very important to the firm's successful operation. The objective of the study was to analyze the effects of Capital Structure on Corporate Performance of selected firms on the Nigerian Stock Exchange in Nigeria from 2011 to 2017. The study employed data from five multinational companies, using Micro Panel data as the estimated technique. Both the Random Effect Model and the Fixed Effect Model were estimated, and the Hausman effect was carried out to determine the appropriate model. The result shows that the effect of liquidity of the firms is negatively related to return on Asset (ROA). Hence, keeping funds in non-interest yielding form does not increase the ROA of the firms. Similarly, the short term debt financing (CLA) is negatively related to ROA. However, there is a positive relationship between long term debt financing and ROA. It noted that short term debt financing requires the payment of the debt in a short term, and this may not be convenient for the firms, and impair their performance. However, repaying long term debt may be convenient, and this may have a positive effect on the performance of the firms. Management of the quoted firms in Nigeria is strongly advised to increase the use of equity capital in financing to improve the earnings of their firms.
Author: Promise Nkak
Publisher:
ISBN:
Category :
Languages : en
Pages : 7
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Book Description
How really is performance influenced by capital structure? There have being different views by different scholars on this topic. Therefore this study examined the relationship between capital structure and firm's performance of quoted industrial goods on Nigeria Stock Exchange (NSE). Five firms were selected for the study with secondary data covering for six years (2014-2019). We employed the multiple regression model in testing our hypotheses, return on equity (ROE) serve as the dependent variable for measuring performance while the independent variables are measured by three variables which Non-current debt to total assets (NCD), current debts to total assets (CD) and total debts to equity (TDE). Our findings revealed that two of our independent variables (NCD and TDE) have a statistical significant relationship with ROE however TDE have a negative relationship with ROE, while the other independent variable CD has no statistical significant on performance. We therefore recommend that in considering the capital mix/structure of the firms long term financing should be consider first, while CD should be consider last and also proper matching should be carried out between equity and debt.
Author: Mohammed Kakanda
Publisher:
ISBN:
Category :
Languages : en
Pages : 9
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Book Description
Managers of corporate entities are mostly in confrontation with the problem of; what combination of capital structure (equity and debt) will maximize returns and value of their firms? The study, therefore, aims at assessing the effect of capital structure on the financial performance of listed Consumer goods companies in Nigerian. All consumer goods companies quoted on the Nigerian Stock Exchange are considered the population for this study while seven (7) out of these firms whose accounting year-ends 31 December are considered as the sample. Secondary data was utilized from the annual financial reports of the sampled firms from the year 2008-2013, which was obtained from African Financial website and official website of Nigerian Stock Exchange. The study used ex-post facto research design to examine the relationship between independent and dependent variables while controlling for other variables. Descriptive statistics, correlation, and hierarchical multiple regression analyzes were carried out to test the hypotheses developed in the study. The study found that there is a positive and significant relationship between firm's capital structure and corporate financial performance. The study specifically found that short-term debt (STD) has no significance positive effect on return on equity (ROE) while Long-term debt (LTD) has positive relation and significant effect on ROE. The study recommends that firms should consider the mixture of equity and debt since they are major determinants of corporate performance. Authorities concerned should create an enabling business environment for companies (especially those with low capital) so as to have access to long-term debts to finance their operations and improve performance in the shortrun, instead of using high short-term debts to cushions for financing and profitability problems.
Author: Felicia Uchehara
Publisher:
ISBN:
Category :
Languages : en
Pages : 12
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Book Description
This paper investigates the influence of Financing Mix (Capital Structure) on Corporate Performance in Nigeria using a disaggregated approach. To carry out this research we employed a disaggregated approach using sample of twenty-seven firms listed on the Nigerian Stock Exchange during the seventeen-year period, 1996- 2013 and a model with the necessary policy variables was constructed. Panel data for the selected firms are generated and analyzed using Ordinary Least Squares (OLS) as a method of estimation. Our result reveals that a firm's capital structure represented by Debt Ratio, DR has a significantly negative impact on the Return on Asset (ROA) and Return on Equity (ROE) (firm's performance proxies). Also the relationship between ROA and firm's asset tangibility is negative and significant at 1% level being wrongly signed, against a priori expectations. This shows that firms with high ratio of tangibility have a lower financial performance ratio. The results also show that the size and growth of firm are correctly signed consistent with Myers and Majluf (1984). The study by these findings indicate consistency with previous empirical studies and provide evidence in support of Agency cost theory. The author recommended among others that firms should identify other relevant factors that influence corporate performance other than debt. Such factors as Corporate governance, quality management, Size of the firm, Tangibility, growth etc. It is also necessary that firms understand their conditions, analyze their debt capacities, look at the need to maintain comparability with firms in the same industry before making the final decision regarding their capital structure; and especially when presented with attractive new growth opportunities.
Author: John Joseph
Publisher: GRIN Verlag
ISBN: 3668733074
Category : Business & Economics
Languages : en
Pages : 32
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Book Description
Seminar paper from the year 2018 in the subject Business economics - Business Management, Corporate Governance, , language: English, abstract: The International Financial Reporting Standards (IFRS) is a high quality and principle based reporting standards that remove many accounting alternatives. It is therefore, consequently expected to limit the management’s discretion and lessen practices on earnings management. Quite the opposite, some researchers argue that the flexibility in IFRS and its fair value pre-eminence might afford greater opportunities for firms to manage earnings. It is this inaptness which incited and aggravated the conduct of this study. This study applies a desktop review to investigate the worldwide existing empirical research evidence on the effect of IFRS on earnings management post- IFRS adoption and in relation to other reporting standards and reports whether the results are indistinguishable between developed and developing economies. Accounting research in developed economies has long identified earnings management as a means by which managers manipulate financial reports to mislead other stakeholders on the underlying economic performance of the firm. However, earnings management research did not receive much attention in developing countries such as Nigeria until recently. The findings reveal that the existing empirical crams and conclusions there on are mixed, inconsistent and difficult to generalise. This indicates the pressing need for country, especially Nigeria to engage on studies of this nature. The study further, stumbles on the fact that IFRS can indistinctly benefit both developing and developed markets when coupled with appropriate effective enforcement machinery. Substantially, the results entail that IFRS is a critical determinant for quality reporting but not a ‘prima facie’ guarantor for quality reporting.
Author: Felicia Uchehara
Publisher:
ISBN:
Category :
Languages : en
Pages : 9
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Book Description
This paper investigates the financing corporate organization for efficient performance: equity or debt option. To carry out this research we employed a disaggregated approach using sample of twenty -seven firms listed on the Nigerian Stock Exchange during the seventeen- year period, 1996- 2013 and a model with the necessary policy variables was constructed. Panel data for the selected firms are generated and analyzed using Ordinary Least Squares (OLS) as a method of estimation. Our result reveals that a firm's capital structure represented by Debt Ratio, DR has a significantly negative impact on the Return on Asset (ROA) and Return on Equity (ROE) (firm's performance proxies). Also the relationship between ROA and firm's asset tangibility is negative and significant at 1% level being wrongly signed, against a priori expectations. This shows that firms with high ratio of tangibility have a lower financial performance ratio. The results also show that the size and growth of firm are correctly signed consistent with Myers and Majluf (1984). The study by these findings indicate consistency with previous empirical studies and provide evidence in support of Agency cost theory. The author recommended among others that firms should identify other relevant factors that influence corporate performance other than debt. It is also necessary that firms understand their conditions, analyze their debt capacities, look at the need to maintain comparability with firms in the same industry before making the final decision regarding the option; and especially when presented with attractive new growth opportunities.
Author: D. A. Omole
Publisher:
ISBN:
Category : Business enterprises
Languages : en
Pages : 70
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Book Description
Author:
Publisher: GRIN Verlag
ISBN: 334655063X
Category : Business & Economics
Languages : de
Pages : 67
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Book Description
Studienarbeit aus dem Jahr 2020 im Fachbereich BWL - Bank, Börse, Versicherung, , Sprache: Deutsch, Abstract: The study examines the impact of capital structure on the profitability of Nigerian quoted insurance companies with specific emphasis on AIICO Plc which is one of the 15 quoted insurance companies in Nigeria. The scope covers the period of ten (10) years (2010 to 2020). AIICO PLC was selected based on the criteria of data availability. The study assists financial managers of firms to determine the proportion of equity capital and debt capital (capital structure) to obtain the debt financing mix that will optimize the value of the firm. This study, therefore, has contributed to the literature by examining capital structure and profitability of Nigerian quoted insurance companies. The study aids in the understanding of the impact of capital structure on insurance profitability. This has helped us to understand the impact of capital structure in profitability of Nigeria quoted insurance companies. The outcome from this study will help decisions on capital structure and allow the policy makers in formulating informed policies on capital structure and also to measure the implications of such policies on the operations of quoted insurance companies. This will go a long way in helping investors in deciding whether to pull out their share in pursuance of capital gains or preserve their stake in a corporation. The study will contribute to existing body of knowledge by investigating capital structure and profitability of Nigerian quoted insurance companies.
Author: Peter Atrill
Publisher: Financial Times/Prentice Hall
ISBN: 9780273711049
Category : Decision making
Languages : en
Pages : 506
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Book Description
This text is an introductory course in management accounting for those seeking an understanding of basic principles and underlying concepts without detailed technical knowledge. It has a strong practical emphasis, with plenty of examples taken from the real world as well as numerical examples with step-by-step explanations.
Author:
Publisher:
ISBN:
Category :
Languages : en
Pages : 39
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Book Description
