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Effects of Capital Structure on Business Profitability of Processing Enterprises Listed on the Dar es Salaam Stock Exchange, Tanzania
Gaston Vedasto Mujwahuzi,
Crispin John Mbogo
Issue:
Volume 8, Issue 4, July 2020
Pages:
165-171
Received:
27 May 2020
Accepted:
12 June 2020
Published:
20 June 2020
Abstract: This paper examines effects of capital structure on business profitability in seven processing enterprises listed on the Dar es Salaam Stock Exchange (DSE), Tanzania. Capital structure in this study was measured by long-term debt to equity ratio (LTDR) and business profitability was measured by Return on Assets (ROA), Return on Equity (ROE) and Earnings per Share (EPS). The study applied secondary data obtained from the published reports in the DSE website for a duration of ten years from 2009 to 2018. Ordinary Least Squares (OLS) regression analysis and Karl Pearson Coefficient of Correlation were employed to determine the relationship between capital structure and business profitability. Results revealed that the capital structure indicator had a weak and statistically insignificant effect on business profitability measures. The relationship between LTDR and all measures of profitability used in this study were found to be weak and insignificant. Therefore, the study concluded that capital structure is not a major determinant of firm’s profitability. These findings generally concur with the predictions of the Pecking Order Theory of capital structure decisions of firms. It is therefore recommended that financial managers should follow a moderate and cautious approach to debt issues despite the benefit of tax shield in order to minimize the risk of operating under financial distress.
Abstract: This paper examines effects of capital structure on business profitability in seven processing enterprises listed on the Dar es Salaam Stock Exchange (DSE), Tanzania. Capital structure in this study was measured by long-term debt to equity ratio (LTDR) and business profitability was measured by Return on Assets (ROA), Return on Equity (ROE) and Ear...
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Effects of IFRS Adoption on the Financial Performance and Value of Listed Banks in Nigeria
Chuks Chikwendu Nwaogwugwu
Issue:
Volume 8, Issue 4, July 2020
Pages:
172-181
Received:
8 May 2020
Accepted:
2 June 2020
Published:
23 June 2020
Abstract: This study examined the effect of IFRS adoption on the financial performance and value of the listed banks in Nigeria. Using a sample of 5 banks,(8 years observation) that have adopted the international financial reporting standard (IFRS) from 2012 to 2015 and pre-IFRS period from 2008 to 2011, we can investigate performance and value of the listed banks. As the main objective of the study, we introduced panel data analysis on Return on Asset, Return on Equity and earnings per share (EPS) and IFRS dummy variable as the independent variables into the model. The paper uses the Fixed Effect Model as the appropriate estimator for analysis of the data. The estimated coefficient on the regime period (RR) term is statistically insignificant and positive in the models. The results suggest that the adoption of IFRS in Nigeria has not lead to higher performance and increased value. Overall, results suggest that the findings of this study are utmost important financial analyst, policy-makers and concerned stakeholder to ensuring that all firms adopt IFRS and create easy access for comparability. This will enable relevant and reliable financial information to be passed to the capital market for investors to take an informed and relevant decision
Abstract: This study examined the effect of IFRS adoption on the financial performance and value of the listed banks in Nigeria. Using a sample of 5 banks,(8 years observation) that have adopted the international financial reporting standard (IFRS) from 2012 to 2015 and pre-IFRS period from 2008 to 2011, we can investigate performance and value of the listed...
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Financial Deepening and Capital Market Returns in Nigeria
Ogbonna Udochukwu Godfrey,
Ejem Chukwu Agwu
Issue:
Volume 8, Issue 4, July 2020
Pages:
182-189
Received:
19 June 2020
Accepted:
1 July 2020
Published:
6 July 2020
Abstract: This study applied the error correction model to examine the relationship between financial deepening and capital market returns in Nigeria. The study was conceived because of the importance of capital market as an engine and fulcrum that propel economic growth. As such, the degree of financial services it receives should be a matter of concern to finance and economic researchers. However, after empirical analysis of data obtained from the central bank of Nigeria and the National Bureau of Statistic, it was majorly found that the ratio of money supply to gross domestic product has a positive and significant impact on the returns of the capital market of Nigeria. It was also found that ratio of credit to private sector to gross domestic product has negative and significant influence on the return of the capital market in Nigeria. In the light of these findings, the researchers advise the central bank of Nigeria to always do proper evaluation and monitoring of the distribution of such financial services, aimed at ensuring it gets to the targeted individuals, thereby stimulating economic growth in Nigeria. In addition, supervisory authorities of the capital market in Nigeria should in her advisory role, organize technical sections for investors on the rechanneling of their returns in the exchange. This will go a long to increase the capitalization of the capital market.
Abstract: This study applied the error correction model to examine the relationship between financial deepening and capital market returns in Nigeria. The study was conceived because of the importance of capital market as an engine and fulcrum that propel economic growth. As such, the degree of financial services it receives should be a matter of concern to ...
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Federally Collected Non-oil Tax Revenue and National Economic Performance in Nigeria: A Pre - post Treasury Single Account Implementation Assessment
Stanley Ogoun,
Odogu Terry Keme Zuode
Issue:
Volume 8, Issue 4, July 2020
Pages:
190-198
Received:
26 April 2020
Accepted:
28 June 2020
Published:
13 July 2020
Abstract: This paper examined the implementation of Treasury Single Account (TSA) on federally collected non-oil tax revenue and national economic performance in Nigeria, via an inter-period comparative milieu. This study was stimulated by the divergent opinion amongst stakeholders on the justification and efficacy of the TSA model. The study was underpinned by the stakeholder and public finance management theories. Mulled after the ex post facto research template, before (pre) and after (post) implementation data of the corresponding periods were obtained from the annual bulletins/reports of Federal Inland Revenue Service (FIRS), Central Bank of Nigeria (CBN) and Nigerian Bureau of Statistics (FBS). While, actual reported tax revenue for the corresponding periods were obtained, gross domestic product was deployed to proxy national economic performance. Paired sample t-test was used to process the data on the Statistical Package for Social Sciences (SPSS) template. The results revealed that, in gross terms more revenue was collected pre-TSA. However, a significant increase in federally collected revenue post TSA implementation was achieved, granted that the economy slipped into recession from the third quarter of 2015, also a considerable growth in GDP. In essence, both measures performed better in the post implementation period from a comparative strand. This implies that, the TSA policy has a positive bearing on both non-oil tax revenue generation and economic performance. Following, it is recommended that government should improve on the existing TSA framework by incorporating complementary, supportive control and monitoring measures to perfect the operation of the system, and to escalate the system further towards monitoring outflows (expenditure),
Abstract: This paper examined the implementation of Treasury Single Account (TSA) on federally collected non-oil tax revenue and national economic performance in Nigeria, via an inter-period comparative milieu. This study was stimulated by the divergent opinion amongst stakeholders on the justification and efficacy of the TSA model. The study was underpinned...
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Differences in the Reliability of Fair Value Hierarchy Measurements: A Cross-Country Study
Chu Yeong Lim,
Gary Pan,
Kevin Ow Yong
Issue:
Volume 8, Issue 4, July 2020
Pages:
199-207
Received:
19 June 2020
Accepted:
16 July 2020
Published:
5 August 2020
Abstract: Prior research suggests there are significant differences in how investors perceive the reliability of fair values. An unaddressed question in this stream of research is whether cross-country differences in institutional factors can mediate differences in reliability for the fair value hierarchy measurements. We contribute to the research on fair value accounting by examining the impact of institutional factors toward the perceived reliability of fair value measurements in an international context. Based on an international sample of banks across twenty different countries, we find that the probability of crash risk is lower among countries with better financial development infrastructure, greater level of trust, tighter security regulations and higher level of disclosure requirements. These results apply to Level 1 assets but not to Level 2 and Level 3 assets. We also document that these cross-country factors improve the trading volume of our sample banks. Our study provides early evidence suggesting that fair value measurements across the fair value hierarchy are impacted by a country’s institutional background and financial development as well as the extent of its securities regulation and disclosure level. Our study suggests that there are ongoing concerns toward opaque fair values which are not fully eliminated by institutional differences. In addition, these differences matter in influencing investor willingness to trade in these stocks.
Abstract: Prior research suggests there are significant differences in how investors perceive the reliability of fair values. An unaddressed question in this stream of research is whether cross-country differences in institutional factors can mediate differences in reliability for the fair value hierarchy measurements. We contribute to the research on fair v...
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Accounting Disclosure Practices – An Over View
Komati Durga Prasad,
Soofi Asra Mubeen,
Banda Rajani
Issue:
Volume 8, Issue 4, July 2020
Pages:
208-211
Received:
4 March 2020
Accepted:
8 June 2020
Published:
19 August 2020
Abstract: The accounting principles consist of both concepts and conventions. Among different conventions, the disclosure convention is the most important one. The information should be presented in such a manner that it can be easily understood by a person of average knowledge and prudence. The Company Act 1956 not only requires that Income Statement and Balance Sheet of a company must give prescribed forms in which these statements are to be prepared. In recent years, many business enterprises have broadened the scope of their activities to different industries foreign counties and market. Due to the growth of diversified business and expansion of firms into foreign market, consolidated information becomes non-homogeneous information. The problems of disclosure can be resolved in the light of the objectives of financing reporting. The methods of disclosure include Income Statement, balance Sheet, Statement of Retained earnings, and Funds Flow statement.
Abstract: The accounting principles consist of both concepts and conventions. Among different conventions, the disclosure convention is the most important one. The information should be presented in such a manner that it can be easily understood by a person of average knowledge and prudence. The Company Act 1956 not only requires that Income Statement and Ba...
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