Tag Archives: Net Profit Margin

Corporate Governance and Profitability of Quoted Oil and Gas Companies in Nigeria (Published)

This study investigated the influence of corporate governance on profitability of quoted oil and gas companies in Nigeria. The ex post facto research design was adopted for the study. The population of the study was made up of the twelve (12) oil and gas companies listed on the Nigerian stock exchange between 2010 and 2018. Ten (10) listed oil and gas companies in Nigeria constituted the sample size for this study. Data required for the study were extracted from the audited financial statements of the quoted oil and gas companies that constituted the sample of this study and analysis of data was carried out using descriptive statistics. Multiple regression and correlation statistics were used in testing the hypothesis postulated. The investigation revealed that a significant positive linear relationship exists between corporate governance and profitability of quoted oil and gas companies in Nigeria and that board independence, board size and board meetings accounts for 3.2 percent, 21.9 percent and 2.8 percent respectively of the profitability of quoted oil and gas companies in Nigeria. The results of the study further revealed that audit committee independence, audit committee meetings and audit committee competence accounts for 1.6 percent, 6.8 percent and 14.3 percent respectively of the profitability of quoted oil and gas companies while external auditor independence, shareholders’ involvement and ownership concentration accounts for 1.2 percent, 23.6 percent and 0.2 percent respectively of the profitability of quoted oil and gas companies in Nigeria. Based on the findings of the study, it is concluded that corporate governance has a moderate influence (52.3 percent) on profitability of quoted oil and gas companies in Nigeria. One of the recommendations made was that quoted oil and gas companies in Nigeria should continually appraise their corporate governance system with a view to determine whether the system is functioning as expected so that corrective actions can be taken to address any deficiency in the system and such appraisal should be done annually.

Keywords: Board Of Directors, Corporate Governance, Corporate Governance Mechanisms, Net Profit Margin, Profitability

Business Consolidation and Its Impact on Financial Performance: Evidence from the Ghanaian Banking Industry (Published)

The study provides empirical examination on the impact of business consolidation or mergers and acquisitions (M&A) on the financial performance of banks in Ghana. Both descriptive and correlational research designs were employed for the study. Two banks: Ecobank Ghana Ltd and Access Bank Ghana Ltd were chosen for the study. The annual reports of the banks from pre-merger period (2009 to 2011) and post-merger period (2012 to 2015) were used for the analysis. Two analysis techniques: ratio and regression analysis were used to examine the impact of mergers and acquisitions (M&A) on the profitability of these firms. Net profit margin (NPM) and return on capital employed (ROCE) were used as proxies for financial performance and Ordinary Least Square (OLS) regression model was used to estimate the level of impact of M&A on the performance of the banks. The study revealed that mergers and acquisitions (M&A) resulted to more than 80% growth in income and the net assets immediately after acquisition. The growth in profitability continued in subsequent years, however at a decreasing rates. With regards to net profit margin and return on capital employed (ROCE), the banks observed a marginal decline after three years of acquisition. The study further found empirical evidence to support the view that mergers and acquisitions (M&A) has a positive and significant impact on both NPM and ROCE. Accordingly, it is concluded that mergers and acquisitions (M&A) has a positive and significant impact on financial performance of banks.

Keywords: Acquisition, Agency Theory, Banks’, Consolidation, Mergers, Net Profit Margin, Return on Capital Employed (ROCE), synergy

Sector-wise Effect of Solvency on Profitability: Evidence from Jordanian Context (Review Completed - Accepted)

This study is conducted to investigate the effect of solvency on profitability among Jordanian Industrial sectors. As far as this study is concerned solvency which expressed by debt ratio (DEBT), and equity ratio (EQUITY), and the profitability which expressed by variables including earnings before interest and tax (EBIT), net profit margin (NPM), return on asset (ROA), and return on equity (ROE), and. For the analysis the multiple regressions cover a period 2008-2011, used to examine the effect of solvency on profitability among sectors. The study found that table the Mining and Extraction sector has the highest earnings before interest and tax (EBIT) while the lowest the Glass and Ceramic Industries. The Mining and Extraction sector has the highest Net Profit Margin (NPM), return on asset (ROA); return on equity (ROE) while the lowest the Glass and Ceramic Industries. Also table the Electrical Industries sector has the highest debit ratio (DEBT) while the lowest the Glass and Ceramic Industries. But The Glass and Ceramic Industries have the highest equity ratio (EQUITY) and the lowest equity ratio (EQUITY) for the Electrical Industries sector.

The study revealed that solvency has a significant relationship with earnings before interest and tax (EBIT), net profit margin (NPM), return on asset (ROA), and return on equity (ROE), because the test was at level 5%.

 

Keywords: Amman Stock Exchange (ASE), Debt Ratio, Earning before Interest and Tax, Equity Ratio, Net Profit Margin, Profitability, Return on Asset, Return on Equity, Solvency